Nuwellis Announces Pricing of $2.0 Million Offering Priced At-The-Market Under Nasdaq Rules
Rhea-AI Summary
Nuwellis (Nasdaq: NUWE) has announced a $2.0 million registered direct offering priced at-the-market under Nasdaq rules. The company will sell 469,340 shares of common stock at $4.24 per share to institutional investors. Additionally, in a concurrent private placement, Nuwellis will issue warrants to purchase up to 938,680 shares of common stock at an exercise price of $3.99 per share, exercisable immediately with a five-year term.
The offering is expected to close around July 25, 2024. Roth Capital Partners is acting as the exclusive placement agent. Nuwellis plans to use the net proceeds for working capital and general corporate purposes. The offering is made pursuant to a shelf registration statement, with the warrants being offered in a private placement under Section 4(a)(2) of the Securities Act of 1933.
Positive
- Secured $2.0 million in gross proceeds through a registered direct offering
- Warrants issued with potential for additional capital if exercised
Negative
- Potential dilution of existing shareholders due to new share issuance
- Offering priced at $4.24 per share, which may be below current market price
Insights
Nuwellis' $2 million offering is noteworthy as it highlights the company's strategic approach to raising capital. The issuance of shares and warrants at the market price under Nasdaq rules indicates that the company is confident about its current valuation. This confidence is important as it can positively influence investor sentiment. Furthermore, raising funds for working capital and general corporate purposes without a specific project in mind might suggest a need for liquidity, which can be a double-edged sword. It provides financial flexibility but may also signal underlying cash flow challenges. The involvement of Roth Capital Partners as the exclusive placement agent lends credibility to the transaction, given their established track record in equity offerings.
The market's reception of Nuwellis' offering will largely depend on the perceived future potential of their technology aimed at fluid overload management. The medical technology sector is highly competitive and investors will be keen to see how these additional funds contribute to product development, market penetration and overall strategic initiatives. The exercise price of the warrants set at $3.99 per share, slightly below the offering price, could be attractive to investors and may lead to higher market activity once the warrants are exercisable. Additionally, the five-year term for these warrants suggests a long-term outlook, which could align with investors’ expectations for future growth and stability in Nuwellis' financial health.
The structure of the Nuwellis offering, particularly the concurrent private placement of warrants, adheres to regulatory frameworks under the Securities Act of 1933. Offering the warrants under Section 4(a)(2) and Regulation D indicates a private placement to accredited investors, which means the company is targeting sophisticated participants who are aware of the risks involved. Such private placements can often be completed more quickly and with less regulatory burden than public offerings. However, the legal overhang of the unregistered status of warrants and underlying shares means that future resale will be restricted unless an effective registration statement is in place, potentially limiting liquidity for investors in the short term.
MINNEAPOLIS, July 24, 2024 (GLOBE NEWSWIRE) -- Nuwellis, Inc. (Nasdaq: NUWE) (“Nuwellis” or the “Company”), a medical technology company focused on transforming the lives of people with fluid overload, today announced that it has entered into a definitive securities purchase agreement with certain institutional investors for the purchase and sale of 469,340 shares of the Company's common stock at a price of
In addition, in a concurrent private placement, the Company will issue to the investors warrants to purchase up to 938,680 shares of common stock. The warrants have an exercise price of
The closing of the registered direct offering and the concurrent private placement is expected to occur on or about July 25, 2024, subject to the satisfaction of customary closing conditions.
Roth Capital Partners is acting as exclusive placement agent for the offering.
The gross proceeds to Nuwellis from the registered direct offering and the concurrent private placement, before deducting the placement agent fees and other offering expenses payable by the Company, are expected to be approximately
The securities described above (excluding the warrants and the shares of common stock underlying the warrants) are being offered pursuant to a shelf registration statement on Form S-3 (File No. 333-280647), which was declared effective by the United States Securities and Exchange Commission (“SEC”) on July 9, 2024. The offering is being made only by means of a prospectus, including a prospectus supplement, which is part of the effective registration statement, that will be filed with the SEC. Electronic copies of the final prospectus supplement and accompanying prospectus may be obtained, when available, on the SEC's website at http://www.sec.gov or by contacting Roth Capital Partners, LLC at 888 San Clemente Drive, Suite 400, Newport Beach CA 92660, by phone at (800) 678-9147 or by accessing the SEC's website, www.sec.gov.
The warrants described above are being offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act”), and Regulation D promulgated thereunder and, along with the shares of common stock underlying such warrants, have not been registered under the Act, or applicable state securities laws. Accordingly, the warrants and the 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 Act and such applicable state securities laws.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described therein, nor shall there be any sales of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.
About Nuwellis
Nuwellis is a medical technology company dedicated to transforming the lives of patients suffering from fluid overload through science, collaboration, and innovation. The Company is focused on commercializing the Aquadex SmartFlow® system for ultrafiltration therapy. Nuwellis is headquartered in Minneapolis, with a wholly owned subsidiary in Ireland.
About the Aquadex SmartFlow® System
The Aquadex SmartFlow system delivers clinically proven therapy using a simple, flexible, and smart method of removing excess fluid from patients suffering from hypervolemia (fluid overload). The Aquadex SmartFlow system is indicated for temporary (up to 8 hours) or extended (longer than 8 hours in patients who require hospitalization) use in adult and pediatric patients weighing 20 kg or more whose fluid overload is unresponsive to medical management, including diuretics. All treatments must be administered by a health care provider, within an outpatient or inpatient clinical setting, under physician prescription, both having received training in extracorporeal therapies.
Forward-Looking Statements
Certain statements in this release may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this press release include, without limitation, statements with respect to the completion of the offering, the satisfaction of customary closing conditions related to the offering and the intended use of proceeds from the offering. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in this release, including, without limitation, uncertainties related to market conditions, the satisfaction of customary closing conditions related to the offering, those risks associated with our ability to execute on our commercialization strategy, the possibility that we may be unable to raise sufficient funds necessary for our anticipated operations, our post-market clinical data collection activities, benefits of our products to patients, our expectations with respect to product development and commercialization efforts, our ability to increase market and physician acceptance of our products, potentially competitive product offerings, intellectual property protection, our ability to integrate acquired businesses, our expectations regarding anticipated synergies with and benefits from acquired businesses, and other risks and uncertainties described in our filings with the SEC. Forward-looking statements speak only as of the date when made. Nuwellis does not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
CONTACTS
INVESTORS:
Robert Scott
Chief Financial Officer, Nuwellis, Inc.
ir@nuwellis.com
Vivian Cervantes
Gilmartin Group LLC
vivian.cervantes@gilmartinir.com
Source: Nuwellis, Inc.
FAQ
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