ContraFect Enters Into a Warrant Exercise Transaction for Proceeds of $9.6 Million
YONKERS, N.Y., June 27, 2023 (GLOBE NEWSWIRE) -- ContraFect Corporation (Nasdaq: CFRX), a clinical-stage biotechnology company focused on the discovery and development of direct lytic agents (DLAs), including lysins and amurin peptides as new medical modalities for the treatment of life-threatening, antibiotic-resistant infections, announces today that it has entered into a warrant exercise agreement with an existing accredited investor to exercise certain outstanding warrants to purchase an aggregate of 7.0 million shares of the company's common stock. In consideration for the immediate exercise of the existing warrants for cash, the exercising holder received new unregistered warrants to purchase an aggregate of 7.0 million shares of the company's common stock. In connection with the exercise, the company also agreed to reduce the exercise price of such existing warrants to $1.36, which is equal to the most recent closing price of the company's common stock on The Nasdaq Capital Market prior to the execution of the warrant exercise agreement.
The proceeds to the company from the exercise of the existing warrants are $9.6 million, prior to deducting fees to the financial advisor and estimated expenses. The company intends to use the net proceeds to support ongoing enrollment of patients in the Phase 1b/2 clinical study of intra-articular exebacase for the treatment of chronic prosthetic joint infections of the knee, filing of the Investigational New Drug application and the subsequent conduct of the Phase 1 clinical study of CF-370, the first engineered lysin targeting Gram-negative pathogens, working capital and general corporate purposes.
The new warrants each has an exercise price of $1.36 per underlying share and will be exercisable for a period of five years following certain stockholder approval. The company agreed to file a resale registration statement on Form S-3 within 120 days with respect to the shares of common stock issuable upon exercise of the new warrants. The warrant exercise agreement and the new warrants each include a beneficial ownership limitation that prevents any of the investors from owning more than 9.99% of the company's common stock outstanding immediately after giving effect to such exercise, which percentage may be increased at the warrant holder’s election upon 61 days’ notice to the company subject to the terms of such warrants, provided that such percentage may in no event exceed 19.99%.
Maxim Group LLC acted as the exclusive financial advisor for the transaction.
This press release contains, and our officers and representatives may make from time to time, “forward-looking statements” within the meaning of the U.S. federal securities laws. Forward-looking statements can be identified by words such as “projects,” “may,” “will,” “could,” “would,” “should,” “believes,” “expects,” “anticipates,” “estimates,” “intends,” “plans,” “potential,” “promise” or similar references to future periods. Examples of forward-looking statements in this release include, without limitation, statements regarding the consummation of the transactions, the terms of the transactions, the anticipated amount of proceeds from the warrant exercise and the intended use of proceeds. Forward-looking statements are statements that are not historical facts, nor assurances of future performance. Instead, they are based on ContraFect’s current beliefs, expectations and assumptions regarding the future of its business, future plans, strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties and changes in circumstances that are difficult to predict and many of which are beyond ContraFect’s control, including, without limitation, that ContraFect has and expects to continue to incur significant losses, ContraFect’s need for additional funding, which may not be available, the occurrence of any adverse events related to the discovery, development and commercialization of ContraFect’s product candidates such as unfavorable clinical trial results, insufficient supplies of drug products, the lack of regulatory approval, or the unsuccessful attainment or maintenance of patent protection, changes in management may negatively affect ContraFect’s business and other important risks detailed under the caption “Risk Factors” in ContraFect's Quarterly Report on Form 10-Q for the quarter ended March 31, 2023 and its other filings with the Securities and Exchange Commission. Actual results may differ from those set forth in the forward-looking statements. Any forward-looking statement made by ContraFect in this press release is based only on information currently available and speaks only as of the date on which it is made. Except as required by applicable law, ContraFect expressly disclaims any obligations to publicly update any forward-looking statements, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
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Released June 27, 2023