Lexaria Announces Closing of $3.6 Million Registered Direct Offering Priced At-The-Market Under Nasdaq Rules
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The direct offering and private placement by Lexaria Bioscience Corp. are significant events that have immediate financial implications for the company. The raising of approximately $3.6 million in gross proceeds is a substantial influx of capital that can be directly allocated towards the company's stated goals of research and development, as well as patent and legal costs. This capital injection is likely to impact the company's burn rate and extend its runway, potentially reducing the immediate need for further financing.
Investors should note that the purchase price of $2.31 per share represents the market's valuation of the company at the time of the offering. The concurrent issuance of warrants with an exercise price of $2.185 suggests a potential future dilution of shares, which could affect the stock price if a significant number of warrants are exercised. Additionally, the involvement of H.C. Wainwright & Co. as the exclusive placement agent provides a level of credibility to the transaction, which can be an important factor for investor confidence.
The legal framework surrounding this transaction involves the use of a 'shelf' registration statement, which allows the company to sell securities to the public without the need for a separate registration for each offering. This expedites the process of raising capital but requires strict compliance with SEC regulations. The registration statement having been declared effective over a year prior to this offering, indicates a level of preparedness and strategic planning by Lexaria.
It is also important to recognize the distinction between the registered direct offering and the private placement of unregistered warrants. The latter are offered under exemptions provided by Section 4(a)(2) of the Securities Act and Regulation D, which restricts the sale to accredited investors and limits the public trading of these securities. This legal structure can be advantageous for the company by allowing it to raise capital more quickly and with potentially fewer disclosure requirements than a public offering, but it also imposes certain limitations on investors regarding the liquidity and transferability of the warrants.
From a market perspective, Lexaria Bioscience Corp.'s focus on drug delivery platforms positions it within a highly competitive and innovative sector. The successful closing of this offering could signal to the market that Lexaria is progressing toward its research and development goals, which may have long-term implications for its market position and competitive edge. The intended use of proceeds for research and development, in particular, is a positive sign for investors who are interested in the company's growth potential and innovation capabilities.
However, the market will also be watching closely to see how effectively Lexaria utilizes the raised funds. The efficiency of the capital deployment towards R&D outcomes will be a key factor in evaluating the company's management performance and future prospects. Furthermore, the exercise of the warrants and the potential increase in the number of outstanding shares could impact the company's stock performance, which is a common concern for existing shareholders when evaluating such transactions.
KELOWNA, BC / ACCESSWIRE / February 16, 2024 / Lexaria Bioscience Corp. (Nasdaq:LEXX)(Nasdaq;LEXXW) (the "Company" or "Lexaria"), a global innovator in drug delivery platforms, today announced that it has closed its previously announced registered direct offering priced at-the-market under Nasdaq rules for the purchase and sale of 1,558,443 shares of common stock (or common stock equivalents in lieu thereof) at a purchase price of
H.C. Wainwright & Co. acted as the exclusive placement agent for the offering.
The gross proceeds to the Company from the offering were approximately
The common stock (or common stock equivalents) (but not the unregistered warrants and the shares of common stock underlying the unregistered warrants) described above were offered by the Company pursuant to a "shelf" registration statement on Form S-3 (File No. 333-262402) that was declared effective by the Securities and Exchange Commission (the "SEC") on February 4, 2022. The offering of the shares of common stock (or common stock equivalents) was made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and accompanying prospectus relating to the registered direct offering were filed with the SEC. Electronic copies of the final prospectus supplement and accompanying prospectus may be obtained on the SEC's website at http://www.sec.gov or by contacting H.C. Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, New York 10022, by phone at (212) 856-5711 or e-mail at placements@hcwco.com.
The unregistered warrants described above were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and/or Regulation D promulgated thereunder and, along with the shares of common stock underlying such unregistered warrants, have not been registered under the Securities Act, or applicable state securities laws. Accordingly, the unregistered warrants and underlying shares of common stock may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.
This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
About Lexaria Bioscience Corp. & DehydraTECH
DehydraTECH™ is Lexaria's patented drug delivery formulation and processing platform technology which improves the way active pharmaceutical ingredients (APIs) enter the bloodstream through oral delivery. Since 2016, Lexaria has developed and investigated DehydraTECH with a variety of beneficial molecules in oral and topical formats. DehydraTECH has repeatedly demonstrated the ability to increase bio-absorption and has also evidenced an ability to deliver some drugs more effectively across the blood brain barrier, which Lexaria believes to be of particular importance for centrally active compounds. Lexaria operates a licensed in-house research laboratory and holds a robust intellectual property portfolio with 39 patents granted and many patents pending worldwide. For more information, please visit www.lexariabioscience.com.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release includes forward-looking statements. Statements as such term is defined under applicable securities laws. These statements may be identified by words such as "anticipate," "if," "believe," "plan," "estimate," "expect," "intend," "may," "could," "should," "will," and other similar expressions. Such forward-looking statements in this press release include, but are not limited to, the intended use of proceeds from the offering, and the Company's ability to carry out research initiatives, receive regulatory approvals or grants or experience positive effects or results from any research or study. Such forward-looking statements are estimates reflecting the Company's best judgment based upon current information and involve a number of risks and uncertainties, and there can be no assurance that the Company will actually achieve the plans, intentions, or expectations disclosed in these forward-looking statements. As such, you should not place undue reliance on these forward-looking statements. Factors which could cause actual results to differ materially from those estimated by the Company include, but are not limited to, government regulation and regulatory approvals, managing and maintaining growth, the effect of adverse publicity, litigation, competition, scientific discovery, the patent application and approval process, potential adverse effects arising from the testing or use of products utilizing the DehydraTECH technology, the Company's ability to maintain existing collaborations and realize the benefits thereof, delays or cancellations of planned R&D that could occur related to pandemics or for other reasons, and other factors which may be identified from time to time in the Company's public announcements and periodic filings with the US Securities and Exchange Commission on EDGAR. The Company provides links to third-party websites only as a courtesy to readers and disclaims any responsibility for the thoroughness, accuracy or timeliness of information at third-party websites. There is no assurance that any of Lexaria's postulated uses, benefits, or advantages for the patented and patent-pending technology will in fact be realized in any manner or in any part. No statement herein has been evaluated by the Food and Drug Administration (FDA). Lexaria-associated products are not intended to diagnose, treat, cure or prevent any disease. Any forward-looking statements contained in this release speak only as of the date hereof, and the Company expressly disclaims any obligation to update any forward-looking statements or links to third-party websites contained herein, whether as a result of any new information, future events, changed circumstances or otherwise, except as otherwise required by law.
INVESTOR CONTACT:
George Jurcic - Head of Investor Relations
ir@lexariabioscience.com
Phone: 250-765-6424, ext 202
SOURCE: Lexaria Bioscience Corp.
View the original press release on accesswire.com
FAQ
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