180 Life Sciences Corp. (NASDAQ:ATNF), a pharmaceutical preparations company, has disclosed in a recent SEC filing dated October 17, 2024, that it entered into an agreement resulting in the full cash exercise of existing warrants and the issuance of new warrants.
According to the 8-K filing, on October 16, 2024, the company entered into a warrant inducement agreement with a holder of its existing warrants. The holder agreed to exercise warrants for purchasing up to 950,069 shares of common stock at $3.48 per share. In return, the company agreed to issue new unregistered warrants to purchase a number of shares equal to 200% of the shares issued upon the exercise of the existing warrants.
The cash exercise of the existing warrants, completed on October 16 and 17, brought in $3,306,240 for 180 Life Sciences Corp. before deductions for financial advisory fees and other expenses. This transaction was exempt from registration under Section 3(a)(9) of the Securities Act of 1933.
Following the exercise of the existing warrants, the company's issued and outstanding shares of common stock increased to 1,976,999. Additionally, the new warrants allow the holder to purchase up to 1,900,138 shares of common stock at an exercise price of $1.50 per share, exercisable immediately with a five-year term.
In other recent news, 180 Life Sciences Corp. has entered into a warrant inducement agreement, potentially generating $3.32 million in gross proceeds for the company. The company also announced its strategic shift to the online gaming industry, acquiring a back-end gaming platform and planning to launch a business-to-consumer online casino. A.G.P./Alliance Global Partners (NYSE:GLP) acted as the exclusive financial advisor for the transaction.
The company has also finalized a separation agreement with former executive, Sir Marc Feldmann, issuing him 57,328 shares of common stock and options for 20,000 shares. In the biotechnology field, the company announced preliminary findings of a clinical pharmacology study showing that one of its solid cannabidiol (CBD) formulations outperformed the FDA-approved epilepsy drug, Epidiolex.
In addition, 180 Life Sciences has regained compliance with Nasdaq's minimum stockholders' equity requirement and has been granted an extension by the Nasdaq Listing Qualifications Panel to remain listed on The Nasdaq Stock Market, provided it meets specific conditions by July 31, 2024.
InvestingPro Insights
Recent data from InvestingPro sheds additional light on 180 Life Sciences Corp.'s (NASDAQ:ATNF) financial position and market performance. The company's market capitalization stands at a modest $5.17 million, reflecting its current status as a small-cap pharmaceutical firm.
ATNF's stock has shown remarkable volatility recently, with InvestingPro data indicating a significant 269.85% return over the past week and a 155.33% return over the last month. This aligns with the InvestingPro Tip that the stock "generally trades with high price volatility." The recent warrant exercise and issuance could be contributing factors to this price movement.
Despite the recent positive price action, InvestingPro Tips caution that ATNF "suffers from weak gross profit margins" and is "not profitable over the last twelve months." This is corroborated by the reported operating income of -$8.93 million for the last twelve months as of Q2 2024. These financial metrics provide context to the company's need for additional funding through the warrant exercise.
Investors considering ATNF should note that InvestingPro offers 12 additional tips for this stock, providing a more comprehensive analysis of its investment potential. These insights could be particularly valuable given the company's recent financial maneuvers and volatile stock performance.
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