180 Life Sciences Corp. (NASDAQ:ATNF), a pharmaceutical preparations company, entered into a warrant inducement agreement on Wednesday, offering new warrants to a holder of its existing warrants. The agreement stipulates that the holder will exercise existing warrants for up to 954,118 shares of common stock at $3.48 per share, potentially generating $3.32 million in gross proceeds for the company before expenses.
In exchange for the holder's commitment, 180 Life Sciences will issue new unregistered warrants equal to 200% of the shares acquired through the existing warrant exercises. These new warrants are immediately exercisable with a five-year term and an exercise price of $1.50 per share.
The company plans to file a registration statement by November 15, 2024, to facilitate the resale of the common stock tied to the new warrants, ensuring the registration statement's effectiveness until all new warrants and shares are owned.
180 Life Sciences aims to use the net proceeds from this transaction to advance the commercialization of its technology gaming platform, as well as for working capital and other corporate purposes.
The new warrants include provisions for adjustments in certain corporate events and allow holders to benefit from securities or other assets in the case of a fundamental transaction. However, the exercise of new warrants is capped to prevent any single holder from owning more than 4.99% or 9.99% of the outstanding common stock post-exercise.
A.G.P./Alliance Global Partners (NYSE:GLP) acted as the exclusive financial advisor for the transaction, earning a fee of $232,000 and up to $65,000 for legal expenses.
In other recent news, 180 Life Sciences Corp. has announced a significant shift in its strategic focus, moving from its biotechnology roots to the burgeoning online gaming industry. The company recently acquired a back-end gaming platform, intending to launch a business-to-consumer online casino and later expand into business-to-business offerings. The company's advanced technology platform, which includes a proprietary system for cryptocurrency and fiat currency transactions, is expected to give it a competitive edge in the expanding blockchain casino market.
180 Life Sciences Corp. has also regained compliance with Nasdaq's minimum stockholders' equity requirement, a crucial step in facilitating its strategic shift. The company is also evaluating jurisdictions for initial licensing and sourcing games from third-party suppliers for its customer interface. The first online casino is expected to be operational by the end of Q1 2025, subject to funding availability and potential delays.
The company has also concluded a separation agreement with former executive, Sir Marc Feldmann, issuing him 57,328 shares of common stock and options for 20,000 shares. This development is part of ongoing adjustments within the company's executive structure.
In the field of biotechnology, 180 Life Sciences Corp. announced preliminary findings of a clinical pharmacology study showing that one of its solid cannabidiol (CBD) formulations outperformed the FDA-approved epilepsy drug, Epidiolex, in terms of absorption speed and maximum levels achieved. However, these findings are not expected to impact the company's financial results for the year ended December 31, 2024.
Lastly, the company has been granted an extension by the Nasdaq Listing Qualifications Panel to remain listed on The Nasdaq Stock Market, provided it meets specific conditions by July 31, 2024. Interim CEO Blair Jordan expressed confidence in the company's ability to meet these requirements.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on 180 Life Sciences Corp.'s (NASDAQ:ATNF) financial position and market performance, providing context to the company's recent warrant inducement agreement.
As of the latest available data, ATNF has a market capitalization of $9.97 million, reflecting its current valuation in the market. This relatively small market cap aligns with the company's efforts to raise capital through the warrant agreement, which could potentially generate $3.32 million in gross proceeds.
InvestingPro Tips highlight that ATNF holds more cash than debt on its balance sheet, which could be seen as a positive factor for potential investors. However, it's important to note that the company is not profitable over the last twelve months, with a negative EBITDA of -$8.83 million for the same period.
The stock has shown a significant return of 10.95% over the last week, which may be related to the announcement of the warrant agreement. However, longer-term performance has been challenging, with the stock price falling significantly over the last year (-84.64%) and five years.
For investors considering ATNF, InvestingPro offers 11 additional tips that provide a more comprehensive analysis of the company's financial health and market position. These insights can be valuable for understanding the broader context of ATNF's recent financial maneuvers and future prospects.
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