MIAMI - Avenue Therapeutics, Inc. (NASDAQ:ATXI), a pharmaceutical company specializing in neurologic disease treatments, has announced definitive agreements facilitating the immediate exercise of certain outstanding warrants, resulting in the expected gross proceeds of approximately $4.4 million before deductions.
This transaction involves the exercise of warrants to purchase 689,680 shares of common stock at a reduced price of $6.20 per share, considerably lower than the original exercise prices ranging from $22.545 to $116.25.
The involved warrants were originally issued on three separate dates: October 11, 2022, November 2, 2023, and January 9, 2024. The closing of this transaction is anticipated to take place around May 1, 2024, contingent on the fulfillment of standard closing conditions.
In conjunction with the cash exercise of these warrants, Avenue Therapeutics plans to issue new Series C and Series D warrants to the warrant holders. These new warrants will allow the purchase of up to an additional 689,680 shares of common stock at the same exercise price of $6.20 per share. The Series C warrants will be valid immediately upon issuance for five years, while the Series D warrants will be valid for eighteen months.
H.C. Wainwright & Co. is serving as the exclusive placement agent for the offering. The shares of common stock to be issued upon the exercise of the warrants are registered under the Securities Act of 1933, as amended, with the necessary registration statements already effective.
The issuance of the new warrants is being conducted through a private placement according to exemptions from registration requirements. Avenue has committed to registering the shares of common stock that will be issued upon exercising the new warrants with the Securities and Exchange Commission (SEC).
This financial move comes as Avenue Therapeutics continues to develop its portfolio, which includes a first-in-class asset for spinal and bulbar muscular atrophy named AJ201, an oral small molecule for CNS diseases called BAER-101, and IV tramadol, which is in Phase 3 clinical trials for the management of acute postoperative pain in adults.
The information in this article is based on a press release statement from Avenue Therapeutics.
InvestingPro Insights
Avenue Therapeutics (NASDAQ:ATXI) appears to be navigating through a challenging financial landscape. The company's market capitalization stands at a modest $3.66 million, reflecting the scale of its operations and its positioning within the pharmaceutical industry.
Despite this, the company holds an advantage by maintaining more cash than debt on its balance sheet, which is a positive indicator of financial health and could provide some stability in its ongoing projects and research endeavors.
Investors considering ATXI should note that the stock's price has fallen significantly over the past year, with a one-year price total return of -91.3%. This dramatic decline has brought the stock near its 52-week low, currently trading at only 6.61% of its 52-week high price. The recent exercise of warrants at a reduced price could be an attempt to inject liquidity and stabilize the company's financial footing.
Moreover, the Relative Strength Index (RSI) suggests that ATXI's stock is currently in oversold territory. This technical analysis metric may indicate a potential reversal or a corrective rally could be on the horizon, which could be of interest to technical traders and contrarian investors looking for entry points into the market.
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