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PITTSBURGH, PA – Lipella Pharmaceuticals Inc. (NASDAQ:LIPO), a pharmaceutical company specializing in preparations with a market capitalization of $4.69 million, announced today that it has entered into a second amendment with Spartan Capital Securities, LLC, modifying certain terms of their previous placement agent agreement. According to InvestingPro analysis, the company maintains a healthy balance sheet with more cash than debt, though it faces challenges with rapid cash burn.
On Sunday, the company and Spartan Capital agreed to remove specific at-the-market restrictions and alter a tail provision, which now stipulates that Lipella must pay a fee equal to 10% of any investment received from accredited retail investors who participated in the initial offering within a year post-termination of the engagement if such investment is outside the offering.
The amendment also increases the maximum amount investors can purchase in a Mirror Offering to $7.2 million. Lipella committed to filing a Registration Statement for the shares of common stock issuable upon conversion and exchange of securities in the Mirror Offering within 30 days of each closing.
Furthermore, the parties agreed to reduce certain Variable Rate Transaction (JO:TCPJ) restrictions, allowing Lipella more flexibility to enter into such transactions after the offering concludes or ten business days post the effective date of the Registration Statement, given that at least $6 million of shares are sold in the offering. Additionally, Lipella is restricted from disposing of its securities within 90 days of the third closing of the offering without Spartan Capital’s consent unless all shares issued in connection with such closing are registered.
This strategic move by Lipella Pharmaceuticals aims to enhance the terms of its capital-raising activities and provide greater flexibility in its financial operations.
The details of this amendment are fully described in the Exhibit 10.1 of the 8-K filing with the SEC. This report is based on a press release statement and aims to present the facts without any endorsement of claims.
In other recent news, Lipella Pharmaceuticals Inc. has received FDA approval for an Expanded Access Program for its oral rinse product, LP-310, designed to treat oral lichen planus, a chronic inflammatory condition. This program allows patients access to the treatment outside of clinical trials, highlighting a significant development for those suffering from this condition. In parallel, Lipella Pharmaceuticals faces potential delisting from the Nasdaq due to non-compliance with listing rules, specifically the Minimum Stockholders’ Equity Requirement. The company has been granted a conditional extension to meet these requirements by April 14, 2025, but has cautioned about the uncertainty of meeting these obligations. Furthermore, Lipella experienced a setback as it failed to meet a quorum at a special stockholders meeting, preventing any action on the proposal intended for discussion. The meeting, originally set for earlier, has been rescheduled to December 20, 2024, to ensure shareholder participation and compliance with governance practices. Investors and stakeholders are advised to monitor Lipella’s updates closely, given these recent developments.
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