12-06-2021, 09:00 AM
Question about recent LGVN private placement and stock warrants
<!-- SC_OFF --><div class="md"><p>In the <a href="https://www.yahoo.com/now/longeveron-inc-announces-pricing-20-081700342.html">private placement press release</a> it says:</p> <blockquote> <p>Under the terms of the securities purchase agreement, the Company has agreed to sell approximately 1.17 million shares of its common stock and warrants to purchase 1.17 million shares of common stock. The warrants will be exercisable immediately upon the date of issuance and have an exercise price of $17.50 per share. The warrants will expire five years from the date of issuance. The purchase price for one share of common stock and one corresponding warrant will be $17.50. The gross proceeds to the Company from the private placement are estimated to be approximately $20.5 million before deducting the placement agent's fees and other estimated offering expenses. The offering is expected to close on or about December 3, 2021, subject to the satisfaction of customary closing conditions.</p> </blockquote> <p>So if I'm reading this right, LGVN sold 1.17m shares of common stock and warrants to purchase an additional 1.17m shares with a strike price of $17.50 for a gross proceed of $20.5 million (the wording isn't exactly clear -- the warrants have a strike price of $17.50 for sure but were the common stocks sold for $17.50 each as well? I would assume so).</p> <p>1.17 * $17.50 = $20.475 million. That means the premium of the warrants cost 0.025million or $25,000 or basically none relative to the stock value. Is this a common thing when it comes to private placements? Don't warrants usually have much higher premiums? Am I missing something? Thanks for any insight.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/Vortastic"> /u/Vortastic </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/r9y6gy/question_about_recent_lgvn_private_placement_and/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/r9y6gy/question_about_recent_lgvn_private_placement_and/">[comments]</a></span>Kind Regards R
<!-- SC_OFF --><div class="md"><p>In the <a href="https://www.yahoo.com/now/longeveron-inc-announces-pricing-20-081700342.html">private placement press release</a> it says:</p> <blockquote> <p>Under the terms of the securities purchase agreement, the Company has agreed to sell approximately 1.17 million shares of its common stock and warrants to purchase 1.17 million shares of common stock. The warrants will be exercisable immediately upon the date of issuance and have an exercise price of $17.50 per share. The warrants will expire five years from the date of issuance. The purchase price for one share of common stock and one corresponding warrant will be $17.50. The gross proceeds to the Company from the private placement are estimated to be approximately $20.5 million before deducting the placement agent's fees and other estimated offering expenses. The offering is expected to close on or about December 3, 2021, subject to the satisfaction of customary closing conditions.</p> </blockquote> <p>So if I'm reading this right, LGVN sold 1.17m shares of common stock and warrants to purchase an additional 1.17m shares with a strike price of $17.50 for a gross proceed of $20.5 million (the wording isn't exactly clear -- the warrants have a strike price of $17.50 for sure but were the common stocks sold for $17.50 each as well? I would assume so).</p> <p>1.17 * $17.50 = $20.475 million. That means the premium of the warrants cost 0.025million or $25,000 or basically none relative to the stock value. Is this a common thing when it comes to private placements? Don't warrants usually have much higher premiums? Am I missing something? Thanks for any insight.</p> </div><!-- SC_ON --> submitted by <a href="https://www.reddit.com/user/Vortastic"> /u/Vortastic </a> <br/> <span><a href="https://www.reddit.com/r/investing/comments/r9y6gy/question_about_recent_lgvn_private_placement_and/">[link]</a></span> <span><a href="https://www.reddit.com/r/investing/comments/r9y6gy/question_about_recent_lgvn_private_placement_and/">[comments]</a></span>Kind Regards R