MIAMI - Longeveron Inc. (NASDAQ: LGVN), a clinical stage biotechnology company, announced the completion of a warrant exercise offering, raising approximately $11.4 million in gross proceeds. This funding is expected to support the advancement of its HLHS program and other clinical trials.
The company, known for developing cellular therapies for aging-related conditions, closed the exercise of warrants to purchase about 2.4 million shares of Class A common stock at $2.35 per share.
These warrants were initially issued in October 2023 and April 2024. Longeveron anticipates that the additional capital will aid in completing enrollment in the ongoing HLHS clinical trial and potentially support the trial's use for accelerated approval of its investigational product Lomecel-B™ for HLHS treatment.
In addition to the exercised warrants, new unregistered warrants were issued to purchase up to 4.8 million shares of Class A common stock. These new warrants, exercisable immediately at the same price of $2.35 per share, are set to expire in five years and twenty-four months from the issuance date, respectively.
The company's gross proceeds from the recent warrant exercise and a prior public offering, which closed on April 10, 2024, amount to approximately $11.4 million, excluding placement agent fees and offering expenses. Longeveron intends to allocate the net proceeds towards the clinical and regulatory development of Lomecel-B™ for various diseases, including HLHS and Alzheimer's disease, as well as for general corporate purposes.
The new warrants were offered through a private placement under specific securities regulations, and along with the shares of Class A common stock issuable upon their exercise, they have not been registered under the Securities Act or state securities laws.
Consequently, these securities may not be offered or sold in the United States absent registration or an applicable exemption. Longeveron has committed to filing a registration statement with the Securities and Exchange Commission for the resale of the shares issuable upon exercise of the new warrants.
This financial move comes as part of Longeveron's efforts to develop regenerative medicines, with Lomecel-B™ being its lead investigational product derived from the bone marrow of young, healthy adult donors. The therapy has potential applications across various disease areas due to its pro-vascular, anti-inflammatory, and tissue repair properties.
The information in this article is based on a press release statement from Longeveron.
InvestingPro Insights
As Longeveron Inc. (NASDAQ: LGVN) continues its journey in advancing regenerative medicine, the financial health and market sentiment surrounding the company offer valuable insights.
With a market capitalization of just $9.64 million, Longeveron is considered a small-cap company, which often means it could be more volatile in the stock market. This is reflected in the company's high price volatility, an important consideration for potential investors.
InvestingPro data shows that Longeveron has a negative P/E ratio, specifically -0.45 for the last twelve months as of Q4 2023. This metric suggests that the company is not currently profitable, a fact corroborated by the company's reported negative operating income margin of -2962.76% for the same period. The revenue decline of nearly 42% over the last twelve months further underscores the financial challenges Longeveron faces.
Despite these financial headwinds, Longeveron holds more cash than debt, which is a positive sign for the company's balance sheet strength. Still, the company is quickly burning through its cash, as indicated by the significant operating loss. This cash burn, coupled with the lack of dividend payments to shareholders, presents a risk profile that potential investors should consider.
For those looking to delve deeper into Longeveron's financials and stock performance, there are additional InvestingPro Tips available. For instance, the stock has experienced a notable decline over the past year, with a 92.48% drop in its one-year price total return as of the date provided.
Interested readers can find more comprehensive analysis and tips on Longeveron by visiting https://www.investing.com/pro/LGVN. With a total of 9 additional InvestingPro Tips, users can gain a more nuanced understanding of the investment landscape surrounding Longeveron. Those considering a subscription to InvestingPro can use the promo code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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