BOSTON and SYDNEY — 21 September 2018 — GI Dynamics, Inc. (ASX:GID), a medical device company that is developing EndoBarrier for patients diagnosed with type 2 diabetes and obesity, is pleased to confirm, further to its announcement on 20 September 2018, that it has closed Tranche 1 of the Placement (as detailed further in the 20 September 2018 announcement). Under the first tranche of the Placement,

GI Dynamics has issued 150,000,000 CDIs (representing 3,000,000 shares of common stock) to a certain sophisticated investor in the United States resulting in a raise of AUD $3,000,000 (USD $2,160,000).

The CDIs issued under the first tranche of the Placement rank equally in all respects with all other CDIs on issue from the time of their allotment.

The funds raised under the first tranche of the Placement will be used by GI Dynamics to fund the continued development of EndoBarrier, to prepare for the U.S. pivotal trial of EndoBarrier, and for general working capital purposes.

GI Dynamics confirms it provided the relevant information required pursuant to ASX Listing Rules 3.10.5A and 7.1A.4(b) in its 20 September 2018 announcement.

Confirmation of the effect of the Placement on the 2017 and 2018 Convertible Notes and the 2018 Warrant previously issued to Crystal Amber Fund Limited
GI Dynamics confirms, that as the issue price of AUD $0.020 per CDI (representing USD $0.0144 (not USD $0.144 as inadvertently stated in the announcement on 20 September 2018) using an exchange rate of USD $0.72 per AUD) in the Placement is less than the USD $0.018 (not USD $0.18 as inadvertently stated in the announcement on 20 September 2018)  conversion price in the 2018 Convertible Note and the USD $0.018 (not USD $0.18 as inadvertently stated in the announcement on 20 September 2018)   exercise price in the 2018 Warrant, both issued to Crystal Amber Fund Limited (Crystal Amber):

  • The conversion price in the 2018 Convertible Note will be decreased to USD $0.0144 (not USD $0.144 as inadvertently stated in the announcement on 20 September 2018) as of the closing of Tranche 1 of the Placement, resulting in a proportionate increase in the number of CDIs currently issuable upon conversion of the 2018 Convertible Note; and
  • The exercise price in the 2018 Warrant will be decreased to USD $0.0144 (not USD $0.144 as inadvertently stated in the announcement on 20 September 2018) as of the closing of Tranche 1 of the Placement (without any change to the number of CDIs currently issuable upon exercise of the 2018 Warrant).

Crystal Amber’s right to convert its 2017 Convertible Note into CDIs at any time prior to maturity at a conversion price equal to the volume weighted average closing price per CDI on the ASX over the five trading days prior to conversion has not changed as a result of the Placement.

Restrictions on Resale of Securities in the United States
The securities offered under the Placement have not been registered under the Securities Act of 1933, as amended (Act), or any state securities laws, and until so registered may not be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Act and applicable state securities laws. This announcement is not an offer to sell, nor a solicitation of an offer to buy any securities, nor shall there be any sale of these securities in any state or jurisdiction in which the offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction or an applicable exemption therefrom.

 

About GI Dynamics

GI Dynamics Inc. (ASX: GID) is the developer of EndoBarrier, an endoscopically delivered device therapy for the treatment of type 2 diabetes and obesity. EndoBarrier is not approved for sale and is limited by federal law to investigative use only. Founded in 2003, GI Dynamics is headquartered in Boston, Massachusetts. For more information, please visit gidynamics.com.

 

Forward-Looking Statements

The announcement may contain forward-looking statements. These statements are based on GI Dynamics management’s current estimates and expectations of future events as of the date of this announcement. Furthermore, the estimates are subject to several risks and uncertainties that could cause actual results to differ materially and adversely from those indicated in or implied by such forward-looking statements.

These risks and uncertainties include, but are not limited to, risks associated with our ability to continue to operate as a going concern; our ability to raise sufficient additional funds to continue operations and to conduct the planned clinical trial of EndoBarrier in the United States (GID 18-1 Trial); our ability to execute the GID 18-1 Trial under FDA IDE; our ability to enlist clinical trial sites and enroll patients in accordance with the GID 18-1 Trial; the risk that the FDA stops the GID 18-1 Trial early as a result of the occurrence of certain safety events or does not approve an expansion of the GID 18-1 Trial; our ability to maintain compliance with our obligations under our existing convertible note and warrant agreements executed with Crystal Amber Fund Limited, including our obligations to make payment on the relevant notes that are due in December 2018; obtaining and maintaining regulatory approvals required to market and sell our products; the possibility that future clinical trials will not be successful or confirm earlier results; the timing and costs of clinical trials; the timing of regulatory submissions; the timing, receipt and maintenance of regulatory approvals; the timing and amount of other expenses; the timing and extent of third-party reimbursement; intellectual-property risk; risks related to excess inventory; risks related to assumptions regarding the size of the available market; the benefits of our products; product pricing; timing of product launches; future financial results; and other factors, including those described in our filings with the U.S. Securities and Exchange Commission.

Given these uncertainties, one should not place undue reliance on these forward-looking statements. We do not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events or otherwise, unless we are required to do so by law.

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