electroCore, Inc. Announces $9.3 Million Registered Direct Offering and Concurrent Private Placements Priced At Market Under Nasdaq Rules
ElectroCore announced a $9.3 million registered direct offering and concurrent private placements. The company will issue pre-funded warrants and common stock shares to institutional and accredited investors. Each share is priced at $6.4925, and accompanying warrants will be exercisable at $6.43 per share for five years. The proceeds will support sales, marketing, working capital, and general corporate activities. The transactions include significant investments from company directors and officers amounting to $5.645 million. The completion of these offerings is expected by June 5, 2024, pending customary closing conditions.
- ElectroCore will raise $9.3 million in gross proceeds from the offerings.
- Company directors and officers contribute $5.645 million, reflecting internal confidence.
- Funds will be used for sales, marketing, and general corporate purposes, potentially driving growth.
- Warrants are exercisable immediately, providing potential for quick capital influx.
- Offerings priced at market under Nasdaq rules, indicating regulatory compliance.
- Issuance of new shares and warrants may lead to shareholder dilution.
- The private placements and offerings without public registration could limit investor participation.
- Expenses related to the offerings will reduce net proceeds available for operational use.
- Potential risks if closing conditions are not met by June 5, 2024.
Insights
electroCore’s announcement of a $9.3 million registered direct offering and concurrent private placements is significant for investors, particularly given the context of the company's financial position. The issuance of pre-funded warrants and common stock, especially with institutional and accredited investors participating, indicates confidence in the company's prospects. The pricing at market under Nasdaq rules further suggests a level of transparency and valuation based on current market conditions.
Breaking down the details, the issuance involves both registered pre-funded warrants and unregistered warrants, which are exercisable immediately and expire in five years, showing a strategic move to raise capital swiftly while offering future value to investors. The effective offering price of $6.4925 per share and related warrant indicates a premium on current share value, presenting a potential growth opportunity for investors.
Importantly, the $5.645 million investment by directors and officers is a strong vote of confidence from within the company. This internal investment can often signal that management believes in the company's future growth prospects.
In the short term, this capital influx should bolster electroCore’s ability to fund key operations in sales, marketing and general corporate purposes, which is important for a company at their commercial stage. However, investors should also consider the dilution impact on current shares due to the issuance of new stock and warrants.
Analyzing the market implications, the $9.3 million capital raise through direct and private placements highlights electroCore’s strategy to leverage institutional investor backing and internal confidence for growth. This move could positively affect market perception, showcasing the company's capability to attract significant investments, which is a positive signal amid competitive market conditions.
The focus on using net proceeds for sales and marketing suggests that electroCore aims to expand its market footprint and enhance brand awareness. This aligns with typical growth strategies for commercial-stage companies in the bioelectronic medicine space, aiming to convert technological advancements into market share gains.
However, potential investors should weigh this against the broader market trends and competitive landscape in the bioelectronic medicine sector. The sector is technology-driven and highly competitive, where market adoption and clinical effectiveness play critical roles. ElectroCore's ability to efficiently deploy these funds towards impactful sales and marketing initiatives will be important in realizing value from this capital raise.
The issuance and sale of securities by electroCore, under Nasdaq rules and various SEC exemptions, highlight the company's adherence to regulatory frameworks while raising capital. This compliance is vital for maintaining investor trust and avoiding legal complications. The use of a 'shelf' registration statement for the pre-funded warrants offers a streamlined and expedited approach to raising capital, a common but effective method for public companies.
The distinction between the registered offering and the private placements, particularly the reliance on exemptions from registration under the Securities Act, necessitates careful legal structuring to ensure compliance. These securities are offered in non-public transactions, which reduces regulatory burdens but requires stringent adherence to specific exemptions and conditions to prevent any future legal or regulatory challenges.
For investors, understanding these legal nuances is crucial. The company's commitment to registering the shares issued in the private placements for resale post-closing provides an added layer of transparency and potential liquidity for these securities, which can be an attractive feature for both institutional and retail investors.
ROCKAWAY, N.J., June 03, 2024 (GLOBE NEWSWIRE) -- electroCore, Inc. (Nasdaq: ECOR) (“electroCore” or the “Company”), a commercial-stage bioelectronic medicine and wellness company, today announced that it has agreed to issue and sell to an institutional accredited investor an aggregate of 225,000 registered pre-funded warrants to purchase shares of common stock and unregistered warrants to purchase up to an aggregate of 112,500 shares of common stock. The pre-funded warrants were sold at a purchase price of
In a separate private placement, electroCore has also agreed to issue and sell 1,208,310 of its shares of common stock (or pre-funded warrants to purchase common stock) and warrants to purchase up to an aggregate of 604,150 shares of common stock, to certain institutional and accredited investors and directors and officers of the Company. Each share of common stock (or pre-funded warrant) is being sold together with one-half of one warrant at a combined effective offering price of
The aggregate gross proceeds to the Company from the issuance and sale of the securities described above is expected to be approximately
The issuance and sale of the securities described above were priced “at market” under the rules of the Nasdaq Capital Market. The offerings described above are expected to close on or about June 5, 2024, subject to the satisfaction of customary closing conditions.
The pre-funded warrants to be purchased by the institutional and accredited investor in the registered direct offering are being offered and sold by the Company pursuant to a “shelf” registration statement on Form S-3 (Registration No. 333-262223), including a base prospectus, previously filed with the Securities and Exchange Commission (the “SEC”) on January 18, 2022 and declared effective by the SEC on January 25, 2022. The offering of such securities is being made only by means of a prospectus supplement and the accompanying base prospectus that form a part of the registration statement. A final prospectus supplement and the accompanying base prospectus will be filed with the SEC and will be available on the SEC’s website located at http://www.sec.gov.
The offer and sale of the securities other than the pre-funded warrants to be purchased and sold in the registered direct offering are not covered by the registration statement, and are being made in transactions not involving a public offering and have not been registered in reliance on the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Rule 506(b) of Regulation D promulgated thereunder. The Company has agreed to register the shares of common stock issued in the private placements and the shares of common stock underlying the privately placed pre-funded warrants and warrants on a resale registration statement to be filed with the SEC following the closing of the transactions described above.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities, nor shall there be any sale of such 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 electroCore, Inc.
electroCore, Inc. is a commercial stage bioelectronic medicine and wellness company dedicated to improving health through its non-invasive vagus nerve stimulation (“nVNS”) technology platform. The Company’s focus is the commercialization of medical devices for the management and treatment of certain medical conditions and consumer product offerings utilizing nVNS to promote general wellbeing and human performance in the United States and select overseas markets.
For more information, visit www.electrocore.com.
Forward-Looking Statements
This press release and other written and oral statements made by representatives of electroCore may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements about the completion of the transactions described in this press release, the satisfaction of customary closing conditions related to such transactions, and the intended use of net proceeds therefrom, as well as statements regarding the Company’s ability to raise additional capital if needed, electroCore’s business prospects and clinical and product development plans; its pipeline or potential markets for its technologies; the timing, outcome and impact of regulatory, clinical and commercial developments; business prospects around its prescription gammaCore product, general wellness Truvaga and TAC-STIM products, and other potential new products and markets, and other statements that are not historical in nature, particularly those that utilize terminology such as “anticipates,” “will,” “expects,” “believes,” “intends,” and other words of similar meaning, derivations of such words and the use of future dates. Actual results could differ from those projected in any forward-looking statements due to numerous factors. Such factors include, among others, the ability to raise the additional funding needed to continue to pursue electroCore’s business and product development plans, the inherent uncertainties associated with developing new products or technologies, the ability to commercialize gammaCore, TAC-STIM, and Truvaga, electroCore’s results of operations and financial performance, inflation and currency fluctuations, and any expectations electroCore may have with respect thereto, competition in the industry in which electroCore operates and overall economic and market conditions. Any forward-looking statements are made as of the date of this press release, and electroCore assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements, except as required by law. Investors should consult all of the information set forth herein and should also refer to the risk factor disclosure set forth in the reports and other documents electroCore files with the SEC available at www.sec.gov.
Contact:
ECOR Investor Relations
(973) 302-9253
investors@electrocore.com
FAQ
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