Cidara Therapeutics (CDTX) Announces Proposed $30M Rights Offering

Cidara Therapeutics, Inc. (Nasdaq: CDTX) (“Cidara”) today announced its intent to raise $30.0 million through a fully backstopped rights offering. Under the terms of the rights offering, investors as of January 21, 2020 in Cidara’s common stock and preferred stock, as well as the holders of Cidara’s warrants issued on May 21, 2018, will receive a subscription right entitling them to purchase their pro rata share of the $30.0 million offering amount. The rights offering will be fully backstopped by BVF Partners L.P. and Stonepine Capital, LP, each of which have agreed to purchase, at a minimum, its respective as-converted pro rata share of the offering amount, plus an additional amount of securities that are not subscribed for by other purchasers in the rights offering, for a total of up to $30.0 million.

Under the proposed rights offering (the “Rights Offering”), Cidara plans to distribute non-transferable subscription rights to purchase a portion of a share of Cidara’s common stock (“Common Stock”) for each outstanding share of Common Stock, Common Stock issuable upon conversion of the outstanding shares of Cidara’s Series X convertible preferred stock (“Series X Preferred”), and Common Stock issuable upon the exercise of Common Stock Purchase Warrants issued by Cidara on May 21, 2018 (“Warrants”), at $2.51 per share, which is a 15% discount to the 30-day volume weighted average price of Cidara’s common stock, to such security holders of record as of the close of business on January 21, 2020 (the “Record Date”). The subscription rights will be exercisable for an aggregate of up to 11,952,191 shares of Common Stock and up to 1,195,219 shares of Series X Preferred, with participation to be allocated among holders of its Common Stock, Series X Preferred and Warrants on a pro rata basis (assuming full conversion of the Series X Preferred into shares of Common Stock and the full exercise of the Warrants into shares of Common Stock), subject to the aggregate offering threshold and ownership limitations. The subscription rights may be exercised only during the anticipated subscription period of Wednesday, January 22, 2020, through 5:00 PM (New York time) on Monday, February 10, 2020, unless extended. Any participant in the Rights Offering that, by exercise of its subscription right would become a holder of greater than 9.99% of the outstanding number of shares of Common Stock following the Rights Offering may elect to instead purchase Series X Preferred. Cidara intends to sell the Series X Preferred at $25.10 per share, and any such holder so electing would have a right to purchase one one-tenth of a share of Series X Preferred for each share of Common Stock it had a right to purchase under the subscription rights. Each share of Series X Preferred are, subject to certain limitations, convertible into 10 shares of Common Stock at the election of the holder. The Series X Preferred generally have no voting rights, except as required by law, and will participate pari passu, on an as-converted basis, with any distribution of proceeds to holders of Common Stock in the event of Cidara’s liquidation, dissolution or winding up.

The Rights Offering will be made pursuant to Cidara’s effective shelf registration statement on file with the Securities and Exchange Commission (“SEC”) and only by means of a prospectus supplement and accompanying prospectus. Cidara expects to mail subscription certificates evidencing the subscription rights and a copy of the prospectus supplement and accompanying prospectus for the Rights Offering shortly following the Record Date.

This press release is not intended to and does not constitute an offer to sell or the solicitation of an offer to subscribe for or buy or an invitation to purchase or subscribe for any securities in any jurisdiction, nor shall there be any sale, issuance or transfer of securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

BVF Partners L.P., Cidara’s largest stockholder, currently owning approximately 7.9% of the outstanding Common Stock (and approximately 21.1% on an as-converted basis), and Stonepine Capital, LP, a security holder of Cidara (together, the “Backstop Parties”), will together backstop the Rights Offering and have agreed to purchase up to $30.0 million of Common Stock at the subscription price per share of $2.51, and/or Series X Preferred at a price of $25.10 per share in a private placement promptly at the conclusion of the Rights Offering, with the dollar amount to be purchased in such private placement reduced by the dollar amount sold by Cidara (including to BVF Partners L.P. and Stonepine Capital, LP) in the Rights Offering.

Cantor Fitzgerald & Co. will serve as financial advisor to Cidara in the rights offering.

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