TELA Bio Announces Pricing of Public Offering of Common Stock and Pre-Funded Warrants

Rhea-AI Summary

TELA Bio has announced the pricing of a public offering comprising 12,000,000 shares of common stock at $2.25 per share and pre-funded warrants for 5,800,000 shares at $2.2499 per warrant. The offering is expected to generate $40 million in gross proceeds before expenses. The company has granted underwriters a 30-day option to purchase up to 2,670,000 additional shares. The offering, expected to close around October 24, 2024, will fund general corporate purposes, including sales, marketing, R&D, and working capital.

Positive

• Secured $40 million in gross proceeds through public offering
• Additional funding potential through 30-day option for 2.67M shares
• Strengthens working capital position for operations and growth

Negative

• Significant shareholder dilution through issuance of 12M new shares
• Additional potential dilution from 5.8M pre-funded warrants
• Further dilution possible if underwriters exercise 2.67M share option

Insights

Financial Analyst

This $40 million public offering represents a significant capital raise for TELA Bio, priced at $2.25 per share with 12 million common shares and 5.8 million pre-funded warrants. The pricing reflects a substantial dilution, which will impact existing shareholders. The warrant structure, with a minimal $0.0001 exercise price, essentially functions as deferred common stock.

The capital raise strengthens TELA's balance sheet, providing runway for sales expansion, R&D and operations. However, the dilutive nature and pricing below recent trading levels signals some market skepticism. The underwriter option for additional shares could bring total proceeds to nearly $46 million if exercised. The involvement of reputable underwriters Canaccord Genuity and Lake Street adds credibility to the offering.

MALVERN, Pa., Oct. 23, 2024 (GLOBE NEWSWIRE) -- TELA Bio, Inc. ("TELA"), a commercial-stage medical technology company focused on providing innovative soft-tissue reconstruction, today announced the pricing of an underwritten public offering of 12,000,000 shares of its common stock 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, collectively, for gross proceeds of $40 million, before deducting underwriting discounts and commissions and other estimated offering expenses and assuming no exercise of the pre-funded warrants. In addition, TELA has granted the underwriters a 30-day option to purchase up to an additional 2,670,000 shares of its common stock at the public offering price for the common stock, less underwriting discounts and commissions. All shares of common stock and pre-funded warrants are being offered by TELA. The offering is expected to close on or about October 24, 2024, subject to the satisfaction of customary closing conditions.

Canaccord Genuity and Lake Street Capital Markets are acting 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 is being 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 preliminary prospectus supplement relating to the offering has been filed with the SEC and a final prospectus supplement with the final terms of the offering will be filed with the SEC and will be 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, when available, 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 completion and 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, among others: risks and uncertainties related to market conditions and the satisfaction of customary closing conditions related to the public offering, and other risks and uncertainties related to the public offering, as well as the risks and uncertainties 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

What is the price per share for TELA Bio's October 2024 public offering?

TELA Bio priced its public offering at $2.25 per share of common stock.

How many shares and warrants are included in TELA Bio's 2024 public offering?

The offering includes 12,000,000 shares of common stock and pre-funded warrants for 5,800,000 shares.

How much money will TELA Bio raise from its October 2024 public offering?

TELA Bio expects to raise $40 million in gross proceeds before deducting underwriting discounts and other offering expenses.

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

TELA Bio intends to use the proceeds for general corporate purposes, including sales and marketing, R&D activities, administrative matters, working capital, and capital expenditures.