Cassava Sciences Completes Dividend Distribution of Warrants to Shareholders
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Insights
The distribution of warrants by Cassava Sciences represents a strategic financial maneuver aimed at potentially raising capital and incentivizing shareholder loyalty. The structure of these warrants, including the Bonus Share Program, is designed to encourage early exercise, which could provide the company with a prompt influx of cash. This is particularly relevant given the exercise price of $33.00 per share, which is set against the backdrop of a Bonus Price Condition of $26.40 per share. The potential dilution effect of such an exercise should be a consideration for current shareholders and potential investors, as it could influence the stock's price and earnings per share.
Moreover, the ability to trade these warrants on the open market introduces a new layer of liquidity and potential speculation. Market participants may view the warrants' trading activity as a proxy for investor sentiment regarding the company's future prospects. The redemption feature, exercisable after April 15, 2024, allows the company to retract the warrants under certain conditions, thereby providing a measure of control over the dilution and cash flow implications of the warrant exercise.
From a legal standpoint, the issuance of warrants without registration under the Securities Act of 1933, due to the nature of the transaction, indicates compliance with securities regulations. However, the company's use of a shelf registration statement to register the shares underlying the warrants is a critical detail. This approach allows for a more expedited process of capital raising, should the warrants be exercised, by streamlining the securities' offering process. It is imperative for warrant holders to understand the terms detailed in the prospectus supplement and the Warrant Agreement, as these documents outline the rights, restrictions and obligations associated with the warrants, as well as the risk factors involved in such a speculative financial instrument.
The market's reception of Cassava Sciences' warrant distribution could be indicative of the company's perceived growth potential and the confidence investors have in its future performance. The early exercise incentive, through the Bonus Share Program, could be seen as an attempt to boost shareholder value in the short term. However, the long-term impact on the company's stock price and market capitalization will largely depend on the actual number of warrants exercised and the company's operational performance leading up to the Bonus Share Expiration Date. Monitoring the daily volume weighted average price (VWAP) will be essential in assessing market trends and the likelihood of the Bonus Share Condition being met, which could trigger early warrant exercises and affect the company's share price volatility.
- Shareholders of Record Received Warrants to Purchase Shares of Common Stock
- Warrants Trade on Nasdaq Under the Ticker “SAVAW”
- Warrant Holders Who Choose to Exercise During an Early Period Will Receive an Additional 0.5 of a Common Share Per Warrant
AUSTIN, Texas, Jan. 05, 2024 (GLOBE NEWSWIRE) -- Cassava Sciences, Inc. (Nasdaq: SAVA) ("Cassava Sciences" or the "Company") today announced the completion of a previously announced distribution of warrants (the “Warrants”) to its shareholders. The Warrants now trade on Nasdaq under the ticker SAVAW.
Stockholders received four (4) Warrants for each ten (10) shares of the Company’s common stock held as of December 22, 2023 (the “Record Date”), rounded down to the nearest whole number for any fractional warrant. As an example, a shareholder who owned 1,000 shares of Cassava Sciences as of the Record Date received a distribution of 400 Warrants on January 3, 2024. Each Warrant entitles the holder to purchase, at the holder’s sole and exclusive election, one share of Cassava Sciences’ common stock at an initial exercise price of
Warrant holders may cash-exercise their Warrants, or they may sell their Warrants on the open market. Cassava Sciences will receive cash proceeds only from Warrant holders who exercise their Warrants under the terms and conditions of a warrant agreement filed with the U.S. Securities and Exchange Commission (“SEC”).
All Warrants will expire on Friday, November 15, 2024, at 5:00 p.m. New York City time, unless redeemed by the Company before that date. The Warrants will be redeemable by the Company on or after April 15, 2024, upon 20 calendar days’ notice. Warrants will have no financial value after they expire or are redeemed by the Company, whichever comes first.
Details of Bonus Share Program
All Warrant holders may participate in the Bonus Share Program. The Bonus Share Fraction entitles a holder to receive an additional 0.5 of a share of common stock for each Warrant exercised (the “Bonus Share Fraction”) without payment of any additional exercise price. The right to receive the Bonus Share Fraction will expire at 5:00 p.m. New York City time (the “Bonus Share Expiration Date”) upon the earlier of (i) the first business day following the last day of the first 30 consecutive trading day period, commencing on or after January 3, 2024, in which the daily volume weighted average price (“VWAP”) of the shares of common stock has been at least equal to a specified price, initially
The distribution of the Warrants has not been registered under the Securities Act of 1933, as amended, because the issuance of a distribution in the form of a warrant for no consideration is not a sale or disposition of a security or interest in a security for value pursuant to Section 2(a)(3) of the Securities Act of 1933.
The Company has filed with the SEC a prospectus supplement, under its existing shelf registration statement, registering the shares of common stock underlying the Warrants. Warrant holders should carefully read this prospectus supplement, including the Risk Factors section included and incorporated by reference therein. Warrant Holders should also carefully read the Warrant Agreement as it contains important information about the terms and conditions of the Warrants.
Questions from shareholders regarding their financial accounts will need to be addressed by their financial broker/advisor. An augmented Q&A regarding this warrant distribution has been posted in the Investor’s section of the Company’s website, https://www.CassavaSciences.com
About Cassava Sciences, Inc.
Cassava Sciences is a clinical-stage biotechnology company based in Austin, Texas. Our mission is to detect and treat neurodegenerative diseases, such as Alzheimer’s disease. Our novel science is based on stabilizing—but not removing—a critical protein in the brain. Simufilam, our lead product candidate, is in clinical testing in a pair of Phase 3 clinical trials in patients with Alzheimer’s disease dementia. Our product candidates have not been approved by any regulatory authority, and their safety, efficacy or other desirable attributes have not been established.
For more information, please visit: https://www.CassavaSciences.com
For More Information Contact:
Eric Schoen, Chief Financial Officer
(512) 501-2450
ESchoen@CassavaSciences.com
The foregoing press release does not purport to be a complete summary of the Company’s warrant distribution and is qualified in its entirety by reference to the full text of the warrant distribution related agreements and other relevant documents filed with the SEC and incorporated by reference herein in their entirety.
Cautionary Note Regarding Forward-Looking Statements:
This Press Release and the Q&A referenced in it contain forward-looking statements, including statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, that may include but are not limited to: the development of new treatment options for people with Alzheimer’s disease; the long-term success of the Company; the Company’s ability to raise additional capital while protecting stockholders from excessive dilution; the design, scope, completion, intended purpose, or future results of our warrant distribution; any expected clinical results of our on-going Phase 3 studies of simufilam in Alzheimer’s disease; the treatment of people with Alzheimer’s disease dementia; the safety or efficacy of simufilam in people with Alzheimer’s disease dementia; expected cash use of proceeds from the warrant distribution, if any; the trading price and liquidly of the warrants; the continued development of an acceptable trading market for the warrants; whether and when warrants will be redeemed by the Company; whether the distribution of a warrant is a taxable event; comments made by our employees regarding the warrant distribution, simufilam, and potential benefits, if any, of our product candidates. These statements may be identified by words such as “may,” “anticipate,” “believe,” “could,” “expect,” “forecast,” “intend,” “plan,” “possible,” “potential,” and other words and terms of similar meaning.
Simufilam is our investigational product candidate. It is not approved by any regulatory authority in any jurisdiction and its safety, efficacy or other desirable attributes have not been established in patients.
Drug development and commercialization involve a high degree of risk, and only a small number of research and development programs result in commercialization of a product. Clinical results and analyses of our previous studies should not be relied upon as predictive of Phase 3 studies or any other study. Our clinical results from earlier-stage clinical trials may not be indicative of full results or results from later-stage or larger scale clinical trials and do not ensure regulatory approval. You should not place undue reliance on these statements or any scientific data we present or publish.
Forward looking statements are based largely on our current expectations and projections about future events. Such statements speak only as of the date of this news release and are subject to a number of risks, uncertainties and assumptions, including, but not limited to, those risks relating to the ability to conduct or complete clinical studies on expected timelines, to demonstrate the specificity, safety, efficacy or potential health benefits of our product candidates, any unanticipated impacts of the warrant distribution on our business operations, and including those described in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, and future reports to be filed with the SEC. The foregoing sets forth many, but not all, of the factors that could cause actual results to differ from expectations in any forward-looking statement. In light of these risks, uncertainties and assumptions, the forward-looking statements and events discussed in this Press Release and in the Q&A referenced in it are inherently uncertain and may not occur, and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Accordingly, you should not rely upon forward-looking statements as predictions of future events. Except as required by law, we disclaim any intention or responsibility for updating or revising any forward-looking statements contained in this news release. For further information regarding these and other risks related to our business, investors should consult our filings with the SEC, which are available on the SEC's website at www.sec.gov
No Offer or Solicitation
This Press Release and the Q&A referenced in it shall not constitute an offer to sell or the solicitation of an offer to buy, 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. A Form 8-A registration statement and prospectus supplement describing the terms of the warrants has been filed with the Securities and Exchange Commission (the "SEC") and is available on the SEC's website located at http://www.sec.gov. Warrant holders and holders of Company common stock should read the prospectus supplement carefully, including the Risk Factors section included and incorporated by reference therein. This press release contains a general summary of the warrants. Please read the full text of the warrant agreement carefully as it will contain important information about the terms of the warrants.
FAQ
How many Warrants did shareholders receive for each ten shares of the company’s common stock?
What is the initial exercise price for one share of Cassava Sciences’ common stock through the Warrants?
What is the Bonus Share Program and how does it work?
When do the Warrants expire?
What is the Bonus Share Expiration Date?
Has the distribution of the Warrants been registered under the Securities Act of 1933?
