Agile Therapeutics Announces Exercise of Warrants for $4.8 Million Gross Proceeds
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Insights
The warrant exercise arrangement by Agile Therapeutics represents a strategic financial maneuver aimed at capital infusion to bolster the company's liquidity. The immediate exercise of warrants at a reduced price from $3.69 to $1.25 per share is a significant discount, which may indicate a pressing need for cash or an attempt to incentivize warrant holders. This is a common practice in the biotech industry, where companies often require substantial funding to support R&D and operations before reaching profitability.
However, the issuance of new warrants at an even lower exercise price of $1.00 could signal to the market a potential dilution of equity. Current shareholders might view this negatively as it can lead to a decrease in the value of their shares. The expected gross proceeds of $4.8 million, while providing immediate capital, must be weighed against the long-term impact on shareholder value. The dual-term structure of the new warrants, with varying expiration dates, introduces additional layers of complexity for investors assessing future equity dilution risks.
Agile Therapeutics' decision to reduce the exercise price of warrants and issue new ones can be seen as a strategic response to market conditions and internal capital needs. It is imperative to understand the competitive landscape of the women's healthcare sector, which is characterized by high competition and significant investment in innovation. The capital raised could support Agile Therapeutics in maintaining or advancing its competitive position.
Moreover, the role of H.C. Wainwright & Co. as the exclusive placement agent suggests a targeted approach to the offering, potentially aimed at sophisticated investors who understand the risks and long-term potential of the biotech market. The success of this offering will likely hinge on the company's ability to communicate its growth strategy and how these funds will be used to achieve milestones that can drive value creation.
The legal framework surrounding the issuance of registered and unregistered warrants is crucial in such transactions. Registered warrants allow for immediate public resale, which can provide liquidity to investors, whereas unregistered warrants often come with holding period requirements and are typically offered to accredited investors. Agile Therapeutics' adherence to effective registration statements for the shares issuable upon exercise of the warrants ensures regulatory compliance.
Additionally, it is important to note the role of the placement agent in mitigating legal risks associated with the offering. H.C. Wainwright & Co.'s involvement suggests a level of due diligence and regulatory expertise that is critical in executing such transactions while maintaining investor confidence and adhering to securities laws.
PRINCETON, N.J., Feb. 22, 2024 (GLOBE NEWSWIRE) -- Agile Therapeutics, Inc. (Nasdaq: AGRX) (“Agile Therapeutics” or the “Company”), a women's healthcare company, today announced the entry into a definitive agreement for the immediate exercise of certain outstanding warrants to purchase up to an aggregate of 3,892,572 shares of common stock of the Company originally issued in July 2022 and May 2023, having an exercise price of
H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.
In consideration for the immediate exercise of the warrants for cash, the Company will issue new unregistered warrants to purchase shares of common stock. The new warrants will be exercisable for an aggregate of up to 7,785,144 shares of common stock, at an exercise price of
The offering is expected to close on or about February 26, 2024, subject to satisfaction of customary closing conditions. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes.
The new warrants described above were offered in a private placement pursuant to an applicable exemption from the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”) and, along with the shares of common stock issuable upon their exercise, have not been registered under the 1933 Act, and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (“SEC”) or an applicable exemption from such registration requirements. The Company has agreed to file a registration statement with the SEC covering the resale of the shares of common stock issuable upon exercise of the new warrants.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state or 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 jurisdiction.
About Agile Therapeutics, Inc.
Agile Therapeutics is a women's healthcare company dedicated to fulfilling the unmet health needs of today’s women. Our product and product candidates are designed to provide women with contraceptive options that offer freedom from taking a daily pill, without committing to a longer-acting method. Our initial product, Twirla®, (levonorgestrel and ethinyl estradiol), a transdermal system, is a non-daily prescription contraceptive. Twirla is based on our proprietary transdermal patch technology, called Skinfusion®, which is designed to allow drug delivery through the skin. For more information, please visit the company website at www.agiletherapeutics.com. The Company may occasionally disseminate material, nonpublic information on the Company’s website, Twitter account (@agilether), and LinkedIn account.
Forward-Looking Statements
Certain information contained in this press release includes “forward-looking statements”, within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We may, in some cases use terms such as “predicts,” “believes,” “potential,” “continue,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “likely,” “will,” “should” or other words that convey uncertainty of the future events or outcomes to identify these forward-looking statements. Our forward-looking statements are based on current beliefs and expectations of our management team that involve risks, potential changes in circumstances, assumptions, and uncertainties, including statements regarding consummation of the offering, the satisfaction of closing conditions, our expected net proceeds and use of proceeds. Any or all of the forward-looking statements may turn out to be wrong or be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. These forward-looking statements are subject to risks and uncertainties including risks related to our ability to raise enough capital to fund our operations in the near term and long term, including our ability to obtain funding through public or private equity offerings, debt financings or other sources, on terms acceptable to us or at all, our ability to come into compliance with the Nasdaq Capital Market listing requirements, our ability to satisfy closing conditions applicable to the offering, the other risks set forth in our filings with the U.S. Securities and Exchange Commission, including For a more detailed description of the risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to our business in general, please refer to our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q. You are cautioned not to place undue reliance on these forward-looking statements, which are made only as of the date of this press release. We undertake no obligation to publicly update such forward-looking statements to reflect subsequent events or circumstance.
Contact:
Matt Riley
Head of Investor Relations & Corporate Communications
mriley@agiletherapeutics.com
FAQ
How many shares of common stock are being purchased through the exercise of warrants by Agile Therapeutics, Inc. (AGRX)?
What is the reduced exercise price per share for the warrants being exercised by Agile Therapeutics, Inc. (AGRX)?
Who is acting as the exclusive placement agent for the offering by Agile Therapeutics, Inc. (AGRX)?
What are the expected gross proceeds to Agile Therapeutics, Inc. (AGRX) from the exercise of the warrants?
What is the exercise price per share for the new unregistered warrants to be issued by Agile Therapeutics, Inc. (AGRX)?
