SCHEDULE: YA II PN Reports 9.9% Stake in RedHill Biopharma

YA II PN, Ltd. and its affiliates disclosed a 9.9% beneficial ownership stake in RedHill Biopharma Ltd. following a Standby Equity Distribution Agreement.

Summary

• YA II PN, Ltd. and its affiliates reported beneficial ownership of 508,723 American Depositary Shares (ADSs) of RedHill Biopharma Ltd.
• This represents 9.9% of the company's outstanding ADSs.
• The ownership stems from a Standby Equity Distribution Agreement (SEPA) entered into on December 19, 2025.
• Under the SEPA, YA II PN, Ltd. received 508,723 ADSs and a warrant to purchase an additional 590,446 ADSs.
• A beneficial ownership cap prohibits YA II PN, Ltd. and its affiliates from exceeding 9.99% of outstanding ADSs.
• The calculation of the percentage is based on 5,092,326 total ADSs, comprising 4,583,603 ADSs outstanding as of December 19, 2025, plus the 508,723 ADSs received by YA II.

Sentiment

Score: 5

Explanation: The filing is a neutral disclosure of beneficial ownership following a financing agreement. While the SEPA provides capital, it also implies potential dilution, balancing the sentiment.

Positives

• The investment by YA II PN, Ltd. through the SEPA provides RedHill Biopharma Ltd. with access to capital.
• The warrant component offers potential future capital infusion upon exercise.

Negatives

• The SEPA structure, often used by companies needing capital, can lead to dilution for existing shareholders as new shares are issued.
• The 9.99% beneficial ownership cap limits the investor's ability to significantly influence corporate control, which might be seen as a negative by some activist investors.

Risks

• Potential future dilution for existing shareholders if the warrant to purchase an additional 590,446 ADSs is exercised.
• The nature of a Standby Equity Distribution Agreement (SEPA) often indicates a company's need for ongoing capital, which can signal financial challenges or significant R&D expenses.

Future Outlook

The warrant to purchase an additional 590,446 ADSs indicates a potential future increase in YA II PN, Ltd.'s stake, subject to the 9.99% beneficial ownership cap, which could provide further capital to RedHill Biopharma Ltd.

Industry Context

Standby Equity Distribution Agreements (SEPAs) are a common financing tool, particularly for smaller biotechnology or pharmaceutical companies like RedHill Biopharma, which often require significant capital for research, development, and commercialization without immediate revenue streams. This type of financing allows companies to raise capital over time as needed, but can also lead to share price volatility and dilution concerns.

Related Party Transactions

• The Standby Equity Distribution Agreement (SEPA) between RedHill Biopharma Ltd. and YA II PN, Ltd. is a transaction involving the issuance of securities to an investor.
• The various reporting persons (YA Global Investments II (U.S.), LP, Yorkville Advisors Global, LP, Yorkville Advisors Global II, LLC, YAII GP, LP, YAII GP II, LLC, Mark Angelo, SC-Sigma Global Partners, LP) are identified as affiliates of YA II PN, Ltd. and are deemed to beneficially own the same number of ADSs.

Stakeholder Impact

• Shareholders: Potential for dilution from the issuance of new ADSs under the SEPA and future warrant exercise.
• Company (RedHill Biopharma): Access to capital for operations, research, and development.

Next Steps

• Potential exercise of the warrant by YA II PN, Ltd. to acquire an additional 590,446 ADSs, subject to the 9.99% beneficial ownership cap.

Key Dates

Recommendation

The filing discloses a significant equity financing arrangement (SEPA) which provides capital to RedHill Biopharma but also introduces potential future dilution. While the capital infusion is positive for the company's liquidity, the dilutive nature and the typical context of such agreements (often indicating a need for capital) suggest a 'hold' recommendation. Investors should monitor the company's use of proceeds and future operational performance.

Keywords

RedHill Biopharma, RHBP, YA II PN, Standby Equity Distribution Agreement, SEPA, American Depositary Shares, ADSs, Warrant, Beneficial Ownership, Equity Financing, Dilution, SEC Filing, Schedule 13G