Qualigen Therapeutics Announces $4.5 Million Private Placement of Convertible Preferred Shares

Rhea-AI Summary

Qualigen Therapeutics (NASDAQ:QLGN) has secured a $4.5 million private placement through the sale of Series A-2 Preferred Shares to institutional and accredited investors. The company sold 4,500 preferred shares at $1,000 per share, which are convertible into 1,236,263 common shares at a conversion price of $3.64 per share. Univest, serves as the exclusive placement agent, with the offering expected to close around November 19, 2024. The company will file a registration statement with the SEC for the resale of underlying common shares within fourteen days of closing.

Positive

• Secured $4.5 million in new funding through preferred shares placement
• Attracted institutional and accredited investors participation

Negative

• Potential dilution for existing shareholders upon conversion of preferred shares
• Additional share issuance may put downward pressure on stock price

Insights

Financial Analyst

This $4.5 million private placement represents a significant capital raise for Qualigen, though it comes with notable dilution potential. The conversion price of $3.64 per share, resulting in 1,236,263 potential new shares, indicates a 48% premium to the current market price. However, for a micro-cap company with a market cap under $2.5 million, this financing provides important working capital but at the cost of significant future dilution.

The structure using Series A-2 Preferred Shares offers some protection to current shareholders compared to a direct common stock offering, as the conversion is not immediate. However, the 14-day registration requirement for the underlying common shares suggests relatively quick potential dilution. The placement agent's fees and offering expenses will reduce the net proceeds below the $4.5 million gross amount, likely leaving the company with approximately $4 million in new capital.

Carlsbad, CA, Nov. 19, 2024 (GLOBE NEWSWIRE) -- Qualigen Therapeutics, Inc. (NASDAQ:QLGN) ("Qualigen" or the "Company"), Qualigen Therapeutics, Inc., is a life science company focused on developing platform treatments for adult and pediatric cancers, with the potential for orphan drug designations, announced today that it has entered into definitive securities purchase agreements with several institutional and accredited investors (the “Investors”) for the sale of its preferred shares. Qualigen sold an aggregate of 4,500 shares of its Series A-2 Preferred Shares, with a stated value of US$1,000 per share, for aggregate gross proceeds of US$4.5 million, before deducting placement agent fees and other offering expenses. The shares of Series A-2 Preferred Shares are initially convertible into an aggregate of 1,236,263 common shares of the Company at a conversion price of $3.64 per share.

Univest, LLC is acting as the exclusive placement agent for the offering.

The offering is expected to close on or about November 19, 2024, subject to satisfaction of customary closing conditions.

The securities offered in the private placement are being offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Act") and/or Rule 506(b) of Regulation D promulgated thereunder and have not been registered under the Act or applicable state securities laws. Accordingly, the securities may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (the "SEC") or an applicable exemption from such registration requirements.

The Company has agreed to file a registration statement with the SEC covering the resale of the common shares underlying the Series A-2 Preferred Shares and Warrants no later than fourteen days following the closing of this transaction.

This press release does 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 other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

About Qualigen Therapeutics, Inc.

For more information about Qualigen Therapeutics, Inc., please visit www.qlgntx.com.

Forward-Looking Statements

This news 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. The Company may in some cases use terms such as “predicts,” “believes,” “potential,” “continue,” “anticipates,” “estimates,” “expects,” “plans,” “intends,” “may,” “could,” “might,” “likely,” “will,” “should” or other words that convey uncertainty of the future events or outcomes to identify these forward-looking statements. The Company’s forward-looking statements are based on current beliefs and expectations of its management team that involve risks, potential changes in circumstances, assumptions, and uncertainties, including statements regarding the timing of the offering. Any or all of the forward-looking statements may turn out to be wrong or be affected by assumptions the Company makes that later turn out to be incorrect, or by known or unknown risks and uncertainties. These forward-looking statements are subject to risks and uncertainties including risks related to the Company’s ability to regain compliance with Nasdaq’s continued listing requirements, including the Company’s ability to file its Form 10-Q for the period ended September 30, 2024, or otherwise in the future, or otherwise maintain compliance with any other listing requirement of The Nasdaq Capital Market, the potential de-listing of the Company’s shares from The Nasdaq Capital Market due to its failure to comply with the Nasdaq’s continued listing requirement, or its alternatives, or otherwise in the future, and the other risks set forth in the Company’s filings with the Securities and Exchange Commission, including in its Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q. For all these reasons, actual results and developments could be materially different from those expressed in or implied by the Company’s forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which are made only as of the date of this news release. The Company disclaims any intent or obligation to update these forward-looking statements beyond the date of this news release, except as required by law. This caution is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Contact:
Investor Relations
ir@qlgntx.com.

FAQ

How much did Qualigen Therapeutics (QLGN) raise in their November 2024 private placement?

Qualigen Therapeutics raised $4.5 million through the sale of Series A-2 Preferred Shares at $1,000 per share.

What is the conversion price for QLGN's Series A-2 Preferred Shares?

The Series A-2 Preferred Shares are convertible at $3.64 per share into common stock.

How many common shares will QLGN's preferred shares convert into?

The Series A-2 Preferred Shares are convertible into 1,236,263 common shares of Qualigen Therapeutics.