On November 20, 2024 Lineage Cell Therapeutics, Inc. (NYSE American and TASE: LCTX), a clinical-stage biotechnology company developing allogeneic cell therapies for unmet medical needs, reported that it entered into definitive agreements with certain healthcare focused institutional investors and with Broadwood Partners, L.P. ("Broadwood"), an affiliate of Neal Bradsher, a member of Lineage’s board of directors, for the purchase and sale of up to an aggregate of 39,473,688 of Lineage’s common shares and accompanying warrants (the "common warrants") to purchase an aggregate of up to 39,473,688 of Lineage’s common shares at a combined purchase price of $0.76 per common share and accompanying common warrant, in a registered direct offering (Press release, Lineage Cell Therapeutics, NOV 20, 2024, View Source [SID1234648518]). Each common warrant will be exercisable for one common share at an exercise price of $0.91 per common share and will be exercisable commencing six months following their date of issuance and will expire on the earlier of (a) the three-year anniversary of the initial exercise date, and (b) the 90th day following the date of the public disclosure of the intent to advance OpRegen (also known as RG6501) into a multi-center phase 2 or 3 clinical trial which includes a control or comparator arm, or if the date of such public disclosure occurs prior to the initial exercise date of the common warrants, the 90th day following the initial exercise date. However, the common warrants that may be issued to Broadwood will not be exercisable until the later of (i) their date of issuance, which will be the date shareholder approval is obtained, and (ii) the six-month anniversary of the date of issuance of the common warrants to the unaffiliated institutional investors in the offering.
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H.C. Wainwright & Co. is serving as the exclusive placement agent for the offering.
The offering of the securities to the unaffiliated institutional investors is expected to close on or about November 21, 2024, subject to the satisfaction of customary closing conditions. The offering of the securities to Broadwood is expected to close upon obtaining shareholder approval to satisfy applicable NYSE American rules and to the satisfaction of customary closing conditions.
Lineage expects to receive $24 million in aggregate gross proceeds from the offering with respect to the investments by the unaffiliated institutional investors, and approximately $6 million in aggregate gross proceeds from the offering with respect to the investment by Broadwood, in each case, before deducting the placement agent’s fees and other offering expenses payable by Lineage. The potential additional gross proceeds to Lineage from the common warrants, if fully exercised on a cash basis, will be approximately $36 million. No assurance can be given that Lineage will obtain the shareholder approval required to satisfy applicable NYSE American rules in order to sell the securities in the offering to Broadwood or that any of the common warrants will be exercised. Lineage currently plans to use the net proceeds from the offering for working capital and general corporate purposes, including research and development expenses and capital expenditures.
The securities described above are being offered and sold by Lineage in a registered direct offering pursuant to a "shelf" registration statement on Form S-3 (File No. 333-277758) filed with the Securities and Exchange Commission (the "SEC") on March 7, 2024, and which was declared effective by the SEC on May 14, 2024. The offering of the securities in the registered direct offering is being made only by means of a base prospectus and a prospectus supplement that forms a part of the effective registration statement. A final prospectus supplement and the accompanying base prospectus relating to the 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 may also be obtained, when available, from H.C. Wainwright & Co., LLC at 430 Park Avenue, 3rd Floor, New York, NY 10022, by phone at (212) 856-5711 or e-mail at [email protected].