Carmell Announces Closing of Previously Announced PIPE Investment from Existing and New Investors to Support Commercial Build-out

Rhea-AI Summary

Carmell (CTCX) has closed its previously announced private placement, raising $1.85 million in gross proceeds through the issuance of 8,065,210 shares of common stock and an equal number of five-year warrants, both priced at $0.23 per share. The placement was conducted with new and existing investors at a slight premium to the December 23, 2024 closing price.

The warrants, if exercised following stockholder approval, could generate an additional $1.85 million in gross proceeds. Shares from the placement will become tradeable after SEC effectiveness of the resale registration statement, expected within 60-120 days. Brookline Capital Markets served as the exclusive placement agent.

According to Chairman Rajiv Shukla, the proceeds, combined with the recently announced Elevai Skincare acquisition agreement, position Carmell to build shareholder value through commercialization of their bio-aesthetic portfolio, product development, and strategic transactions.

Positive

• Raised $1.85 million in gross proceeds through private placement
• Potential additional $1.85 million from warrant exercise
• Placement priced at premium to market price
• Strategic acquisition of Elevai Skincare in progress

Negative

• Share dilution through issuance of 8,065,210 new shares
• Additional potential dilution from warrant exercise
• Funding subject to offering expenses and fees reducing net proceeds

Insights

Financial Analyst

The $1.85 million PIPE investment represents a critical capital injection for Carmell , priced at $0.23 per share with matching warrants. The deal structure is particularly noteworthy - the premium pricing to market suggests investor confidence, while the warrant coverage provides potential for additional $1.85 million in future funding. With a market cap of $5.8 million, this financing significantly strengthens the balance sheet, representing approximately 31.7% of current market value. The timing aligns strategically with their Elevai Skincare acquisition, providing operational runway for commercial expansion. However, the warrant overhang and potential dilution from 8.06M new shares plus warrants (if exercised) could pressure the stock price. The involvement of both new and existing investors adds credibility, though the relatively small size suggests institutional participation. This financing appears primarily focused on near-term operational needs rather than transformative growth capital.

Market Research Analyst

This financing deal reveals important dynamics in the bio-aesthetics sector. The modest premium pricing in a challenging market environment for small-cap biotech companies indicates reasonable investor appetite for Carmell's commercial strategy. The structure combining immediate equity with warrant upside is a common approach for companies transitioning from development to commercialization phase. The parallel Elevai Skincare acquisition suggests a strategic pivot toward revenue generation in the growing skincare market. However, the relatively small deal size and pricing point to continued market skepticism about early-stage bio-aesthetics companies. The 60-120 day registration timeline for share resale could create near-term selling pressure once effective. The warrant exercise price matching the share price doesn't provide additional upside incentive, though it does limit downside risk for investors.

PITTSBURGH, Jan. 03, 2025 (GLOBE NEWSWIRE) -- Carmell Corporation (Nasdaq: CTCX), a bio-aesthetics company focused on skin and hair health (“Carmell”, the “Company”, “we”, “our”, or “us”), today announced the closing of its previously announced private placement with new and existing investors pursuant to a securities purchase agreement, dated December 23, 2024, for the issuance and sale of 8,065,210 shares of its common stock and an equal number of five-year warrants both priced at $0.23 per share, in a private placement for aggregate gross proceeds of $1.85 million before deducting offering expenses and fees (the “Private Placement”). The Private Placement was priced at a slight premium to the CTCX closing price on December 23, 2024.

Shares issued in the Private Placement are eligible to be sold after the U.S. Securities and Exchange Commission (the “SEC”) has declared the resale registration statement effective. Carmell is to use commercially reasonable efforts to cause this registration statement to become effective within 60 days of the closing or, in the event of a full review by the SEC, 120 days of the closing.

The warrants, if exercised for cash following the Stockholder Approval (as defined in the securities purchase agreement), will result in up to $1.85 million additional gross proceeds to Carmell.

Said Mr. Rajiv Shukla, Chairman of Carmell, “The proceeds of this Private Placement, along with the recently announced definitive agreement to acquire Elevai Skincare, strongly position Carmell for the year ahead. We will systematically build shareholder value through the commercialization of our revolutionary bio-aesthetic portfolio, product development, and strategic transactions.”

The warrants may be exercised on the trading day immediately following the Stockholder Approval Date (as defined in the securities purchase agreement) and any time thereafter until the fifth anniversary of the warrant issue date to purchase up to an aggregate of 8,065,210 shares of CTCX common stock at an exercise price of $0.23 per share.

Brookline Capital Markets, a division of Arcadia Securities, LLC, served as the exclusive placement agent for the Private Placement.

About Carmell
Carmell is a bio-aesthetics company that utilizes the Carmell Secretome™ to support skin and hair health. The Carmell Secretome™ consists of a potent cocktail of growth factors and proteins extracted from allogeneic human platelets sourced from U.S. Food and Drug Administration-approved tissue banks. Over the past 7 years, the Company has extensively tested the technology underpinning the Carmell Secretome™. Additionally, the Company has developed a novel microemulsion formulation that enables delivery of lipophilic and hydrophilic ingredients without relying on the Foul Fourteen™, 14 potentially harmful excipients that other companies commonly use to impart texture, stability, and other desirable physicochemical attributes to cosmetic products. Carmell’s microemulsion formulations do not utilize mineral or vegetable oils and are designed to be non-comedogenic. The Company is also developing a line of men’s products and a line of topical haircare products. All products are tailored to meet the demanding technical requirements of professional care providers and discerning retail consumers. For more information, visit www.carmellcosmetics.com.

About Private Placement
The offer and sale of the shares of common stock sold in the Private Placement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and other applicable securities laws. The Company has agreed to file a registration statement with the Securities and Exchange Commission (the “SEC”) registering the resale of the shares of its common stock sold in the Private Placement (the “Resale Registration Statement”). This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, 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 registration or qualification under the securities laws of any such state or jurisdiction.

Forward-Looking Statements
This press release contains forward-looking statements that are based on beliefs, assumptions and information currently available. In some cases, you can identify forward-looking statements by the following words: “may,” “will,” “could,” “would,” “should,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “ongoing” or the negative of these terms or other comparable terminology. However, not all forward-looking statements contain these words. These statements involve risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Although we believe that we have a reasonable basis for each forward-looking statement contained in this press release, we caution you that these statements are based on a combination of facts and factors currently known by us and our projections of the future, about which we cannot be certain. Forward-looking statements in this press release include, but are not limited to, statements regarding the launch and commercialization of our products, the proceeds from the exercise of the warrants, the anticipated use of proceeds from the Private Placement, the special or annual meeting of stockholders to be held by Carmell to obtain the Stockholder Approval, the anticipated filing of the Resale Registration Statement, and the execution of our business strategy. We cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward-looking statements are subject to a number of significant risks and uncertainties that could cause actual results to differ materially from expected results, including, those described under the header “Risk Factors” in the Annual Report on Form 10-K filed by Carmell with the SEC on April 1, 2024, and in our other reports filed with the SEC. Most of these factors are outside of Carmell’s control and are difficult to predict. Furthermore, if the forward-looking statements prove to be inaccurate, the inaccuracy may be material. In light of the significant uncertainties in these forward-looking statements, you should not regard these statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all. Except as required by law, we undertake no obligation to publicly update any forward-looking statement contained herein to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this press release.

Contact:
Bryan Cassaday
bc@carmellcorp.com

FAQ

How much did Carmell (CTCX) raise in its January 2025 private placement?

Carmell raised $1.85 million in gross proceeds through the issuance of shares and warrants priced at $0.23 per share.

What is the exercise price and duration of CTCX warrants issued in January 2025?

The warrants have an exercise price of $0.23 per share and are exercisable for five years following stockholder approval.

How many new shares did CTCX issue in the January 2025 private placement?

Carmell issued 8,065,210 shares of common stock and an equal number of warrants in the private placement.

When can investors trade the new CTCX shares from the January 2025 private placement?

The shares can be traded after the SEC declares the resale registration statement effective, expected within 60-120 days of closing.