Aditxt Announces Pricing of $4.2 Million Private Placement Priced At-The-Market under Nasdaq Rules

Rhea-AI Summary

Aditxt, Inc. (NASDAQ: ADTX) announced a private placement offering under Nasdaq rules, pricing the sale of convertible preferred stock, preferred stock, and warrants to purchase common stock, expected to raise approximately $4.2 million. The offering is set to close around May 6, 2024, with proceeds intended for merging expenses and general corporate purposes.

Positive

• Aditxt, Inc. is successfully raising approximately $4.2 million through a private placement offering, allowing the company to secure funds for future growth and strategic initiatives.

• The private placement offering is attracting investors, demonstrating confidence in Aditxt's business model and potential growth prospects.

Negative

• The private placement offering may lead to dilution for existing shareholders as new shares are issued, impacting their ownership percentage in the company.

• Aditxt, Inc. will incur placement agent fees and other offering expenses, potentially reducing the net proceeds available for operational activities.

Insights

Financial Analyst

In assessing Aditxt's recent private placement, it's essential to scrutinize the context and potential implications for investors. The company has structured the financing through a mix of Series C-1 and D-1 Preferred Stock, plus warrants, which is somewhat complex and merits a close look. With the conversion price of the preferred shares set at $2.47 - which should be compared to the current market price of the common shares to assess the dilution effect - it suggests an attempt to limit immediate dilution while providing new investors with potential upside. The timing of the warrant exercise price, set at a slight premium to the conversion price, also suggests confidence in future price appreciation, a common tactic to appeal to investors seeking both security and growth potential. Proceeds allocation is another critical point, with $1.0 million earmarked for obligations under a merger agreement, a move that indicates strategic M&A activity. The remainder is for general corporate purposes, in line with typical use of funds. The involvement of an exclusive placement agent like Dawson James Securities might also provide a layer of credibility and market expertise to a financing deal like this. The private placement nature of the deal restricts liquidity of the securities, which is a double-edged sword; it reduces immediate selling pressure but also limits investor access. However, the commitment to a registration statement for resale proposes a future pathway to liquidity. For a potential investor, the nature of this funding round is nuanced. It carries inherent risks typical of small-cap biotech funding, balanced with structured incentives intended to align with investor interests.

Biotechnology Market Analyst

Aditxt's financial maneuver can be evaluated with an eye on broader market trends within the biotech sector. The company is navigating challenges common to biotechs — the need for funding against a backdrop of high R&D costs and regulatory hurdles. The capital raise aligns with the industry's turn toward private placements as public markets show volatility, especially in the healthcare sector. Furthermore, the specificity of funding allocation to a merger agreement suggests strategic consolidation, a current trend in the biotech industry as companies seek to diversify portfolios and enhance pipeline capabilities. The choice to include a warrant component in the package underscores the sector's need to balance immediate funding requirements with long-term investor incentives, especially when facing the long timelines typical for product development and regulatory approval in biotech. The structuring of this deal reflects a cautious approach to financing - attempting to manage shareholder value while securing necessary capital. The balance struck here will likely resonate with attentive investors who are closely monitoring the biotech sector's financial health and strategic growth initiatives.

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)-- Aditxt, Inc. (NASDAQ: ADTX) (“Aditxt” or the “Company”), a company dedicated to discovering, developing, and deploying promising health innovations, today announced that it has entered into securities purchase agreements for the purchase and sale of an aggregate of 4,186 shares of the Company’s Series C-1 Convertible Preferred Stock, 4,186 shares of the Company’s D-1 Preferred Stock, and warrants to purchase approximately 1.65 million shares of common stock in a private placement priced at-the-market under Nasdaq rules.

The shares of Series C-1 Convertible Preferred Stock have a stated value of $1,000 per share. They are initially convertible into an aggregate of approximately 1.65 million shares of common stock at a conversion price of $2.47 per share. The Series D-1 Preferred Stock permits the holders thereof to vote together with the holders of the Company’s common stock on proposals to effectuate an increase in the shares of common stock that the Company is authorized to issue. The warrants will be exercisable commencing six months following the initial issuance date at an initial exercise price of $2.595 per share and expire five years from the date of issuance. The private placement is expected to close on or about May 6, 2024, subject to the satisfaction of customary closing conditions.

Dawson James Securities is acting as the exclusive placement agent for the offering.

The gross proceeds from the offering are expected to be approximately $4.2 million, prior to deducting the placement agent’s fees and other offering expenses payable by Aditxt. Aditxt intends to use $1.0 million of the net proceeds to fund certain obligations under its merger agreement with Evofem Biosciences, Inc. and the remainder of the net proceeds from the offering for working capital and other general corporate purposes.

The securities 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/or Regulation D promulgated thereunder and, along with the shares of common stock underlying the warrants, have not been registered under the Securities Act, or applicable state securities laws. Accordingly, the 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.

The Company has agreed to file a registration statement with the SEC covering the resale of the shares of common stock underlying the Series C-1 Convertible Preferred Stock and warrants on the later of the 30^th calendar day after the closing date and the second business day following the date on which the Company obtains stockholder approval of the issuance of the shares of common stock underlying the Series C-1 Convertible Preferred Stock and warrants.

This press release shall 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 Aditxt

Aditxt, Inc.® (“Aditxt”) (NASDAQ: ADTX) is an innovation platform dedicated to discovering, developing, and deploying promising innovations. Aditxt’s ecosystem of research institutions, industry partners, and shareholders collaboratively drives their mission to “Make Promising Innovations Possible Together.” The innovation platform is the cornerstone of Aditxt’s strategy, where multiple disciplines drive disruptive growth and address significant societal challenges. Aditxt operates a unique model that democratizes innovation, ensures every stakeholder’s voice is heard and valued, and empowers collective progress.

Aditxt has a diverse innovation portfolio, including Adimune™, Inc., which is leading the charge in developing a novel class of therapeutics for retraining the immune system to combat organ rejection, autoimmunity, and allergies. Adivir™, Inc. focuses on enhancing national and population health and impacting public health globally. Pearsanta™, Inc., delivers rapid, personalized, and high-quality lab testing accessible anytime, anywhere, led by its CLIA-certified and CAP-accredited clinical laboratory based in Richmond, VA.

For more information see: www.aditxt.com

Forward-Looking Statements

Certain statements in this press release constitute “forward-looking statements” within the meaning of federal securities laws. Forward-looking statements include statements regarding, the ability of the Company to consummation of the private placement, the satisfaction of the closing conditions of the private placement and the use of proceeds therefrom, the Company’s intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things, the Company’s ongoing and planned product and business development; the Company’s ability to finance and execute on its strategic M&A initiatives; the Company’s intellectual property position; the Company’s ability to develop commercial functions; expectations regarding product launch and revenue; the Company’s results of operations, cash needs, spending, financial condition, liquidity, prospects, growth and strategies; the industry in which the Company operates; and the trends that may affect the industry or the Company. Forward-looking statements are not guarantees of future performance and actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, as well as market and other conditions and those risks more fully discussed in the section titled “Risk Factors” in the Company’s most recent Annual Report on Form 10-K, as well as discussions of potential risks, uncertainties, and other important factors in the Company’s other filings with the Securities and Exchange Commission. All such statements speak only as of the date made, and the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240503279122/en/

Investor and Media Contact

IR@Aditxt.com

Source: Aditxt, Inc.

FAQ

What is the purpose of the private placement announced by Aditxt, Inc. (ADTX)?

The private placement offering aims to raise approximately $4.2 million to fund obligations under a merger agreement and support working capital and general corporate purposes.

When is the private placement expected to close for Aditxt, Inc. (ADTX)?

The private placement offering is projected to close on or about May 6, 2024, subject to customary closing conditions.

Who is acting as the exclusive placement agent for the private placement of Aditxt, Inc. (ADTX)?

Dawson James Securities is serving as the exclusive placement agent for the offering.

How many shares of the Company’s Series C-1 Convertible Preferred Stock are being offered in the private placement of Aditxt, Inc. (ADTX)?

A total of 4,186 shares of the Company’s Series C-1 Convertible Preferred Stock are being offered in the private placement.

What is the initial conversion price for the Series C-1 Convertible Preferred Stock shares in the private placement of Aditxt, Inc. (ADTX)?

The Series C-1 Convertible Preferred Stock shares are initially convertible into an aggregate of approximately 1.65 million shares of common stock at a conversion price of $2.47 per share.