Molekule Group, Inc. Announces Closing of $10.0 Million Private Placement and Deferral of $6.0 million Principal Amortization Through 2025
08 Mayo 2023 - 6:30PM
Molekule Group, Inc. (“Molekule” or the “Company”) (Nasdaq:
MKUL), reported today the closing of its previously-announced
approximately $10 million private placement with a single
institutional investor.
The transaction consists of (i) 3,400,000
shares of the Company’s common stock, (ii) a Series A
Warrant to purchase up to 3,125,000 shares of common stock,
(iii) a Series B Warrant to purchase up to 6,250,000
shares of common stock, and (iv) a Pre-Funded Warrant to
purchase up to 2,850,000 shares of common stock. The Company
received gross proceeds of $9,971,500.
The Series A Warrant has an exercise price
of $1.60 per share, a 5% premium to the five-day volume-weighted
average price (“VWAP”) per share at signing; the Series B
Warrant has an exercise price of $1.84 per share, a 20% premium to
the five-day VWAP at signing; and the Pre-Funded Warrant has a
nominal exercise price of $0.01 per share. The Series A and
Series B Warrants become exercisable following the receipt of
stockholder approval and the filing and distribution of an
information statement to the Company’s stockholders; and the
Pre-Funded Warrant is currently exercisable. The Series A
Warrant terminates eight months after it becomes exercisable. The
Series B Warrants and the Pre-Funded Warrant terminate five
years after they become exercisable.
The Company also agreed to reduce the exercise
price of 1,500,000 outstanding warrants owned by the institutional
investor to $2.00.
In addition, as previously announced, on May 2,
2023, the Company reached an agreement in principal, subject to
final documentation, with Silicon Valley Bank, a division of First
Citizens Bank (“SVB”) to amend its mezzanine loan agreement so as
to provide for the deferral of principal payments from April 2024
to April 2025. The Company also reached an agreement in principal
with SVB, subject to final documentation, to amend our senior term
loan agreement so as to extend the maturity date from April 2026 to
March 2028. The amendment of its mezzanine loan agreement to defer
principal payments and the amendment of its senior term loan
agreement to extend the maturity date collectively result in a
deferral of approximately $6.1 million of principal payments
through Q1 2025. The Company believes that such additional
flexibility will support long-term growth as it continues to
aggressively market its enterprise Safe Air-as-a-Service platform,
conduct research and development and fund operations.
The securities described above were offered in a
private placement under Section 4(a)(2) of the Securities
Act of 1933, as amended (the “Act”) and Regulation D promulgated
thereunder, and have not been registered under the Act or
applicable state securities laws. Accordingly, the securities may
not be offered or sold in the United States except pursuant to an
effective registration statement or an applicable exemption from
the registration requirements of the Act and such applicable state
securities laws.
Pursuant to a registration rights agreement with
the investor, the Company has agreed to file an initial
registration statement with the Securities and Exchange Commission
(the “SEC”) covering the resale of the shares of common stock to be
issued to the investor and shares of common stock underlying the
warrants described above and agreed to use its best efforts to have
the registration statement declared effective as promptly as
practicable thereafter.
The Company plans to use the proceeds to support
the roll-out of its Safe Air-as-a-Service platform through
purchases of inventory and equipment and continued enhancement of
software and technology to support the evolving needs of enterprise
customers.
This press release shall not constitute an offer
to sell or the solicitation of an offer to buy any securities nor
will there be any sale of these securities in any state or other
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such state or other jurisdiction.
Advisors
The Benchmark Company and Roth Capital Partners
acted as the exclusive placement agents for the private placement.
Freshfields Bruckhaus Deringer US LLP acted as counsel to the
Company. ArentFox Schiff LLP acted as counsel to the placement
agents.
About Molekule
Molekule is on a mission to provide clean indoor
air to everyone, everywhere. With the largest range of proprietary,
FDA-cleared air purification devices on the market, Molekule is
providing consumers, business owners and medical professionals with
hardware and software solutions to better understand and improve
indoor air quality. Its Air Pro, Air Mini+ and Pūrgo™
purification devices can be applied to virtually any indoor space,
including homes, classrooms, offices, hospitals and more.
Forward-Looking Statements
This press release contains “forward-looking
statements” within the meaning of the “safe harbor” provisions of
the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are based upon current beliefs and
expectations of our management and are subject to known and unknown
risks and uncertainties. Words or expressions such as “expects,”
“anticipates,” “intends,” “plans,” “believes,” “estimates,” “may,”
“will,” “projects,” “could,” “should,” “would,” “seek,” “forecast,”
or other similar expressions help identify forward-looking
statements. Factors that could cause actual events to differ
include, but are not limited to:
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general economic conditions in
the markets where we operate; |
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the impact of the COVID-19
pandemic and related prophylactic measures; |
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expected timing of regulatory
approvals and product launches; |
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non-performance of third-party
vendors and contractors; |
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risks related to our ability to
successfully sell our products and the market reception to and
performance of our products; |
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our compliance with, and changes
to, applicable laws and regulations; |
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our limited operating
history; |
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our ability to manage
growth; |
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our ability to obtain additional
financing when and if needed; |
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our ability to expand product
offerings; |
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our ability to compete with
others in our industry; |
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our ability to protect our
intellectual property; |
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the ability of certain
stockholders to determine the outcome of matters that require
stockholder approval; |
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our ability to retain the listing
of our common stock on Nasdaq; |
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our ability to defend against
legal proceedings; |
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success in retaining or
recruiting, or changes required in, our officers, key employees or
directors; |
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the risk that the merger between
Molekule and Aura may not be completed; and |
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other economic, business,
competitive, and regulatory factors affecting the businesses of the
Company generally, including but not limited to those set forth in
Molekule’s filings with the SEC, including in the “Risk Factors”
and “Management’s Discussion and Analysis of Financial Condition
and Results of Operations” sections of Molekule’s latest annual
report on Form 10-K, as amended, and other SEC filings. |
Forward-looking statements are not guarantees of
future performance and involve risks and uncertainties, and actual
results may differ materially from those in the forward-looking
statements as a result of various factors. Although we believe that
the expectations reflected in the forward-looking statements are
reasonable based on information currently available, we cannot
assure you that the expectations will prove to have been correct.
Accordingly, you should not place undue reliance on these
forward-looking statements. In any event, these statements speak
only as of the date of this release. We assume no obligation to
revise or update any of the forward-looking statements to reflect
events or circumstances after the date of this release or to
reflect new information or the occurrence of unanticipated
events.
Media
ContactPress@molekule.com
Investor Relations ContactsRyan
TylerChief Financial Officer, MolekuleRyan.Tyler@molekule.comMATTIO
Communicationsmolekule@mattio.com
Molekule (NASDAQ:MKUL)
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