Can-Fite Announces Exercise of Warrants for Approximately $5.0 Million in Gross Proceeds

Rhea-AI Summary

Can-Fite BioPharma (NYSE American: CANF) has announced a definitive agreement for the immediate exercise of certain outstanding warrants, expected to generate approximately $5.0 million in gross proceeds. The warrants, issued in January and November 2023, allow for the purchase of up to 2,857,143 American Depositary Shares (ADSs) at an exercise price of $1.75 per ADS.

In exchange for this immediate cash exercise, Can-Fite will issue new unregistered warrants to purchase up to 5,714,286 ADSs at $2.25 per ADS. These new warrants will have varying expiration dates. The transaction is expected to close around August 12, 2024. H.C. Wainwright & Co. is acting as the exclusive placement agent for this offering.

Can-Fite plans to use the net proceeds for research and development, clinical trials, and general corporate purposes. The company has agreed to file a registration statement with the SEC for the resale of ADSs issuable upon exercise of the new warrants.

Positive

• Immediate cash infusion of approximately $5.0 million from warrant exercise
• Issuance of new warrants with higher exercise price ($2.25 vs $1.75), potentially generating additional future capital
• Funds to be used for research, development, and clinical trials, supporting company's pipeline advancement

Negative

• Potential dilution for existing shareholders due to the issuance of new warrants
• New warrants have a lower exercise price ($2.25) compared to the expected share price growth, potentially limiting upside for the company

Insights

Financial Analyst

Can-Fite's warrant exercise deal is a double-edged sword for investors. On the positive side, it brings in $5 million in gross proceeds, bolstering the company's cash position for R&D and clinical trials. This could accelerate their drug development pipeline, potentially bringing products to market faster.

However, the issuance of new warrants at a higher exercise price of $2.25 per ADS (compared to the current $1.75) suggests potential future dilution. If these new warrants are exercised, it would lead to an additional 100% dilution compared to the current exercise. This could put downward pressure on the stock price in the long term.

The immediate impact might be neutral to slightly positive, as the cash infusion strengthens the balance sheet without immediate dilution. But investors should closely monitor the company's burn rate and progress in clinical trials to assess the long-term value proposition.

Biotech Industry Expert

This financial maneuver by Can-Fite is a common strategy in the biotech sector, especially for companies with promising pipelines but revenue. The $5 million influx is important for advancing their oncological and inflammatory disease treatments through costly clinical trials.

However, the real litmus test will be the allocation and efficiency of this capital. Can-Fite needs to demonstrate significant progress in their clinical trials, particularly in their lead candidates like Piclidenoson and Namodenoson. Investors should watch for upcoming trial results and regulatory milestones, as these will be the true drivers of long-term value.

The new warrants' structure, with varying expiration dates, provides a staggered potential for future funding, which could align well with the company's development timeline if managed strategically. This deal buys Can-Fite time, but the clock is ticking to show meaningful clinical progress.

RAMAT GAN, Israel, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Can-Fite BioPharma Ltd. (NYSE American: CANF) (TASE: CANF), a biotechnology company advancing a pipeline of proprietary small molecule drugs that address oncological and inflammatory diseases, today announced the entry into a definitive agreement for the immediate exercise of certain outstanding warrants to purchase up to an aggregate of 2,857,143 American Depositary Shares (ADSs), having an exercise price of $1.75 per ADS, issued by Can-Fite in January 2023 and November 2023. The ADSs representing ordinary shares issuable upon exercise of the warrants are registered pursuant to effective registration statements on Form F-3 (File No. 333-276000) and Form F-1 (File No. 333-269485). The closing of the offering is expected to occur on or about August 12, 2024, subject to satisfaction of customary closing conditions.

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, Can-Fite will issue new unregistered warrants to purchase up to 5,714,286 ADSs. The new warrants will have an exercise price of $2.25 per ADS, will be immediately exercisable until the five-year anniversary from the date of issuance with respect to 2,987,012 new warrants and the twenty-month anniversary from the date of issuance with respect to 2,727,274 new warrants.

The gross proceeds to Can-Fite from the exercise of the warrants are expected to be approximately $5.0 million, prior to deducting placement agent fees and offering expenses. The Company intends to use the net proceeds for funding research and development and clinical trials and for other 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 ADSs issuable upon 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. Can-Fite has agreed to file a registration statement with the SEC covering the resale of the shares of ADSs issuable upon exercise of the new warrants.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in this offering, 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 Can-Fite BioPharma Ltd.

Can-Fite BioPharma Ltd. (NYSE American: CANF) (TASE: CANF) is an advanced clinical stage drug development Company with a platform technology that is designed to address multi-billion dollar markets in the treatment of cancer, liver, and inflammatory disease. The Company's lead drug candidate, Piclidenoson recently reported topline results in a Phase III trial for psoriasis and is expected to commence a pivotal Phase III. Can-Fite's cancer and liver drug, Namodenoson, is being evaluated in a Phase IIb trial for the treatment metabolic dysfunction-associated steatohepatitis (MASH), a Phase III pivotal trial for hepatocellular carcinoma (HCC), and the Company is planning a Phase IIa study in pancreatic cancer. Namodenoson has been granted Orphan Drug Designation in the U.S. and Europe and Fast Track Designation as a second line treatment for HCC by the U.S. Food and Drug Administration. Namodenoson has also shown proof of concept to potentially treat other cancers including colon, prostate, and melanoma. CF602, the Company's third drug candidate, has shown efficacy in the treatment of erectile dysfunction. These drugs have an excellent safety profile with experience in over 1,600 patients in clinical studies to date. For more information please visit: www.canfite.com. 

Forward-Looking Statements

This press release may contain forward-looking statements, about Can-Fite’s expectations, beliefs or intentions regarding, among other things, market risks and uncertainties, its product development efforts, business, financial condition, results of operations, strategies or prospects. In addition, from time to time, Can-Fite or its representatives have made or may make forward-looking statements, orally or in writing. For example, the Company is using forward-looking statements when it discusses the timing and completion of the offering, the satisfaction of customary closing conditions related to the offering and the intended use of proceeds therefrom. Forward-looking statements can be identified by the use of forward-looking words such as “believe,” “expect,” “intend,” “plan,” “may,” “should” or “anticipate” or their negatives or other variations of these words or other comparable words or by the fact that these statements do not relate strictly to historical or current matters. Forward-looking statements relate to anticipated or expected events, activities, trends or results as of the date they are made. Because forward-looking statements relate to matters that have not yet occurred, these statements are inherently subject to known and unknown risks, uncertainties and other factors that may cause Can-Fite’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Important factors that could cause actual results, performance or achievements to differ materially from those anticipated in these forward-looking statements include, among other things, our history of losses and needs for additional capital to fund our operations and our inability to obtain additional capital on acceptable terms, or at all; uncertainties of cash flows and inability to meet working capital needs; the initiation, timing, progress and results of our preclinical studies, clinical trials and other product candidate development efforts; our ability to advance our product candidates into clinical trials or to successfully complete our preclinical studies or clinical trials; our receipt of regulatory approvals for our product candidates, and the timing of other regulatory filings and approvals; the clinical development, commercialization and market acceptance of our product candidates; our ability to establish and maintain strategic partnerships and other corporate collaborations; the implementation of our business model and strategic plans for our business and product candidates; the scope of protection we are able to establish and maintain for intellectual property rights covering our product candidates and our ability to operate our business without infringing the intellectual property rights of others; competitive companies, technologies and our industry; risks related to any resurgence of the COVID-19 pandemic and the war between Israel and Hamas; risks related to not satisfying the continued listing requirements of NYSE American; and statements as to the impact of the political and security situation in Israel on our business. More information on these risks, uncertainties and other factors is included from time to time in the “Risk Factors” section of Can-Fite’s Annual Report on Form 20-F filed with the SEC on March 28, 2024 and other public reports filed with the SEC and in its periodic filings with the TASE. Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Can-Fite undertakes no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

Contact

Can-Fite BioPharma
Motti Farbstein
info@canfite.com
+972-3-9241114

FAQ

How much gross proceeds is Can-Fite BioPharma (CANF) expecting from the warrant exercise?

Can-Fite BioPharma (CANF) is expecting to receive approximately $5.0 million in gross proceeds from the immediate exercise of certain outstanding warrants.

What is the exercise price of the new warrants issued by Can-Fite BioPharma (CANF)?

The new warrants issued by Can-Fite BioPharma (CANF) have an exercise price of $2.25 per ADS (American Depositary Share).

When is the expected closing date for Can-Fite BioPharma's (CANF) warrant exercise transaction?

The closing of Can-Fite BioPharma's (CANF) warrant exercise transaction is expected to occur on or about August 12, 2024, subject to customary closing conditions.

How does Can-Fite BioPharma (CANF) plan to use the proceeds from the warrant exercise?

Can-Fite BioPharma (CANF) intends to use the net proceeds for funding research and development, clinical trials, and for other working capital and general corporate purposes.