Guardion Health Sciences, Inc. (“Guardion” or the “Company”)
(Nasdaq: GHSI), a clinical nutrition company that offers a
portfolio of science-based, clinically supported products designed
to support the health needs of consumers, healthcare professionals
and providers and their patients, announced that it has entered
into a securities purchase agreement with certain institutional
investors to purchase 495,000 shares of Series C convertible
redeemable preferred stock and 5,000 shares of Series D
non-convertible redeemable preferred stock. Each share of Series C
and Series D preferred stock has a purchase price of $9.50 per
share, reflecting an original issue discount of 5% of the $10.00
stated value of each share. Each share of Series C preferred stock
is convertible into shares of the Company’s common stock at an
initial conversion price of $0.15768 per share (which is equal to
the average closing price of the Company’s common stock for the
five (5) trading days ended on November 28, 2022). Shares of the
Series C preferred stock are convertible at the option of the
holder at any time, conditioned upon and subsequent to receipt by
the Company of stockholder approval for a reverse split of its
common stock. The Company and the holders of the Series C preferred
stock also entered into a registration rights agreement to register
the resale of the shares of common stock issuable upon conversion
of the Series C preferred stock, if and when converted. Total gross
proceeds from the preferred stock offerings, before deducting
discounts, placement agent’s fees and other estimated offering
costs and expenses, are estimated to be approximately $4.75
million.
The Series C and Series D preferred stock permits the holders
thereof to vote together with the holders of the Company’s common
stock on a proposal expected to be presented to stockholders
shortly to grant discretionary approval to the Company’s Board of
Directors to execute a reverse stock split of the Company’s common
stock, in a specified range. The Series D preferred stock permits
the holders thereof to cast 1,000,000 votes per share on such
proposal, provided, however, that such votes must be cast in the
same proportions as the shares of common stock and Series C
preferred stock are voted on that proposal (excluding any shares of
common stock that are not voted on the proposal). Except as
required by law or expressly provided by the certificates of
designation, holders of the Series C and Series D preferred stock
will not be permitted to vote on any other matters to be presented
to stockholders for approval. The holders of the Series C and
Series D preferred stock have agreed not to transfer, offer, sell,
contract to sell, hypothecate, pledge or otherwise dispose of their
shares of preferred stock, unless and until receipt by the Company
of stockholder approval for a reverse split of its common
stock.
The holders of the Series C preferred stock will be entitled to
dividends, calculated on an as-if converted basis, equal to
dividends actually paid, if any, on shares of common stock. The
holders of the preferred stock will have the right to require the
Company to redeem their shares of preferred stock for cash at 105%
of the stated value of such shares commencing from (i) the earlier
of (A) the receipt of stockholder approval of the reverse stock
split, or (B) 60 days after the closing of the issuances of the
preferred stock, until (ii) 90 days after such closing. The Company
will have the option to redeem the preferred stock for cash at 105%
of the stated value commencing subsequent to receipt of stockholder
approval for the reverse stock split, subject to the rights of the
holders of the Series C preferred stock to convert their shares of
Series C preferred stock into shares of common stock prior to such
redemption.
The closing of the offerings is expected to occur on or about
November 29, 2022, subject to the satisfaction of customary closing
conditions. Additional information regarding the securities
described above and the terms of the offerings are included in a
Current Report on Form 8-K to be filed with the United States
Securities and Exchange Commission (the “SEC”).
Roth Capital Partners is acting as the exclusive placement agent
in connection with the offering.
The Series C Preferred Stock, the Series D Preferred Stock, and
the shares of common stock into which the shares of Series C
Preferred Stock are convertible into will be issued in reliance
upon the exemption from securities registration afforded by Section
4(a)(2) of the Securities Act of 1933, as amended (the “1933 Act”),
and/or Rule 506 of Regulation D as promulgated by SEC under the
1933 Act.
This press release shall not constitute an offer to sell or a
solicitation of an offer to buy these securities, nor shall 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 the registration or qualification under the securities laws of
any such state or other jurisdiction.
About Guardion Health Sciences, Inc.
Guardion Health Sciences, Inc. (Nasdaq: GHSI), is a clinical
nutrition company that offers a portfolio of science-based,
clinically supported products designed to support the health needs
of consumers, healthcare professionals and providers and their
patients. The Company’s combination of expertise and scientifically
supported products is the foundation of Guardion’s growing position
within the clinical nutrition marketplace. Information and risk
factors with respect to Guardion and its business may be obtained
in the Company’s filings with the SEC at www.sec.gov.
Forward-Looking Statement Disclaimer
With the exception of the historical information contained in
this news release, the matters described herein may contain
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. These forward-looking
statements contain information about our expectations, beliefs,
plans or intentions regarding our product development and
commercialization efforts, research and development efforts,
business, financial condition, results of operations, strategies or
prospects, and other similar matters. Statements preceded by,
followed by or that otherwise include the words “believes,”
“expects,” “anticipates,” “intends,” “projects,” “estimates,”
“plans,” “hopes” and similar expressions or future or conditional
verbs such as “will,” “should,” “would,” “may” and “could” are
generally forward-looking in nature and not historical facts,
although not all forward-looking statements include the
foregoing.
These statements are based on management’s current expectations
and assumptions about future events, which are inherently subject
to uncertainties, risks and changes in circumstances that are
difficult to predict, and involve unknown risks and uncertainties
that may individually or materially impact the matters discussed
herein for a variety of reasons that are outside the control of the
Company, including, but not limited to, the Company’s ability to
raise sufficient financing to implement its business plan, the
impact of the Company’s exploration of strategic alternatives, the
integration of new management team members, the implementation of
new financial, management, accounting and business software
systems, the integration of possible acquisition targets, the
impact of the Covid-19 pandemic, supply chain disruptions,
inflation and a potential recession on the Company’s business,
operations and the economy in general, the Company’s ability to
successfully develop and commercialize its proprietary products and
technologies, and the Company’s ability to maintain compliance with
Nasdaq’s listing requirements.
Readers are cautioned not to place undue reliance on these
forward-looking statements, as actual results could differ
materially from those described in the forward-looking statements
contained herein. Readers are urged to read the risk factors set
forth in the Company’s filings with the SEC, which are available at
the SEC’s website (www.sec.gov). The Company disclaims any
intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Investor Relations Contact:CORE IRScott
Arnold516-222-2560scotta@coreir.com
Media Relations Contact:Jules AbrahamDirector
of Public RelationsCORE IR917-885-7378julesa@coreir.com
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