Enzon Pharmaceuticals Anticipated Rights Offering to Existing Shareholders

CRANFORD, N.J., Aug. 21, 2020 (GLOBE NEWSWIRE) -- Enzon Pharmaceuticals, Inc. (the “Company” or “Enzon”) (OTC: ENZN) today announced that its Board of Directors (the “Board”) has approved a rights offering to existing shareholders whereby the Company intends to distribute one transferable subscription right for each outstanding share of common stock owned. For every 1,105 subscription rights held, a shareholder will be entitled to purchase one unit.

The Company plans to offer 40,000 units, at a subscription price of $1,090 per unit. Each unit will consist of one share of preferred stock, par value $1,000, and 750 shares of common stock.

The Company anticipates that during the offering period, that the rights will be quoted on the OTCQX market of the OTC Markets Group, Inc. The Company does not currently intend to apply for listing of the preferred stock on any securities exchange or recognized trading system.

The Company expects that the preferred stock will entitle holders to receive cumulative dividends at the rate per share of 3% per annum, if paid in cash, or 5% per annum, if paid in-kind.  Holders of preferred stock will not have any voting rights, and the preferred stock will not be convertible into shares of common stock. The Company may redeem the preferred stock at any time, provided that all accrued and cumulative unpaid dividends have been paid. Holders of preferred stock are expected to have the right to demand that the Company redeem their shares in the event that the Company undergoes a change of control. 

The purpose of the offering is to position the Company as a public company acquisition vehicle, where the Company can become an acquisition platform and more fully utilize its net operating loss carryforwards and enhance shareholder value.  However, the Company does not have any current plans, arrangements or understandings with respect to any acquisitions or investments, and is currently not involved in any negotiations with respect to any such transactions.

Certain of the Company’s existing investors have advised the Company that they are considering exercising all of their subscription rights and to purchase any and all unsubscribed units as a backstop, but they have not made a binding commitment in any amount to do so.

The Company intends to file a registration statement with the U.S. Securities and Exchange Commission to register the issuance of the rights and the issuance of the shares of common stock and preferred stock within the next 30 days, and to issue the rights promptly following the effective date of the registration statement. The Company plans to include additional information regarding the rights offering, including the record date and subscription period, in the registration statement. As of the date of this press release, the Company has not entered into any definitive agreement with any party with respect to the rights offering, and the terms of the rights offering are subject to change in the discretion of the Company’s Board.