SCHEDULE: CASI Pharmaceuticals: ETP Global III Fund LP Acquires Convertible Note

CASI Pharmaceuticals, Inc. announced that ETP Global III Fund LP has purchased a $5 million convertible note, the fourth tranche of a $20 million financing, with conversion rights into ordinary shares.

Summary

• ETP Global III Fund LP has acquired a convertible promissory note with a principal amount of US$5 million from CASI Pharmaceuticals, Inc.
• This acquisition represents the fourth tranche of a larger US$20 million convertible note financing agreement between the parties, originally dated December 11, 2025.
• The convertible note bears interest at a rate of 12% per annum and has a maturity date of April 16, 2029.
• The note can be converted into CASI Pharmaceuticals' ordinary shares at a conversion price determined by the volume-weighted average closing price of the shares over the five trading days preceding a conversion notice, with a floor of US$1.00 and a ceiling of US$2.00 per share.
• The proceeds from this note are intended for clinical trials in China and general operations, with restrictions on significant US clinical trial investments without holder approval.
• As of May 15, 2026, the total outstanding ordinary shares of CASI Pharmaceuticals are reported as 20,555,873.
• Wei-Wu He, Ph.D., and associated entities collectively beneficially own 58.8% of the outstanding ordinary shares, including shares issuable upon conversion of this note and other convertible instruments.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this filing as neutral, reflecting a standard financing transaction with both potential benefits (funding for operations and trials) and risks (potential dilution, subordinate debt).

Positives

• Secured $5 million in financing through the purchase of a convertible note, contributing to the company's overall $20 million financing effort.
• The note provides flexibility for conversion into ordinary shares, potentially strengthening the equity base.
• Proceeds are earmarked for clinical trials in China and general operations, indicating a focus on advancing the company's pipeline.
• The interest rate of 12% per annum on the note is a clear cost of capital for the financing.

Negatives

• The company is issuing debt that can convert into equity, which could dilute existing shareholders if conversion occurs at a low share price.
• The note is unsecured and subordinate to secured debt, indicating a higher risk profile for this debt instrument.
• Restrictions on the use of proceeds for significant US clinical trials without holder approval could limit strategic flexibility.

Risks

• Potential dilution of ordinary shares if the convertible note is converted, especially if the conversion price is low.
• The company's reliance on convertible debt financing may indicate challenges in accessing traditional equity or debt markets.
• The note is subordinate to secured debt, meaning holders of secured debt would be prioritized in case of insolvency.
• The conversion price is tied to the volume-weighted average closing price, making the potential dilution dependent on future market performance.
• The company's financial health and ability to meet the maturity date or interest payments are inherent risks.

Future Outlook

The company has secured $5 million in financing through a convertible note, which is intended to fund clinical trials in China and general operations. The note's conversion terms and maturity date suggest potential future equity dilution and debt repayment obligations.

Industry Context

StockSavvy.ai notes that the issuance of convertible notes is a common financing strategy for biotechnology and pharmaceutical companies, particularly those in clinical development stages, to fund research and development without immediate equity dilution. However, the subordinate and unsecured nature of this note, along with the specified conversion price range, highlights the company's risk profile and the investor's expectations.

Stakeholder Impact

• Shareholders: Potential for dilution if the convertible note is converted into ordinary shares. The conversion price range will determine the extent of dilution.
• Creditors: The note is unsecured and subordinate to secured debt, meaning secured creditors have priority in repayment.
• Company Management: The use of proceeds is directed towards clinical trials and operations, with specific restrictions on US clinical trial investments without investor approval.

Next Steps

• The company will use the proceeds for clinical trials in China and general operations.
• The convertible note can be converted into ordinary shares from the 91st day after issuance until the maturity date.
• The company may demand repayment of the outstanding balance upon an Event of Default.
• The company may also convert the note on the maturity date.

Key Dates

Recommendation

The filing details a standard convertible note financing, which provides necessary capital but also introduces potential future dilution. The company's strategic use of funds for clinical trials is positive, but the subordinate nature of the debt and the dependence on future share price for conversion terms warrant a cautious 'hold' recommendation until further operational progress or clarity on the conversion impact is available.

Keywords

CASI Pharmaceuticals, Convertible Note, Financing, ETP Global III Fund LP, Securities, Ordinary Shares, Clinical Trials, Schedule 13D, Wei-Wu He