BioRestorative Therapies, Inc. (NASDAQ:BRTX), a company specializing in health and allied services, has entered into a new equity distribution agreement, according to a recent 8-K filing with the Securities and Exchange Commission. On Wednesday, the company announced it has signed an At The Market Offering Agreement with investment firm Rodman & Renshaw LLC, potentially allowing the sale of company stock valued at up to $3.6 million.
The agreement, effective November 6, 2024, gives BioRestorative Therapies the option to sell shares at its discretion through Rodman & Renshaw. However, the company is not obligated to sell any shares under this agreement. The terms stipulate that Rodman & Renshaw will exert commercially reasonable efforts to sell the shares based on the company's instructions, which may include price, time, or size limits.
BioRestorative Therapies will pay a commission of 3.0% of the gross sales proceeds to Rodman & Renshaw for their services. The sales arrangement is set to end upon the sale of all shares under the prospectus or if the agreement is terminated by either party.
This move comes as the company terminated a previous agreement with JonesTrading Institutional Services LLC, which was disclosed in April 2023. The prior agreement allowed for the sale of up to approximately $6.1 million in common stock. Before its termination on November 1, 2024, BioRestorative Therapies had sold $622,235 worth of shares under the former agreement.
The sales of shares under the new agreement will be pursuant to BioRestorative Therapies’ effective registration statement on Form S-3, filed on February 7, 2023, and the offering of the shares is detailed in the Prospectus Supplement filed with the SEC.
This announcement follows the company's strategic efforts to manage its capital and resources effectively. The information provided is based on the company's latest SEC filing and serves as an update to investors and the market on BioRestorative Therapies' financial strategies and agreements.
In other recent news, BioRestorative Therapies reported significant developments, including an increase in authorized shares for its stock incentive plan. The company also elected a Class I director and ratified Marcum LLP as its independent registered public accounting firm for the upcoming fiscal year. Roth/MKM elevated the company's stock target from $15 to $18, maintaining its Buy rating, following progress in its Phase 2 clinical trial for BRTX-100. BioRestorative Therapies ended Q2 2024 with a cash position of $14.7 million and its biocosmeceutical division has reached operational status.
The company secured a five-year agreement with Cartessa, promising minimum annual purchases in the low millions. BioRestorative Therapies also received a notice of allowance from the Japanese Patent Office for its ThermoStem platform, marking the fifth approval in Japan. Advanced discussions are underway to secure ThermoStem rights outside of the U.S. with a non-U.S. regenerative medicine company. This potential agreement is expected to provide non-dilutive upfront capital, as well as future milestones and royalty payments.
InvestingPro Insights
BioRestorative Therapies' recent equity distribution agreement aligns with its current financial position and market performance. According to InvestingPro data, the company has a market capitalization of $11.18 million, which contextualizes the potential $3.6 million stock sale under the new agreement.
InvestingPro Tips reveal that BRTX is "quickly burning through cash" and "not profitable over the last twelve months," which may explain the need for this new equity distribution arrangement. The company's revenue for the last twelve months as of Q2 2024 stands at $0.17 million, with a significant revenue growth of 35.49% over the same period. This growth, coupled with the InvestingPro Tip that "analysts anticipate sales growth in the current year," suggests that the company is focusing on expansion despite its current financial challenges.
It's worth noting that BRTX's stock "price has fallen significantly over the last five years," which could impact the effectiveness of the new equity offering. However, the company "holds more cash than debt on its balance sheet," potentially providing some financial flexibility as it moves forward with this new agreement.
For investors considering BRTX, it's important to note that InvestingPro offers 11 additional tips that could provide further insights into the company's financial health and market position. These additional tips, available through the InvestingPro product, could be valuable for understanding the full implications of BRTX's latest financial move.
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