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Longeveron Announces Exercise of Warrants for $4.4 Million Gross Proceeds

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Longeveron announced the exercise of warrants for $4.4 million in gross proceeds. These warrants, issued in April 2024, allowed the purchase of 1,697,891 Class A common stock shares at $2.35 per share. H.C. Wainwright & Co. is the offering's exclusive placement agent. In exchange for immediate cash exercise and a $0.125 fee per new warrant, Longeveron will issue new warrants for 3,395,782 Class A common stock shares at $2.50 per share, valid for 24 months. The proceeds will fund clinical and regulatory development of Lomecel-B™, regulatory approvals, capital expenditures, and general corporate purposes. The new warrants are offered under Section 4(a)(2) of the Securities Act and are not registered under state securities laws.

Positive
  • Gross proceeds of approximately $4.4 million from warrant exercise.
  • Proceeds will support clinical and regulatory development of Lomecel-B™.
  • New warrants issued with a 24-month term, potentially offering more funding opportunities.
  • H.C. Wainwright & Co. acting as the exclusive placement agent.
Negative
  • Deduction of placement agent fees and offering expenses from gross proceeds.
  • New warrants issued at $2.50 per share could lead to shareholder dilution.
  • The new warrants are not registered under the Securities Act, posing resale restrictions.

The exercise of existing warrants, yielding $4.4 million in gross proceeds, provides Longeveron with a significant injection of capital. This funding will likely bolster their ongoing clinical trials and regulatory efforts, particularly for their lead candidate, Lomecel-B™. Additionally, the issuance of new warrants, exercisable at $2.50 per share, offers future liquidity potential.

From a financial standpoint, this move indicates investor confidence in Longeveron's pipeline and their ability to advance key projects. However, it also suggests a potential dilution of existing shares, which may impact long-term share value. The $0.125 per new warrant fee also adds a small but non-negligible cost to the overall financial strategy.

Investors should carefully consider both the immediate cash infusion and the longer-term implications of share dilution. Monitoring how efficiently Longeveron utilizes these funds toward advancing clinical trials and achieving regulatory milestones will be important to assess future stock performance.

Longeveron's focus on emerging areas like regenerative medicine and aging-related conditions underscores its potential in the biotech sector. The gross proceeds from the exercise of warrants are earmarked for important research areas such as HLHS (Hypoplastic Left Heart Syndrome) and Alzheimer's disease. Of particular interest is their lead product, Lomecel-B™, currently in various stages of clinical development.

This funding could significantly accelerate clinical trials and regulatory approvals, potentially paving the way for breakthrough treatments. However, the inherent risks of clinical trials mean that success is not guaranteed and delays or failures could negatively impact investor sentiment.

The company’s strategy to reinvest proceeds into R&D demonstrates a commitment to innovation and long-term growth. Investors should remain aware of both the high potential rewards and the risks associated with early-stage biotech investments.

H.C. Wainwright & Co's role as the exclusive placement agent reflects market confidence in Longeveron's strategic moves. The issuance of new unregistered warrants increases the potential market supply of Longeveron’s shares, signaling possible future trading activity and providing liquidity that can attract institutional investors.

However, the private placement and the subsequent need for a registration statement could introduce regulatory complexities and delay the potential market impact of these new warrants. Ensuring compliance with Section 4(a)(2) of the Securities Act and Regulation D will be pivotal for smooth execution.

Retail investors might view this development positively as it suggests a strong capital strategy while keeping dilution at manageable levels. Yet, understanding the regulatory landscape and its implications remains key for making informed decisions.

MIAMI, June 17, 2024 (GLOBE NEWSWIRE) -- Longeveron Inc. (NASDAQ: LGVN) (“Longeveron” or the “Company”), a clinical stage regenerative medicine biotechnology company developing cellular therapies for rare, life-threatening and chronic aging-related conditions, today announced that it has entered into definitive agreements for the exercise of certain existing warrants to purchase an aggregate of 1,697,891 shares of its Class A common stock having an exercise price of $2.35 per share, originally issued in April 2024. The resale of the shares of Class A common stock issuable upon exercise of the existing warrants is registered pursuant to an effective registration statement on Form S-1 (File No. 333-278995). The gross proceeds to the Company from the exercise of the existing warrants are expected to be approximately $4.4 million, prior to deducting placement agent fees and estimated offering expenses payable by the Company.

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.

In consideration for the immediate exercise of the existing warrants for cash and the payment of $0.125 per new warrant, the Company will issue new unregistered warrants to purchase up to an aggregate of 3,395,782 shares of Class A common stock. The new warrants will be immediately exercisable at an exercise price of $2.50 per share and will have a term of twenty-four months from the date of issuance.

The offering is expected to close on or about June 18, 2024, subject to satisfaction of customary closing conditions. The Company intends to use the net proceeds from the offering for its ongoing clinical and regulatory development of Lomecel-B™ for the treatment of several disease states and indications, including HLHS and Alzheimer’s disease, obtaining regulatory approvals, capital expenditures, working capital and other general corporate purposes.

The new warrants described above are being offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Regulation D promulgated thereunder and, along with the shares of Class A common stock issuable upon exercise of the new warrants, have not been registered under the Securities Act, or applicable state securities laws. Accordingly, the new warrants issued in the private placement and the shares of Class A common stock underlying the new warrants 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. The Company has agreed to file a registration statement with the Securities and Exchange Commission covering the resale of the shares of Class A common stock issuable upon the exercise of the new warrants.

This press release does not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Longeveron Inc.

Longeveron is a clinical stage biotechnology company developing regenerative medicines to address unmet medical needs. The Company’s lead investigational product is Lomecel-B™, an allogeneic medicinal signaling cell (MSC) therapy product isolated from the bone marrow of young, healthy adult donors. Lomecel-B™ has multiple potential mechanisms of action encompassing pro-vascular, pro-regenerative, anti-inflammatory, and tissue repair and healing effects with broad potential applications across a spectrum of disease areas. Longeveron is currently pursuing three pipeline indications: hypoplastic left heart syndrome (HLHS), Alzheimer’s disease, and Aging-related Frailty. For more information, visit www.longeveron.com or follow Longeveron on LinkedIn, X, and Instagram.

Forward-Looking Statements

Certain statements in this press release that are not historical facts are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, which reflect management’s current expectations, assumptions, and estimates of future operations, performance and economic conditions, and involve risks and uncertainties that could cause actual results to differ materially from those anticipated by the statements made herein. Forward-looking statements are generally identifiable by the use of forward-looking terminology such as “believe,” “expects,” “may,” “looks to,” “will,” “should,” “plan,” “intend,” “on condition,” “target,” “see,” “potential,” “estimates,” “preliminary,” or “anticipates” or the negative thereof or comparable terminology, or by discussion of strategy or goals or other future events, circumstances, or effects and include, but are not limited to, the potential for Lomecel-B™ to be a beneficial treatment for patients with HLHS and include, but are not limited to, statements regarding the completion of the private placement, the satisfaction of customary closing conditions related to the private placement and the anticipated use of proceeds from the private placement. Factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements in this release include, but are not limited to, market and other conditions, adverse global conditions, including macroeconomic uncertainty; inability to raise additional capital necessary to continue as a going concern; our history of losses and inability to achieve profitability going forward; the absence of FDA-approved allogenic, cell-based therapies for HLHS or other cardiac-related indications; ethical and other concerns surrounding the use of stem cell therapy or human tissue; our exposure to product liability claims arising from the use of our product candidates or future products in individuals, for which we may not be able to obtain adequate product liability insurance; the adequacy of our trade secret and patent position to protect our product candidates and their uses: others could compete against us more directly, which could harm our business and have a material adverse effect on our business, financial condition, and results of operations; if certain license agreements are terminated, our ability to continue clinical trials and commercially market products could be adversely affected; the inability to protect the confidentiality of our proprietary information, trade secrets, and know-how; third-party claims of intellectual property infringement may prevent or delay our product development efforts; the inability to successfully develop and commercialize our product candidates and obtain the necessary regulatory approvals; we cannot market and sell our product candidates in the U.S. or in other countries if we fail to obtain the necessary regulatory approvals; final marketing approval of our product candidates by the FDA or other regulatory authorities for commercial use may be delayed, limited, or denied, any of which could adversely affect our ability to generate operating revenues; we may not be able to secure and maintain research institutions to conduct our clinical trials; ongoing healthcare legislative and regulatory reform measures may have a material adverse effect on our business and results of operations; if we receive regulatory approval of Lomecel-B™ or any of our other product candidates, we will be subject to ongoing regulatory requirements and continued regulatory review, which may result in significant additional expense; being subject to penalties if we fail to comply with regulatory requirements or experience unanticipated problems with our therapeutic candidates; reliance on third parties to conduct certain aspects of our preclinical studies and clinical trials; interim, “topline” and preliminary data from our clinical trials that we announce or publish from time to time may change as more data become available and are subject to audit and verification procedures that could result in material changes in the final data; provisions in our certificate of incorporation and bylaws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the market price of our Class A common stock; we have never commercialized a product candidate before and may lack the necessary expertise, personnel and resources to successfully commercialize any products on our own or together with suitable collaborators; and in order to successfully implement our plans and strategies, we will need to grow our organization, and we may experience difficulties in managing this growth. Further information relating to factors that may impact the Company’s results and forward-looking statements are disclosed in the Company’s filings with the Securities and Exchange Commission, including Longeveron’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission on February 27, 2024, as amended by the Annual Report on Form 10-K/A filed March 11, 2024, its Quarterly Reports on Form 10-Q, and its Current Reports on Form 8-K. The forward-looking statements contained in this press release are made as of the date of this press release, and the Company disclaims any intention or obligation, other than imposed by law, to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Investor Contact 
Derek Cole
Investor Relations Advisory Solutions
derek.cole@iradvisory.com 


FAQ

What is the gross proceeds from Longeveron's warrant exercise?

Longeveron announced gross proceeds of $4.4 million from the exercise of existing warrants.

What is the exercise price of Longeveron's new warrants?

The new warrants have an exercise price of $2.50 per share.

What is the validity period of the new warrants issued by Longeveron?

The new warrants have a term of 24 months from the date of issuance.

How does Longeveron plan to use the proceeds from the warrant exercise?

Longeveron intends to use the net proceeds for clinical and regulatory development, regulatory approvals, capital expenditures, and general corporate purposes.

Who is the exclusive placement agent for Longeveron's warrant exercise?

H.C. Wainwright & Co. is the exclusive placement agent for the offering.

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