Athersys Inc. (NASDAQ: ATHX) has gained 27.47% to $1.49 in the current market price after extending the warrant exercise period. ATHX stock finished the previous trading session at $1.17 with a price range between $1.13 and $1.27.
Which warrants have been extended by ATHX?
Today, Athensys (ATHX) announced that it had amended its registration agreements to extend the exercise period for the warrants issued on August 17, 2022, and registered direct offering, among other changes. Additional warrants will be issued to the same warrant holder, a healthcare-focused institutional investor in the US.
ATHX is prohibited from issuing its common stock in certain variable rate transactions for a period of 180 days following the Closing Date (the “Standstill Period”), subject to certain exceptions. During the 12 months following the Closing Date, the Purchasers are also entitled to participate in certain future Athersys securities offerings up to 30 percent in the aggregate of any offered securities.
- An amendment to the Purchase Agreement (the “Purchase Agreement Amendment”) was entered into by ATHX and the Purchasers on September 22, 2022, which included extending, among other things, the exercise period of the Initial Warrants from five to seven years following the Closing Date (the “Warrant Amendment”).
- The Standstill Period is being reduced from 180 days to 150 days following the Closing Date by ATHC.
- As a result, the Participation Right was reduced from twelve months to six months following the Closing Date, as well as from 30 percent to 20 percent of any securities offered.
- If the Company proposes to offer and sell shares of offered securities to investors primarily for capital raising purposes during the six months following the Closing Date, the Purchasers are required to participate, subject to certain conditions.
- To reward the warrant holder, ATHX issued the same warrant holder an additional warrant that has an exercise price of $6.3850 after six months and can be exercised for an aggregate of 2,000,000 shares.
Is ATHX likely to benefit from these amendments?
As a result of this amendment, ATHX will have more financial flexibility going forward and will be committed to participating in future financings if requested by the investor who recently invested $12 million in Athersys. This amendment may help facilitate future transactions with financial and strategic investors as Athersys pursues licensing and other business development opportunities for its proprietary technology.