Windtree Therapeutics Inc (NASDAQ:WINT), a biotechnology company, reported on Monday that it has entered into a Securities Purchase Agreement and issued warrants in a private placement, resulting in approximately $12.9 million of gross proceeds.
On Thursday, Windtree entered into the agreement with certain buyers, issuing 16,099 shares of its Series C Convertible Preferred Stock and warrants to purchase up to 3,440,631 additional common shares. Notably, $9.5 million of the proceeds came through the cancellation of various outstanding notes and interest, as well as 5,500 shares of Series B Convertible Preferred Stock.
The company also issued additional preferred shares and warrants as compensation for placement agent fees and expenses and reimbursed the lead buyer's legal counsel fees. The private placement, which is expected to close today, subject to customary conditions, will fund working capital and general corporate purposes.
Windtree has committed to seeking shareholder approval for the issuance of common stock upon conversion of the preferred shares and exercise of the warrants, in compliance with Nasdaq Stock Market regulations. The company has also agreed to a 90-day restriction period, during which it will not issue any equity or equity-linked securities without the consent of the majority of the securities' holders.
The warrants, exercisable six months after issuance at $4.11 per share, will expire five years from the initial exercisability date. They include anti-dilutive provisions and allow for cashless exercise if no effective registration statement is available for the underlying common stock. Additionally, the warrants are subject to a beneficial ownership limitation, capping individual holders' ownership at a maximum of 4.99% or 9.99% of the outstanding common stock upon exercise.
Concurrently, Windtree entered into a Registration Rights Agreement with the buyers, agreeing to file a registration statement for the resale of shares underlying the preferred shares and warrants. The company is required to file this registration statement within 30 days of the closing date and to have it declared effective within 60 days, subject to certain conditions.
The private placement was exempt from registration under the Securities Act of 1933, as it did not involve a public offering. The buyers acquired the securities with no immediate intention of distribution, and the securities bear legends indicating their restricted status.
In other recent news, Windtree Therapeutics reported noteworthy financial and corporate developments. The biotechnology firm announced a 1-for-18 reverse stock split, reducing the number of outstanding common shares from approximately 9.2 million to about 0.5 million. This action aims to increase the market price per share of its common stock. In conjunction with this, Windtree Therapeutics secured an agreement to sell up to $35 million in common stock to an equity line investor and issued a convertible promissory note for $350,000, maturing in 2025, with a 10% interest rate. H.C.
Wainwright adjusted its price target on Windtree Therapeutics to $7.00, maintaining a Neutral rating on the stock following the reverse split. The firm is awaiting results from ongoing follow-on studies of its drug candidate istaroxime, which could potentially influence the future advancement of the drug into Phase 3 testing.
Windtree Therapeutics also regained compliance with the Nasdaq's minimum bid price requirement, sustaining a closing bid price of at least $1.00 for a minimum of 10 consecutive trading days. These recent developments are part of the company's ongoing efforts to secure additional capital and advance its clinical development programs.
InvestingPro Insights
As Windtree Therapeutics (NASDAQ:WINT) secures funding to bolster its working capital and general corporate purposes, insights from InvestingPro provide a deeper financial context for investors. Windtree Therapeutics currently holds a market cap of approximately $2.14 million, indicating a relatively small size within the biotech industry. Despite recent positive price movement with a 14.97% return over the last month, the long-term outlook shows significant challenges. The company's price has seen a substantial decrease of 85.57% over the past year, reflecting investor concerns and market conditions. Furthermore, with an adjusted P/E ratio of -0.14, the financial metrics suggest that the company is not currently profitable, aligning with an InvestingPro Tip that analysts do not anticipate profitability for this year.
InvestingPro Tips also highlight that Windtree Therapeutics is quickly burning through cash and has short-term obligations exceeding its liquid assets, which may be a point of concern for potential investors. With the company's stock price performing poorly over the last decade and a significant hit over the last six months, these factors underscore the importance of strategic financial management moving forward. For those looking to delve deeper into Windtree's financial health and future prospects, InvestingPro offers additional tips and analysis. Investors can use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription, gaining access to valuable insights that could inform investment decisions.
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