TELA Bio Announces Closing of Public Offering of Common Stock and Pre-Funded Warrants and Full Exercise of the Underwriters’ Option to Purchase Additional Shares

Rhea-AI Summary

TELA Bio has completed its previously announced public offering, raising $46 million in gross proceeds. The offering included 14,670,000 shares of common stock at $2.25 per share and 5,800,000 pre-funded warrants at $2.2499 each. The underwriters fully exercised their option to purchase additional shares. Canaccord Genuity and Lake Street Capital Markets served as joint bookrunners. The company plans to use the proceeds for general corporate purposes, including sales and marketing, R&D activities, administrative matters, working capital, and capital expenditures.

Positive

• Successfully raised $46 million in gross proceeds
• Full exercise of underwriters' option to purchase additional shares
• Strengthened cash position for operational activities

Negative

• Significant shareholder dilution due to large number of new shares issued
• Stock price set at relatively low $2.25 per share
• Additional dilution potential from 5.8 million pre-funded warrants

Insights

Financial Analyst

The $46 million public offering significantly bolsters TELA Bio's balance sheet, with the company issuing 14.67 million shares at $2.25 per share and 5.8 million pre-funded warrants at $2.2499. This financing round represents substantial dilution but provides important working capital for commercial expansion and R&D initiatives.

The full exercise of the underwriters' option indicates strong institutional interest. The pre-funded warrants structure offers flexibility to investors while providing immediate capital access. With a market cap of about $69 million, this raise is significant relative to TELA's size and demonstrates confidence in their soft-tissue reconstruction technology, though existing shareholders face meaningful dilution.

MALVERN, Pa., Oct. 24, 2024 (GLOBE NEWSWIRE) -- TELA Bio, Inc. ("TELA"), a commercial-stage medical technology company focused on providing innovative soft-tissue reconstruction, today announced the closing of its previously announced underwritten public offering of 14,670,000 shares of its common stock, including the exercise in full of the underwriters’ option to purchase additional shares, at a price to the public of $2.25 per share and, in lieu of common stock to investors who so choose, pre-funded warrants to purchase 5,800,000 shares of common stock at a public offering price of $2.2499 per pre-funded warrant, which represents the per share public offering price for the shares of common stock less the $0.0001 per share exercise price for each pre-funded warrant, for gross proceeds of $46 million, before deducting underwriting discounts and commissions and other estimated offering expenses and assuming no exercise of the pre-funded warrants. All shares of common stock and pre-funded warrants were sold by TELA.

Canaccord Genuity and Lake Street Capital Markets acted as joint bookrunners for the offering.

TELA intends to use the net proceeds from the offering for general corporate purposes, including but not limited to sales and marketing, research and development activities, general and administrative matters, working capital and capital expenditures.

The offering was made pursuant to a shelf registration statement on Form S-3 (File No. 333-275511) that was declared effective by the Securities and Exchange Commission (“SEC”) on November 20, 2023. A final prospectus supplement and accompanying prospectus relating to the offering has been filed with the SEC and is available for free on the SEC’s website, located at www.sec.gov. Copies of the prospectus supplement and the accompanying prospectus relating to the offering may be obtained from Canaccord Genuity LLC, Attention: Syndication Department, One Post Office Square, Suite 3000, Boston, Massachusetts 02109, or by telephone at (617) 371-3900, or by email at prospectus@cgf.com; or Lake Street Capital Markets, LLC, Attention: Syndicate Department, 920 Second Avenue South, Suite 700, Minneapolis, Minnesota 55402, or by telephone at (612) 326-1305, or by email at syndicate@lakestreetcm.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, 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 that state or jurisdiction.

About TELA Bio, Inc.

TELA Bio, Inc. is a commercial-stage medical technology company focused on providing innovative technologies that optimize clinical outcomes by prioritizing the preservation and restoration of the patient's own anatomy. The Company is committed to providing surgeons with advanced, economically effective soft-tissue reconstruction solutions that leverage the patient's natural healing response while minimizing long-term exposure to permanent synthetic materials.

Caution Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of The Private Securities Litigation Reform Act of 1995. Words such as "may," "might," "will," "should," "believe," "expect," "anticipate," "estimate," "continue," "predict," "forecast," "project," "plan," "intend" or similar expressions, or statements regarding intent, belief, or current expectations are forward-looking statements and reflect the current beliefs of TELA's management. Such forward-looking statements include, without limitation, statements relating to the expected use of proceeds of the public offering of common stock and pre-funded warrants. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors that could cause actual results and events to differ materially and adversely from those indicated by such forward-looking statements including the risks set forth in the "Risk Factors" section and elsewhere in the prospectus supplement related to the public offering filed with the SEC and in our other filings with the SEC and available at www.sec.gov, including in our Annual Report on Form 10-K. Any forward-looking statements that we make in this announcement speak only as of the date of this press release, and TELA assumes no obligation to update forward-looking statements whether as a result of new information, future events or otherwise after the date of this press release, except as required under applicable law.

Investor Contact
Louisa Smith
ir@telabio.com

FAQ

How much did TELA Bio raise in its October 2024 public offering?

TELA Bio raised $46 million in gross proceeds before deducting underwriting discounts and other offering expenses.

What was the share price for TELA Bio's 2024 public offering?

The shares were offered at $2.25 per share, while pre-funded warrants were priced at $2.2499 each.

How many shares and warrants did TELA Bio issue in the October 2024 offering?

TELA Bio issued 14,670,000 shares of common stock and 5,800,000 pre-funded warrants.

How will TELA Bio use the proceeds from its 2024 public offering?

The proceeds will be used for general corporate purposes, including sales and marketing, R&D activities, administrative matters, working capital, and capital expenditures.