ReShape Lifesciences (NASDAQ:RSLS) shares fell Friday after the firm announced the receipt of ~$2.5M in gross proceeds from the exercise of its existing warrants.
The health solutions company entered into a warrant exercise agreement with an existing accredited investor to exercise outstanding warrants to purchase up to 3.7M shares of the company's common stock.
The exercising holder received new unregistered warrants to purchase up to 3.7M shares as consideration for the immediate exercise of the existing warrants for cash.
In connection with the exercise, ReShape (RSLS) also agreed to reduce the exercise price of the 3.7M exercised warrants and 1.6M remaining unexercised warrants to $0.6665.
The new warrants are exercisable immediately upon issuance at $0.6665/share and have a term of exercise equal to seven and one-half years.
The warrant exercise agreement and the new warrants each include a beneficial ownership limitation that prevents any of the investors from owning over 4.99% of the company’s outstanding common stock at any time.
CEO Bart Bandy stated, "This financing, executed in a challenging capital markets environment, extends our cash runway through 2023. As important, these funds enable us to continue our direct-to-consumer marketing campaign, which, statistics, thus far, show is driving patient traffic to bariatric surgeons, resulting in increased demand for Lap-Band® procedures and increased sales for the company."
RSLS shares down ~10% pre-market