Bone Biologics Announces Exercise of Warrants for $2.1 Million Gross Proceeds

Rhea-AI Summary

Bone Biologics (Nasdaq: BBLG), a developer of orthobiologic products for spine fusion markets, has announced a $2.1 million gross proceeds from the exercise of warrants. The company entered into a definitive agreement for the exercise of existing warrants to purchase 781,251 shares of common stock at $2.43 per share. In exchange, Bone Biologics will issue new unregistered warrants to purchase up to 1,562,502 shares of common stock at $2.00 per share.

The new warrants will have varying terms: half with a five-year term and half with an eighteen-month term. H.C. Wainwright & Co. is acting as the exclusive placement agent. The offering is expected to close around August 2, 2024. Bone Biologics plans to use the net proceeds to fund clinical trials, maintain and extend its patent portfolio, and for working capital and general corporate purposes.

Positive

• Secured $2.1 million in gross proceeds through warrant exercise
• New warrants issued at a lower exercise price of $2.00 per share compared to $2.43 for existing warrants
• Funds to be used for clinical trials and patent portfolio maintenance

Negative

• Potential dilution for existing shareholders due to new warrant issuance
• New warrants issued in a private placement, not registered under Securities Act

Financial Analyst

The exercise of warrants for $2.1 million in gross proceeds is a significant development for Bone Biologics, a small-cap biotech company. This capital injection provides important funding for the company's ongoing operations and research initiatives. Here's a breakdown of the key financial implications:

• Immediate Capital: The $2.1 million gross proceeds strengthen the company's balance sheet, potentially extending its cash runway.
• Dilution Impact: The issuance of 781,251 new shares will dilute existing shareholders by approximately 7.8%, based on the company's outstanding shares as of their last filing.
• Warrant Dynamics: The new warrants issued (1,562,502) at a lower strike price of $2.00 could lead to further dilution if exercised, but also represent potential future capital of up to $3.125 million.
• Use of Proceeds: The allocation towards clinical trials and patent maintenance is important for Bone Biologics' product development pipeline, potentially accelerating their path to market.

While the capital raise is positive for near-term operations, investors should closely monitor the company's burn rate and progress in clinical trials to assess the long-term impact of this financing round.

Medical Research Analyst

From a medical research perspective, this financial move by Bone Biologics carries significant implications for their orthobiologic product development. The injection of $2.1 million into the company's coffers could potentially accelerate their research and development efforts in the spine fusion market. Here's what this could mean for their scientific progress:

• Clinical Trial Advancement: The additional funding allows for more robust and possibly expedited clinical trials, which are important for proving the efficacy and safety of their orthobiologic products.
• Patent Portfolio Expansion: Maintaining and extending their patent portfolio is vital in the competitive biotech landscape. This could involve filing new patents for novel discoveries or extending existing ones, thereby strengthening their intellectual property position.
• Research Continuity: The capital infusion provides a buffer against potential research disruptions due to funding constraints, ensuring ongoing experiments and studies can proceed without interruption.

However, it's important to note that while this funding is beneficial, the path from research to market in the orthobiologics field is long and complex. Investors should keep a close eye on upcoming announcements regarding clinical trial progress and any breakthroughs in their spine fusion technology.

Legal Expert

From a legal standpoint, this transaction involves several intricate components that warrant attention:

• Registered vs. Unregistered Securities: The shares issuable upon exercise of the existing warrants are registered under an effective S-1 registration statement, providing immediate liquidity. However, the new warrants and their underlying shares are being offered as unregistered securities under Section 4(a)(2) and Regulation D of the Securities Act.
• Registration Commitment: Bone Biologics has agreed to file a registration statement for the resale of shares underlying the new warrants. This commitment is important for future liquidity but also imposes ongoing compliance obligations.
• Disclosure Obligations: The company must navigate careful disclosure practices, especially regarding the use of proceeds and forward-looking statements about clinical trials and patent strategies.
• Nasdaq Compliance: This transaction may impact Bone Biologics' compliance with Nasdaq listing requirements, particularly concerning minimum bid price and public float.

While this transaction appears structured to comply with securities laws, it introduces complexity to the company's capital structure and ongoing regulatory obligations. Investors should monitor the timely filing of the promised registration statement and any potential impact on Nasdaq compliance.

BURLINGTON, Mass.--(BUSINESS WIRE)-- Bone Biologics Corporation (“Bone Biologics” or the “Company”) (Nasdaq: BBLG, BBLGW), a developer of orthobiologic products for spine fusion markets, today announced that it has entered into a definitive agreement for the exercise of certain existing warrants to purchase an aggregate of 781,251 shares of its common stock having an exercise price of $2.43 per share, originally issued in March 2024. The issuance of the shares of common stock issuable upon exercise of the existing warrants is registered pursuant to an effective registration statement on Form S-1 (File No. 333-276771).

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 1,562,502 shares of common stock (the “new warrants”). The new warrants will be immediately exercisable at an exercise price of $2.00 per share. New warrants to purchase 781,251 shares of common stock will have a term of five years from the issuance date, and new warrants to purchase 781,251 shares of common stock will have a term of eighteen months from the issuance date.

The offering is expected to close on or about August 2, 2024, subject to satisfaction of customary closing conditions. The gross proceeds to the Company from the exercise of the existing warrants and the issuance of new warrants are expected to be approximately $2.1 million, prior to deducting placement agent fees and estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the offering to fund clinical trials, maintain and extend its patent portfolio, and for 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 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 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 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 Bone Biologics

Bone Biologics was founded to pursue regenerative medicine for bone. The Company is undertaking work with select strategic partners that builds on the preclinical research of the NELL-1 protein. Bone Biologics is focusing development efforts for its bone graft substitute product on bone regeneration in spinal fusion procedures, while additionally having rights to trauma and osteoporosis applications. For more information, please visit www.bonebiologics.com.

Forward-Looking Statements

Certain statements contained in this press release, including, without limitation, statements regarding the completion of the offering, the satisfaction of customary closing conditions related to the offering and the intended use of proceeds therefrom, as well as the timing, implementation, and success of the Company’s pilot clinical study, the ability of the Company’s lead product candidate NB1 to provide rapid, specific and guided control over bone regeneration and show fusion success in humans, the ability of NB1 to compete in global markets, as well as statements containing the words “will,” “expect,” “intend,” “may,” and words of similar import, constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve both known and unknown risks and uncertainties. The Company’s actual results may differ materially from those contained in its forward-looking statements as a result of a number of factors, including, but not limited to, market and other conditions and risks generally associated with an undercapitalized developing company, as well as the risks contained under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and the Company’s other filings with the Securities and Exchange Commission. Except as required by applicable law, the Company undertakes no obligation to revise or update any forward-looking statements to reflect any event or circumstance that may arise after the date hereof.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240802380560/en/

LHA Investor Relations

Kim Sutton Golodetz

212-838-3777

kgolodetz@lhai.com

Source: Bone Biologics Corporation

FAQ

How much gross proceeds did Bone Biologics (BBLG) raise from the warrant exercise?

Bone Biologics (BBLG) raised approximately $2.1 million in gross proceeds from the exercise of existing warrants.

What is the exercise price of the new warrants issued by Bone Biologics (BBLG)?

The new warrants issued by Bone Biologics (BBLG) have an exercise price of $2.00 per share.

When is the expected closing date for Bone Biologics' (BBLG) warrant exercise offering?

The offering is expected to close on or about August 2, 2024, subject to satisfaction of customary closing conditions.

How does Bone Biologics (BBLG) plan to use the proceeds from the warrant exercise?

Bone Biologics (BBLG) intends to use the net proceeds to fund clinical trials, maintain and extend its patent portfolio, and for working capital and other general corporate purposes.