Therapeutic Approach
 

Ritter Pharmaceuticals Announces Agreement for $6.0 Million At-Market Private Placement of Series B Convertible Preferred Stock and Warrants

LOS ANGELES, Oct. 31, 2018 (GLOBE NEWSWIRE) — Ritter Pharmaceuticals, Inc. (RTTR) (“Ritter Pharmaceuticals” or the “Company”), a developer of novel therapeutic products that modulate the gut microbiome to treat gastrointestinal diseases (GI) with an initial focus on the development of RP-G28, a drug candidate with the potential to be the first FDA-approved treatment for lactose intolerance (LI), today announced that it has entered into a definitive agreement with certain accredited investors, including two current institutional holders of our Series A convertible preferred stock, a key vendor and a member of the Company’s board of directors, for a private placement of newly designated Series B convertible preferred stock and warrants.

The private placement is expected to close on November 2, 2018, subject to satisfaction of customary closing conditions. At closing, the Company expects to receive gross proceeds of approximately $6.0 million, before deducting placement agent fees and other offering expenses payable by the Company.

Ritter intends to use the net proceeds from the private placement to fund operations, including the Company’s ongoing Phase 3 clinical trial for RP-G28 through its completion and dissemination of top-line results, and for working capital and general corporate purposes.

The securities being offered in the private placement consist of 6,000 shares of a newly designated Series B convertible preferred stock of the Company, with a stated value of $1,000 per share and convertible into shares of our common stock at an initial conversion price per share of $1.30 (subject to adjustment), which is above the $1.23 per share closing price of our common stock as reported on the Nasdaq Capital Market on October 30, 2018. In addition, each investor will receive a warrant to purchase a number of shares of common stock equal to 50% of the aggregate number of shares of common stock into which their Series B convertible preferred stock is initially convertible. The warrants will be exercisable immediately for a five-year period and have an initial exercise price of $1.30 per share (subject to adjustment). Certain investors in the private placement who currently own shares of our Series A convertible preferred stock will also exchange, on a 1-for-1 share basis, their Series A preferred shares for shares of a newly designated Series C convertible preferred stock of the Company, with a stated value of $1,000 per share and convertible into shares of our common stock at an initial conversion price per share of $1.64 (subject to adjustment). The maximum aggregate number of shares of common stock that may be issued by the Company upon conversion of the Series C convertible preferred stock will be limited to 1,146,354 shares, representing 19.99% of the shares of our common stock outstanding immediately prior to execution of the definitive agreement for the private placement, unless we obtain stockholder approval to issue shares in excess of the Exchange Cap in accordance with applicable rules of the Nasdaq Capital Market.

A.G.P./Alliance Global Partners is serving as the exclusive placement agent for the transaction.

The securities issued and sold in the private placement have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or any state securities laws, and may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from the registration requirements of the Securities Act. The Company has agreed to file a registration statement with the Securities and Exchange Commission to register the resale of the shares of common stock issuable upon conversion of the Series B preferred shares and the Series C preferred shares and upon exercise of the warrants described above.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state. Any offering of the securities under the resale registration statement described above will only be by means of a prospectus.

Media Contact:

Jules Abraham
CoreIR
917-885-7378
julesa@coreir.com

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