BioRestorative Therapies Announces Exercise of Warrants and Issuance of New Warrants in a Private Placement for $8.1 Million Gross Proceeds Priced At-the-Market
- None.
- The reduction of the exercise price of the existing warrants and the issuance of new warrants might dilute the value of existing shares for current shareholders.
Insights
The recent move by BioRestorative Therapies, Inc. to restructure warrant terms and secure approximately $8.1 million in gross proceeds reflects a strategic capital raising effort. The reduction in exercise price from the original terms to $2.33 per share is a notable concession that incentivizes warrant holders to commit capital now rather than later. This could imply an immediate need for liquidity by the company, possibly to fund ongoing clinical trials or operational expenses.
Furthermore, the issuance of new warrants at an exercise price of $2.43, slightly above the reduced price of the existing warrants, suggests a confidence in the company's future stock performance. The five-year term for the new warrants provides a long-term investment opportunity for holders but also indicates a timeline for expected value realization from the company's pipeline.
Investors should consider the dilutive effect of these transactions. The potential for an additional 2,513,685 shares, if the new warrants are exercised, could dilute existing shareholders' equity. However, this dilution could be offset by the capital infusion and its potential to accelerate value-creating projects within the company.
The transaction's compliance with Nasdaq's at-market rules and the use of private placement under Section 4(a)(2) of the 1933 Act indicates adherence to regulatory frameworks, minimizing legal risk for participants. The commitment to file a resale registration statement for the new warrants' underlying shares within 10 days post-closing ensures that the securities will eventually be tradable, enhancing their attractiveness to investors.
It's critical to note that the securities offered in the private placement are not initially registered, which restricts their immediate liquidity. This is a common trade-off in private placements, as investors exchange immediate liquidity for the potential of future gains. The company's obligation to register these shares for resale later provides a pathway to liquidity, aligning with investor interests and regulatory requirements.
Examining the industry context, BioRestorative Therapies is operating in the competitive and capital-intensive biotechnology sector, where companies frequently resort to creative financing mechanisms to fund research and development. The decision to reprice and issue warrants reflects a proactive approach to capital management that is often seen in the biotech industry, especially for clinical-stage companies that may not have products on the market generating revenue.
Investors typically scrutinize such transactions for signals about a company's growth prospects and risk profile. The willingness of warrant holders to exercise at the reduced price could be perceived as a vote of confidence in the company's prospects. However, the market's reception to this news will ultimately depend on the company's ability to deliver on its clinical and business milestones, which will drive long-term value creation.
MELVILEE, N.Y., Feb. 06, 2024 (GLOBE NEWSWIRE) -- BioRestorative Therapies, Inc. ("BioRestorative" or the “Company”) (NASDAQ: BRTX), a clinical stage company focused on stem cell-based therapies, today announced it has entered into agreements with certain holders of its existing warrants exercisable for 3,351,580 shares of its common stock, in the aggregate, to exercise their warrants at a reduced exercise price of
Roth Capital Partners is acting as the Company’s financial advisor for this transaction.
The shares of common stock issuable upon exercise of the warrants are registered for issuance pursuant to a registration statement on Form S-1, as amended (File No. 333-258611), which was declared effective by the Securities and Exchange Commission (“SEC”) on November 4, 2021 or for resale pursuant to a registration statement on Form S-3 (File No. 333-265052), which was declared effective by the SEC on June 16, 2022.
In consideration for the immediate exercise of the warrants for cash and the payment of
This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such jurisdiction.
About BioRestorative Therapies, Inc.
BioRestorative Therapies, Inc. (www.biorestorative.com) develops therapeutic products using cell and tissue protocols, primarily involving adult stem cells. Our two core programs, as described below, relate to the treatment of disc/spine disease and metabolic disorders:
• Disc/Spine Program (brtxDISC™): Our lead cell therapy candidate, BRTX-100, is a product formulated from autologous (or a person’s own) cultured mesenchymal stem cells collected from the patient’s bone marrow. We intend that the product will be used for the non-surgical treatment of painful lumbosacral disc disorders or as a complementary therapeutic to a surgical procedure. The BRTX-100 production process utilizes proprietary technology and involves collecting a patient’s bone marrow, isolating and culturing stem cells from the bone marrow and cryopreserving the cells. In an outpatient procedure, BRTX-100 is to be injected by a physician into the patient’s damaged disc. The treatment is intended for patients whose pain has not been alleviated by non-invasive procedures and who potentially face the prospect of surgery. We have commenced a Phase 2 clinical trial using BRTX-100 to treat chronic lower back pain arising from degenerative disc disease.
• Metabolic Program (ThermoStem®): We are developing a cell-based therapy candidate to target obesity and metabolic disorders using brown adipose (fat) derived stem cells to generate brown adipose tissue (“BAT”). BAT is intended to mimic naturally occurring brown adipose depots that regulate metabolic homeostasis in humans. Initial preclinical research indicates that increased amounts of brown fat in animals may be responsible for additional caloric burning as well as reduced glucose and lipid levels. Researchers have found that people with higher levels of brown fat may have a reduced risk for obesity and diabetes.
Forward-Looking Statements
This press release contains "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, and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events or results to differ materially from those projected in the forward-looking statements as a result of various factors and other risks, including, without limitation, those set forth in the Company's latest Form 10-K filed with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and the Company undertakes no obligation to update such statements.
CONTACT:
Email: ir@biorestorative.com
FAQ
What is the purpose of the agreements announced by BioRestorative Therapies, Inc.?
How many shares of common stock are the new warrants exercisable into?
What is the exercise price of the new warrants?
Are the securities offered in the private placement registered under the Securities Act of 1933?
What is the term of exercise for the new warrants?
