On February 8, 2023 Fortress Biotech, Inc. (Nasdaq: FBIO) ("Fortress" or "Company"), an innovative biopharmaceutical company focused on efficiently acquiring, developing and commercializing or monetizing promising therapeutic products and product candidates, reported that it has entered into definitive agreements for the issuance and sale of 16.6 million shares of its common stock in a registered direct offering priced at-the-market under Nasdaq rules (Press release, Fortress Biotech, FEB 8, 2023, View Source [SID1234626972]). The purchase price of each share is $0.835.

Schedule your 30 min Free 1stOncology Demo!
Discover why more than 1,500 members use 1stOncology™ to excel in:

Early/Late Stage Pipeline Development - Target Scouting - Clinical Biomarkers - Indication Selection & Expansion - BD&L Contacts - Conference Reports - Combinatorial Drug Settings - Companion Diagnostics - Drug Repositioning - First-in-class Analysis - Competitive Analysis - Deals & Licensing

                  Schedule Your 30 min Free Demo!

Certain directors and officers of the Company participated in the offering and purchased an aggregate amount of approximately $3.3 million of Fortress common stock at the same purchase price of $0.835 per share, which is at a premium to the consolidated closing bid price under Nasdaq rules.

In a concurrent private placement, investors in the registered direct offering will also receive a pro rata right to acquire, in the aggregate, securities exercisable into approximately 3.5% of the outstanding shares of common stock in each of the Company’s next 20 new operating subsidiaries (the "Contingent Subsidiary Securities"). The Contingent Subsidiary Securities will only be issued to the extent such a new operating subsidiary first consummates a specified corporate development transaction within the next five years, and will be exercisable immediately upon issuance, with an exercise period of 10 years, at an exercise price equal to the fair market value of one share of common stock of the subsidiary on the date of the corporate development transaction. The issuance of the rights and Contingent Subsidiary Securities are conditioned on the approval of the Company’s stockholders to the extent required by Nasdaq Listing Rule 5635.

H.C. Wainwright & Co. is acting as exclusive placement agent for the offering.

The offering is expected to close on or about February 10, 2023, subject to the satisfaction of customary closing conditions. The gross proceeds from the offering are expected to be approximately $13.9 million. Fortress expects to use the net proceeds from the offering for general corporate purposes and working capital.

The Fortress common stock is being offered in the registered direct offering by Fortress pursuant to a shelf registration statement on Form S-3 (File No. 333-258145) that was previously filed with the Securities and Exchange Commission ("SEC") on July 23, 2021, and subsequently declared effective on July 30, 2021. The Fortress common stock is being offered in the registered direct offering only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and the accompanying base prospectus relating to, and describing the terms of, the registered direct offering will be filed with the SEC and will be available on the SEC’s website at www.sec.gov. Electronic copies of the final prospectus supplement and the accompanying base prospectus relating to the registered direct offering, when available, may also be obtained by contacting H.C. Wainwright & Co., LLC, at 430 Park Ave., New York, New York 10022, by telephone at (212) 856-5711, or by email at [email protected].

The offer and sale of Contingent Subsidiary Securities and the securities issuable thereunder in the private placement have not been registered under the Securities Act of 1933, as amended ("Securities Act"), or any state securities laws, and are being made pursuant to an exemption from registration provided under Section 4(a)(2) of the Securities Act. Accordingly, such Contingent Subsidiary Securities and the securities issuable thereunder in the private placement may not be reoffered or resold in the United States except pursuant to an effective registration statement with the Securities and Exchange Commission (the "SEC") or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in this offering, nor shall there by any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.