Aravive, Inc. [NASDAQ: ARAV] disclosed that the company’s Chairman, Fred Eshelman, Pharm.D., through Eshelman Ventures, LLC, decided to buy a pre-funded warrant to acquire 4,545,455 shares of the company’s common stock at a price of $2.20 per share, which was the combined closing bid price of the company’s common stock on The Nasdaq Global Select Market on December 31, 2021.
Dr. Eshelman becomes the valuable owner of around 3,806,098 shares of the company’s common stock, or nearly 18.2% of the total outstanding shares of the company as of December 31, 2021. The Nasdaq Stock Market where the company’s shares are listed mandated that the company would get shareholder authorization to allow the exercise of the pre-funded warrant if such exercise would result in Dr. Eshelman holding in excess of 20% of the voting power of the company’s common stock. But Dr. Eshelman’s investment in the company is not dependent on shareholder authorization.
The company believed that the investment reinforce the company’s balance sheet by nearly $10.0 million. It will improve the company’s financial flexibility and liquidity before multiple expected clinical achievements throughout 2022 for each of the company’s clinical programs. The investment is likely to close on January 5, 2022.
Furthermore, Dr. Eshelman was chosen as the Executive Chairman of Aravive. He has acted as the Non-Executive Chairman of the board since April 2020. In his new role as Executive Chairman, Dr. Eshelman will continue to work with the CEO and senior management of the Company, to help create and complete the Company’s strategy and direction, as well as other key business projects, dependent in all cases on the guidance of the Board of Directors.