As filed with the Securities and Exchange Commission on July 28, 2023.
Registration No. 333-272946
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
__________________________________________
Longeveron Inc.
(Exact name of registrant as specified in its charter)
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| Delaware | | 2834 | | 47-2174146 |
| (State or other jurisdiction of
incorporation or organization) | | (Primary Standard Industrial
Classification Code Number) | | (I.R.S. Employer
Identification No.) |
1951 NW 7th Avenue, Suite 520
Miami, Florida 33136
Telephone: (305) 909-0840
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
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Wa’el Hashad
Chief Executive Officer
Longeveron Inc.
1951 NW 7th Avenue, Suite 520
Miami, Florida 33136
Telephone: (305) 909-0840
(Name, address, including zip code, and telephone number, including area code, of agent for service)
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With a copy to:
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Jennifer Minter, Esq.
Richard DiStefano, Esq.
Adam G. Wicks, Esq.
Buchanan Ingersoll & Rooney PC
Union Trust Building
501 Grant Street, Suite 200
Pittsburgh, PA 15219
Telephone: (412) 562-8800
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Spencer G. Feldman, Esq.
Olshan Frome Wolosky LLP
1325 Avenue of the Americas, 15th Floor
New York, NY 10019
Telephone: (212) 451-2300
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement is declared effective.
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | | ☐ | | Accelerated filer | | ☐ |
| Non-accelerated filer | | ☒ | | Smaller reporting company | | ☒ |
| | | | | Emerging growth company | | ☒ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
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The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
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EXPLANATORY NOTE
The prospectus accompanying this registration statement is being used to register and offer transferable Subscription Rights to purchase shares of Class A common stock and the shares of Class A common stock issuable upon the exercise of such Subscription Rights, to existing holders of common stock of the registrant (and holders of warrants exercisable for common stock), the placement by R.F. Lafferty, the Dealer Manager of any unsubscribed shares of Class A common stock registered hereunder, for an additional period of up to 45 days following expiration of the offering, as well as the potential resale by our principal stockholders and certain of our directors and executive officers of transferable Subscription Rights during the period for which the transferable Subscription Rights may be transferred in accordance with the terms of the Rights Offering.
We will not receive any proceeds from any sale of Subscription Rights undertaken by our principal stockholders and such directors and executive officers.
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
Preliminary Prospectus Subject to Completion, Dated July 28, 2023
Transferable Subscription Rights to purchase shares of Class A common stock
at $ per share and shares of Class A common stock
issuable upon exercise of Subscription Rights or subsequent placement
We are distributing to holders (such holders, including holders who may acquire rights by purchasing them from others, referred to in this registration statement as “holders” or “you”) of our Class A common stock, Class B common stock (together, our “common stock”) and holders of warrants exercisable for our Class A common stock (the “Participating Warrants”), at no charge, transferable subscription rights (the “Subscription Rights”) to purchase up to $30.0 million of our Class A common stock. We refer to the offering that is the subject of this prospectus as the “Rights Offering”. In the Rights Offering, you will receive, on August 18, 2023, the record date of the Rights Offering (the “Record Date”), five Subscription Rights for every share of common stock beneficially owned or share of Class A common stock underlying a Participating Warrant owned and settled by 5:00 p.m., Eastern Time, on August 16, 2023.
Each Subscription Right consists of a basic subscription right and an over-subscription privilege. Each Subscription Right will entitle the holder to purchase one share of Class A common stock, at a subscription price per share equal to $ . Once the Rights Offering has commenced, the Subscription Rights will be transferable until the expiration of the Rights Offering. We have applied to list such rights for trading on The Nasdaq Capital Market (“Nasdaq”) under the symbol “LGVNR.” We will not commence this offering until the Subscription Rights are approved for listing by Nasdaq.
In the event that holders exercise Subscription Rights for in excess of the aggregate maximum exercise amount of $30.0 million, the amount subscribed for by each holder will be proportionally reduced, based on the amount subscribed for (not including any over-subscription privilege subscribed for). If you exercise your basic subscription right in full, and any portion of the shares of Class A common stock available under the terms of the Rights Offering remain unsubscribed, you will be entitled to an over-subscription privilege to purchase a portion of the unsubscribed shares of Class A common stock at the subscription price, subject to proportional reduction if required among those who properly exercised their over-subscription privilege based on the amount of their over-subscription commitment. Once made, all exercises of rights are irrevocable.
You may only purchase the number of shares of Class A common stock purchasable upon exercise of the number of basic subscription rights distributed to you in the Rights Offering, subject to proration as described herein, plus the over-subscription privilege, if any. Accordingly, the number of shares of Class A common stock that you may purchase in the Rights Offering is limited by the number of shares of our common stock you held or would have held upon full exercise of Participating Warrants held on the Record Date and by the extent to which other stockholders exercise their basic subscription rights and over-subscription privileges, which we cannot determine prior to completion of the Rights Offering.
The Subscription Rights will expire if they are not exercised by 5:00 p.m., Eastern Time, on September 21, 2023, unless the Rights Offering is extended or earlier terminated by us. If we elect to extend the Rights Offering, we will issue a press release announcing the extension no later than 9:00 a.m., Eastern Time, on the next business day after the most recently announced Expiration Date of the Rights Offering. We may extend the Rights Offering for a period not to exceed 30 days in our sole discretion. All subscription payments will be deposited into an escrow account maintained by the Subscription Agent for the benefit of the holders exercising their subscriptions under the Rights Offering, and if the Rights Offering is not completed for any reason all funds will be promptly returned to such subscribers in the amounts advanced in connection with their respective exercises.
We have engaged R.F. Lafferty & Co., Inc. (“R.F. Lafferty”) as the dealer-manager for the Rights Offering. If the Rights Offering is not fully subscribed following expiration of the Rights Offering, R.F. Lafferty has additionally agreed to use its best efforts to place any of the unsubscribed shares of Class A common stock registered hereunder at the subscription price for an additional period of up to 45 days. The number of shares of Class A common stock that may be sold by us hereunder during this 45 day period will depend upon the number of shares of Class A common stock that remain available hereunder following the subscription and exercise of Subscription Rights.
You should carefully consider whether to exercise your Subscription Rights prior to the expiration of the Rights Offering. All exercises of Subscription Rights are irrevocable, even if the Rights Offering is extended by our Board of Directors for a period of 30 days.
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If we amend the Rights Offering to allow for an extension of the Rights Offering for a period of more than 30 days or make a fundamental change to the terms of the Rights Offering set forth in this prospectus, you may cancel your subscription and receive a prompt refund of any money you have advanced. Our Board of Directors may cancel the Rights Offering at any time prior to the expiration of the Rights Offering for any reason. In the event the Rights Offering is canceled, all subscription payments received by the Subscription Agent will be promptly returned, without interest.
This prospectus may be used to cover sales of Subscription Rights by our principal stockholders and certain of our directors and executive officers as provided for herein. None of our principal stockholders or such directors or executive officers have entered into any binding commitment or agreement to subscribe for or sell Subscription Rights received in this Rights Offering. We will not receive any proceeds from any sale of Subscription Rights by our principal stockholders and such directors and executive officers. See “Principal Stockholder, Director and Executive Officer Information” and “Plan of Distribution”.
In the event that the exercise by a stockholder of the basic subscription right or the over-subscription privilege could, as determined in our sole discretion, potentially result in a limitation on our ability to use net operating losses, tax credits and other tax attributes, under the Internal Revenue Code of 1986, as amended, and rules promulgated by the Internal Revenue Service, we may, but are under no obligation to, reduce the exercise by such stockholder of the basic subscription right or the over-subscription privilege to such number of shares of Class A common stock as in our sole discretion determine to be advisable in order to preserve our ability to use the tax attributes. If the amount of Subscription Rights that you exercise is so limited, any amount not used for purchases also will be refunded.
Our Board of Directors is making no recommendation regarding your exercise of the Subscription Rights. Shares of our Class A common stock are traded on The Nasdaq Capital Market under the symbol “LGVN”. On July 13, 2023, the closing sales price for our Class A common stock was $3.35 per share. The shares of Class A common stock issued in the Rights Offering will also be traded on Nasdaq under the same symbol.
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Per Share
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Total(1)
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Subscription price
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$
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$
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30,000,000
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Dealer-manager fees and expenses(2)
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$
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$
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Proceeds to us, before expenses
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$
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$
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We are an “emerging growth company” under the federal securities laws and, as such, we have elected to comply with certain reduced public company reporting requirements for this prospectus and future filings. See “Prospectus Summary — Implications of Being an Emerging Growth Company and a Smaller Reporting Company.”
The exercise of your Subscription Rights for shares of our Class A common stock involves a high degree of risk. See “Risk Factors” beginning on page 18 of this prospectus, as well as the risk factors and other information in any documents we incorporate by reference into this prospectus, to read about important factors you should consider before exercising your Subscription Rights.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
If you have any questions or need further information about the Rights Offering, please call Okapi Partners LLC, our information agent for the Rights Offering, at (844) 201-1170 or email at info@okapipartners.com.
The date of this prospectus is , 2023
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About This Prospectus
This prospectus is part of a registration statement that we have filed with the Securities and Exchange Commission. You should rely only on the information contained in this prospectus or any related prospectus supplement. We have not authorized anyone to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. The information contained in this prospectus is accurate only on the date of this prospectus. Our business, financial condition, results of operations and prospects may have changed since such date. Other than as required under the federal securities laws, we undertake no obligation to publicly update or revise such information, whether as a result of new information, future events or any other reason. This prospectus contains summaries of certain provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information. All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is a part, and you may obtain copies of those documents as described below. You should read this prospectus in its entirety before making an investment decision. You should also read and consider the information in the documents to which we have referred you in the section of the prospectus entitled “Where You Can Find More Information.”
This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any of our securities other than the securities covered hereby, nor does this prospectus constitute an offer to sell or the solicitation of an offer to buy any securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. Persons who come into possession of this prospectus in jurisdictions outside the United States are required to inform themselves about, and to observe, any restrictions as to the offering and the distribution of this prospectus applicable to those jurisdictions.
Industry and Market Data
This prospectus includes industry data and forecasts that we obtained from industry publications and surveys, public filings and internal company sources. Industry publications and surveys and forecasts generally state that the information contained therein has been obtained from sources believed to be reliable, but there can be no assurance as to the accuracy or completeness of the included information. Statements as to our market position and market estimates are based on independent industry publications, government publications, third party forecasts, management’s estimates and assumptions about our markets and our internal research. While we are not aware of any misstatements regarding the market, industry or similar data presented herein, such data involve risks and uncertainties and are subject to change based on various factors, including those discussed under the headings “Risk Factors” and “Cautionary Statement Concerning Forward-Looking Statements” in this prospectus.
This prospectus contains references to trademarks, trade names and service marks belonging to other entities. Solely for convenience, trademarks, trade names and service marks referred to in this prospectus may appear without the ® or TM symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks and trade names. We do not intend our use or display of other companies’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
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PROSPECTUS SUMMARY
This summary highlights, and is qualified in its entirety by, the more detailed information and financial statements included elsewhere in this prospectus. This summary does not contain all of the information that may be important to you in making your investment decision. You should read this entire prospectus carefully, especially the “Risk Factors” section beginning on page 18, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Risk Factors” and our audited financial statements, unaudited financial statements and related notes thereto, which are incorporated by reference into this prospectus. In this prospectus, except as otherwise indicated, “Longeveron,” the “Company,” “we,” “our,” and “us” refer to Longeveron Inc., a Delaware corporation.
Business Overview
We are a clinical stage biotechnology company developing regenerative medicines to address unmet medical needs. The Company’s lead investigational product is Lomecel-B™. Lomecel-B™ has multiple modes of action that include pro-vascular, pro-regenerative, and anti-inflammatory mechanisms, promoting tissue repair and healing with broad potential applications across a spectrum of disease areas. We are currently pursuing three pipeline indications: Hypoplastic Left Heart Syndrome (HLHS), Aging-related Frailty, and Alzheimer’s disease (AD). Our mission is to advance Lomecel-B™ and other cell-based product candidates into pivotal Phase 3 trials, with the goal of achieving regulatory approvals, subsequent commercialization, and broad use by the healthcare community.
With respect to HLHS, we are exploring the possibility that Lomecel-B™ when administered directly to the myocardium of affected infants can improve outcomes in this devastating rare pediatric disease. The standard of care in HLHS is a series of three reconstructive surgeries, typically at 10 days, 4 months, and approximately 4 years of life. Despite these life-saving surgical interventions, it is estimated that only 50 to 60 percent of affected individuals survive until adolescence. The pro-vascular, pro-regenerative and anti-inflammatory properties of Lomecel-B™ may improve the function of the right ventricle in these infants. A previous Longeveron Phase 1 open-label study (ELPIS I)1 indicated that such a benefit may exist when outcomes were compared to historical controls. Longeveron is currently conducting a controlled study to determine the actual benefit of Lomecel-B™ in these patients.
As of July 1, 2023, we have completed four U.S. clinical studies of Lomecel-B: Phase 1 AD, Phase 1 HLHS, Phase ½ Aging-related frailty (“HERA Trial”) and Phase 2b Aging-related frailty.1 We currently have three clinical trials actively enrolling patients: Phase 2a HLHS (“ELPIS II” trial), Phase 2a AD and Japan Phase 2 study in Japanese patients with Aging-related frailty. Additionally, we sponsor a registry in The Bahamas under the approval and authority of the National Stem Cell Ethics Committee. The Bahamas Registry Trial administers Lomecel-B to eligible participants at two private clinics in Nassau for a variety of indications. While Lomecel-B is considered an investigational product in The Bahamas, under the approval terms from the National Stem Cell Ethics Committee, we are permitted to charge a fee to participate in the Registry Trial.
Since our founding in 2014, we have focused the majority of our time and resources on the following: organizing and staffing our company, building, staffing and equipping a cGMP manufacturing facility with research and development labs, business planning, raising capital, establishing our intellectual property portfolio, generating clinical safety and efficacy data in our selected disease conditions and indications, and developing and expanding our manufacturing processes and capabilities.
We manufacture all of our own product candidates for clinical trials. In 2017, we opened a manufacturing facility comprised of eight clean rooms, two research and development laboratories, and warehouse and storage space. We have supply contracts with multiple third parties for fresh bone marrow, which we use to produce our product candidate for clinical testing and research and development. From time to time, we enter into contract development and manufacturing contracts or arrangements with third parties who seek to utilize our product development capabilities.
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Since the time that we became a publicly traded company in February 2021, we have sold 4,079,288 shares of Class A common stock through our IPO and a December 2021 private issuance of public equity (PIPE) offering, and warrants to purchase 1,169,288 shares of Class A common stock at an initial exercise price of $17.50 per share, for aggregate gross proceeds of $49.6 million prior to discounts, commissions and other offering expenses.
When appropriate funding opportunities arise, we routinely apply for grant funding to support our ongoing research and since 2016 we have received approximately $16.0 million in grant awards ($11.9 million of which has been directly awarded to us and is recognized as revenue when the performance obligations are met) from the National Institute on Aging (NIA) of the National Institutes of Health (NIH), the National Heart Lung and Blood Institute (NHLBI) of the NIH, the Alzheimer’s Association, and the Maryland Stem Cell Research Fund (MSCRF) of the Maryland Technology Development Corporation, or TEDCO.
Implication of Being an Emerging Growth Company and Smaller Reporting Company
We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended, or the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year following the fifth anniversary of the completion of our initial public offering, (2) the last day of the fiscal year in which we have total annual gross revenues of at least $1.235 billion, (3) the date on which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our Class A common stock held by non-affiliates exceeded $700.0 million as of the last business day of our most recently completed second fiscal quarter or (4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. An emerging growth company may take advantage of specified reduced reporting requirements and is relieved of certain other significant requirements that are otherwise generally applicable to public companies. As an emerging growth company, we may (i) reduce our executive compensation disclosure; (ii) present only two years of audited financial statements, plus unaudited condensed financial statements for any interim period, and correspondingly reduced. Management’s Discussion and Analysis of Financial Condition and Results of Operations disclosure; (iii) avail ourselves of the exemption from the requirement to obtain an attestation and report from our auditors on the assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002; and (iv) not require stockholder non-binding advisory votes on executive compensation or golden parachute arrangements.
We have availed ourselves in this prospectus of the reduced reporting requirements described above. As a result, the information that we provide stockholders may be less comprehensive than what you might receive from other public companies. When we are no longer deemed to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above. We have elected to avail ourselves of the exemption that allows emerging growth companies to extend the transition period for complying with new or revised financial accounting standards. This election is irrevocable.
We are also currently a “smaller reporting company” as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as our public float is less than $250.0 million measured on the last business day of our second fiscal quarter, or our annual revenue is less than $100.0 million during the most recently completed fiscal year and our public float is less than $700.0 million measured on the last business day of our second fiscal quarter. In the event that we are still considered a “smaller reporting company,” at such time as we cease being an “emerging growth company,” the disclosure we will be required to provide in our SEC filings will increase but will still be less than it would be if we were not considered either an “emerging growth company” or a “smaller reporting company.” Specifically, similar to “emerging growth companies,” “smaller reporting companies” are able to provide simplified executive compensation disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. Decreased disclosures in our SEC filings due to our status as an “emerging growth company” or “smaller reporting company” may make it harder for investors to analyze our results of operations and financial prospects.
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Summary of Clinical Development Strategy
Our core strategy is to become a world-leading regenerative medicine company through the development and commercialization of novel cell therapy products for unmet medical needs, with a focus on HLHS. Key elements of our current business strategy are as follows.
• Focus on the execution of ELPIS II, a Phase 2 randomized controlled trial set forth in greater detail below, to measure the efficacy of Lomecel-B in HLHS. This trial is ongoing and is being conducted in collaboration with the National Heart, Lung, and Blood Institute through grants from the NIH.
• Continue to develop our existing international programs. We have selected Japan as our first non-U.S. territory for a randomized, double-blinded, placebo-controlled clinical trial to evaluate Lomecel-B for Aging-related frailty with the aim of receiving approval under the Act on the Safety of Regenerative Medicine (ASRM) based on previous clinical data from non-Japanese as well as this Phase 2 study in Japan. We may explore conditional or full approval in Japan of Lomecel-B under the Pharmaceuticals and Medical Devices Act (PMDA) for the treatment of Aging-Related Frailty in the future. We may also explore other indications in Japan, and potentially pursue Aging-related frailty and other indications in additional international locations for further development and commercialization.
• Continue to pursue the therapeutic potential of Lomecel-B™ in Alzheimer’s disease (AD). We have previously conducted a small Phase 1b study in which it appeared that a single dose of Lomecel-B™ may preserve cognition in patients with mild AD as compared to those who received placebo treatment. We are now conducting a small multiple-dose Phase 2 randomized placebo-controlled study in mild AD patients to determine the safety of administering up to four doses of Lomecel-B™ in this aged population. In addition to establishing safety for further investigation, we will endeavor to measure any positive effects of Lomecel-B™ in mild AD patients through a combination of cognitive and imaging endpoints as well as to determine the extent of target engagement by Lomecel-B™ in this patient population.
• Expand our manufacturing capabilities to commercial-scale production.
• Collaborative arrangements and out-licensing opportunities. We will be opportunistic and consider entering into co-development, out-licensing, or other collaboration agreements for the purpose of eventually commercializing Lomecel-B™ and other products domestically and internationally if appropriate approvals are obtained.
• Product candidate development pipeline through internal research and development and in-licensing. Through our research and development program, and through strategic in-licensing agreements, or other business development arrangements, we intend to actively explore promising potential additions to our pipeline.
• Continue to expand our intellectual property portfolio. Our intellectual property is vitally important to our business strategy, and we take significant steps to develop this property and protect its value. Results from our ongoing research and development efforts are intended to add to our existing intellectual property portfolio.
Risks of Investing
Investing in our securities involves substantial risks. Potential investors are urged to read and consider the risk factors relating to an investment in the Class A common stock set forth under “Risk Factors” in this prospectus as well as other information we include in this prospectus.
Corporate Information
We were initially formed as a Delaware limited liability company in October 2014. As part of our initial public offering in February 2021, Longeveron LLC converted into a Delaware corporation pursuant to a statutory conversion, and changed its name to Longeveron Inc. Additional information about us is included in documents incorporated by reference in this prospectus. See “Where You Can Find More Information, Incorporation of Certain Information by Reference”. Our principal executive offices are located at 1951 NW 7th Avenue, Suite 520, Miami, Florida 33136 and our telephone number is (305) 909-0840. Our website address is www.longeveron.com. The information contained in, or accessible through, our website does not constitute a part of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
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SUMMARY OF THE OFFERING
The following summary describes the principal terms of the Rights Offering, but is not intended to be complete. See the information under the heading “The Rights Offering” in this prospectus for a more detailed description of the terms of the Rights Offering.
Securities Offered
We are distributing, at no charge, to holders of our Class A common stock, Class B common stock (together, our “common stock”), and holders of outstanding warrants exercisable for our Class A common stock (the “Participating Warrants”), transferable Subscription Rights to purchase up to $30.0 million of our Class A common stock. Holders of our common stock will receive five transferable Subscription Rights for each share of common stock owned, and holders of Participating Warrants will receive five Subscription Rights for each share of Class A common stock they would own upon full exercise of the Participating Warrants owned and settled, by 5:00 p.m., Eastern Time, on August 16, 2023.
Subscription Right
Each Subscription Right entitles the holder to purchase one share of our Class A common stock for $ per whole share of Class A common stock. Once the Rights Offering has commenced, the Subscription Rights will be transferable until the expiration of the Rights Offering. We have applied to list such rights for trading on Nasdaq under the symbol “LGVNR”. We will not commence this offering until the Subscription Rights are approved for listing by Nasdaq.
Basic Right and Over-Subscription Privilege
The basic subscription right will entitle the holder to purchase, subject to proration, one share of our Class A common stock at a subscription price of $ per share.
If you fully exercise your basic subscription right, and aggregate basic subscription rights are exercised for an amount less than $30.0 million in the aggregate, you may also exercise an over-subscription privilege to purchase additional shares of Class A common stock that remain unsubscribed at the expiration of the Rights Offering, subject to the availability and pro rata allocation of shares among stockholders exercising this over-subscription privilege.
Record Date
August 18, 2023.
Expiration Date of the Rights Offering
5:00 p.m., Eastern Time, on September 21, 2023 (referred to herein as the “Expiration Date”).
Subscription Price
$ per share, payable in cash. To be effective, any payment related to the exercise of a right must clear prior to the expiration of the Rights Offering.
Placement Period Following Expiration of Rights Offering
In the event that the Rights Offering is not fully subscribed as of the time of its expiration, R.F. Lafferty has agreed to use its best efforts to place any unsubscribed shares of the Class A common stock registered hereunder, at the subscription price, for an additional period of up to 45 days. The number of shares of Class A common stock that may be sold by us during this period will depend upon the number of shares that remain available following the subscription and the exercise of Subscription Rights by our common stockholders and holders of Participating Warrants. No assurance can be given that any unsubscribed shares of Class A common stock will be sold during this period.
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Use of Proceeds
We are conducting the Rights Offering, and the placement of any unsubscribed shares of Class A common stock thereafter, to provide funding for our ongoing clinical and regulatory development of Lomecel-B™ for the treatment of several disease states and indications, including HLHS, and the ongoing and prospective clinical studies of Lomecel-B™ with respect to Aging-related Frailty study being conducted in Japan, capital expenditures, working capital; and the balance, if any, for other general corporate purposes. We will not receive any proceeds from sales of Subscription Rights undertaken by our principal stockholders, directors and executive officers. See “Use of Proceeds” for a more detailed description of the intended use of proceeds from the Rights Offering.
Transferability of Rights
The Subscription Rights will be transferable during the course of the subscription period. The Class A common stock underlying the Subscription Rights may not be transferred separately. We have applied to list such rights for trading on Nasdaq under the symbol “LGVNR”. We will not commence this offering until the Subscription Rights are approved for listing by Nasdaq. The Subscription Rights are a new issue of securities with no prior trading market, and we cannot provide you any assurances as to the liquidity of the trading market for the Subscription Rights or the market value of the rights.
This prospectus may be used to cover sales of Subscription Rights by our principal stockholders and certain of our directors and executive officers, as provided for herein. None of our principal stockholders or such directors or executive officers have entered into any binding commitment or agreement to subscribe for or sell Subscription Rights received in this Rights Offering. We will not receive any proceeds from any sale of Subscription Rights by our principal stockholders or such directors and executive officers.
If you are a registered holder of our common stock or Participating Warrants and do not wish to exercise your Subscription Rights, you may instruct the Subscription Agent to sell all or a portion of your Subscription Rights by following the instructions in the Transferable Subscription Rights Certificate that will be provided to you (your “Rights Certificate”). If you wish to transfer all or a portion of your Subscription Rights, you and your transferee may submit a simultaneous instruction to the Subscription Agent to transfer your Subscription Rights and to exercise such transferred Subscription Rights on behalf of the transferee by following the instructions in your Rights Certificate. The Subscription Agent must receive such simultaneous transfer and exercise instruction by 5:00 p.m., Eastern Time, on the Expiration Date.
The Subscription Agent will only facilitate sales of Subscription Rights until 5:00 p.m., Eastern Time, five business days prior to September 21, 2023, the Expiration Date (as it may be extended). Therefore, if you wish to sell, subdivide or transfer (without simultaneous exercise) your Subscription Rights, the Subscription Agent must receive your instruction by 5:00 p.m., Eastern Time, on September 14, 2023. Neither we nor the Subscription Agent shall have any liability to a transferee or transferor of Subscription Rights if Rights Certificates are not received in time for exercise prior to the Expiration Date or subdivision or transfer (without simultaneous exercise) prior to September 14, 2023, five business days prior to September 21, 2023, the Expiration Date (as it may be extended).
Medallion Guarantee May Be Required
Unless your Rights Certificate provides that the shares of Class A common stock are to be delivered to you as record holder of those rights, or you are an eligible institution, your signature on a Rights Certificate must be guaranteed by an eligible institution, such as a member firm of a registered national securities exchange or a member of the Financial Industry Regulatory Authority, Inc., or a commercial bank or trust company having an office or correspondent in the United States, subject to standards and procedures adopted by the subscription agent.
Shares Outstanding Before the Rights Offering
6,311,725 shares of our Class A common stock, 14,855,539 shares of our Class B common stock, and warrants exercisable for 1,271,399 shares of Class A common stock at a weighted average exercise price of $17.26, as of July 13, 2023. Holders of Class A common stock generally have rights identical to holders of Class B common stock, except that holders of Class A common stock are entitled to one vote per share and holders of Class B common stock are entitled to five votes per share. The holders of Class B common stock may convert each share of Class B common stock into one share of Class A common stock at any time at the holder’s option. Class B common stock is not publicly tradable.
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Shares Outstanding After the Rights Offering
Assuming shares of our Class A common stock are issued in the Rights Offering through the exercise of Subscription Rights, and no Participating Warrants are exercised, we anticipate that shares of our Class A common stock, and 14,855,539 shares of our Class B common stock, will be outstanding following the completion of the Rights Offering.
U.S. Federal Income Tax Considerations
For U.S. federal income tax purposes, we do not believe you should recognize income or loss in connection with the receipt or exercise of Subscription Rights in the Rights Offering, but the receipt and exercise of the Subscription Rights is unclear in certain respects. You should consult your tax advisor as to the tax consequences of the Rights Offering in light of your particular circumstances. For a more detailed discussion, see “Material U.S. Federal Income Tax Consequences” on page 51. You are urged to consult your own tax advisor as to your particular tax consequences resulting from the receipt and the disposition or exercise of Subscription Rights and the receipt, ownership and disposition of Common Stock.
Extension, Cancellation and Amendment
We reserve the option to extend the offering period for exercising your Subscription Rights for a period not to exceed 30 days, although we do not presently intend to do so. If we elect to extend the expiration of the Rights Offering period, we will issue a press release announcing the extension no later than 9:00 a.m., Eastern Time, on the next business day after the most recently announced expiration of the Rights Offering. We will extend the duration of the Rights Offering as required by applicable law or regulation and may choose to extend the offering if we decide to give investors more time to exercise their Subscription Rights in the Rights Offering.
The Board may cancel the Rights Offering at any time before its expiration for any reason. If the Rights Offering is canceled, we will issue a press release notifying stockholders of the cancellation and all subscription payments received by the Subscription Agent will be promptly returned, without interest or penalty. However, if the Rights Offering is terminated, and you have purchased Subscription Rights in the open market, you will not receive any refund with respect to such purchase.
The Board also reserves the right to amend the terms of the Rights Offering for any reason, including, without limitation, in order to increase participation in the Rights Offering. Such amendments may include a change in the subscription price, although no such change is presently contemplated.
If we should make any fundamental change to the terms set forth in this prospectus, we will file a post-effective amendment to the registration statement in which this prospectus is included, offer potential purchasers who have subscribed for rights the opportunity to cancel such subscriptions and issue a refund of any money advanced by such stockholder or Participating Warrant holder and recirculate an updated prospectus after the post-effective amendment is declared effective with the SEC. In addition, upon such event, we may extend the Expiration Date of the Rights Offering period to allow holders of rights ample time to make new investment decisions and for us to recirculate updated documentation. Promptly following any such occurrence, we will issue a press release announcing any changes with respect to the Rights Offering and the new Expiration Date.
Procedures for Exercising Rights
To exercise your Subscription Rights, you must complete the Rights Certificate and deliver to the Subscription Agent, together with full payment for all the Subscription Rights you elect to exercise under the basic subscription right and over-subscription privilege, before the expiration of the offering period. See the section entitled “The Rights Offering — Methods for Exercising Subscription Rights” for detailed information on the procedure and requirements for exercising your Subscription Rights. You may deliver the documents and payments by mail or commercial carrier. If regular mail is used for this purpose, we recommend using registered mail, properly insured, with return receipt requested.
If you are a beneficial owner of shares that are registered in the name of a broker, dealer, bank or other nominee, you should instruct your record holder to exercise, sell or transfer your Subscription Right on your behalf and deliver all required documents and payment before the expiration of the offering period.
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Participation of Certain Warrant Holders
Holders of our warrants to purchase Class A common stock (the “Participating Warrants”) have the contractual right to participate in the Rights Offering, including holders of warrants issued to underwriters in February 2021 and to placement agents and investors in December 2021. Each such eligible warrant holder will receive five Subscription Rights for each share of Common Stock that such warrant holder’s warrant is exercisable for (or, as referred to elsewhere herein, for each share that such warrant holder is deemed to own). A total of 6,356,995 Subscription Rights will be issued to these warrant holders. Holders of certain warrants issued to investors in December 2021 (referred to as the “PIPE Warrants”) also have rights to a downward adjustment in the exercise price for 1,169,288 of these warrants if the deemed subscription price is below the current warrant exercise price. See “Description of Capital Stock — Outstanding Warrants — Class A Common Stock Warrants Issued to Participants in February and December 2021 Offerings.”
No Revocation
All exercises of Subscription Rights are irrevocable, even if you later learn information that you consider to be unfavorable to the exercise of your Subscription Right, or if the market price of Common Stock falls below the subscription price, or if the Rights Offering is extended by the Board of Directors. You should not exercise your Subscription Right unless you are certain that you wish to purchase shares at a subscription price of $ per share.
Risk Factors
Since our inception, we have incurred substantial losses. We will need the funding sought under this prospectus to remain a going concern, maintain operations, and to continue our current and planned clinical trial activity. Our business and our ability to execute our business strategy are subject to a number of risks of which you should be aware before you decide to buy our securities. In particular, you should carefully consider all of the risks which are discussed more fully in “Risk Factors” beginning on page 18 of this prospectus and those incorporated by reference from our filings with the Securities and Exchange Commission.
Dividend Policy
We have never declared or paid any dividends to the holders of our Class A common stock and we do not expect to pay cash dividends in the foreseeable future. We currently intend to retain any earnings for use in connection with the operation of our business and for general corporate purposes.
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Nasdaq Symbol for Class A common stock
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LGVN
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Transfer Agent and Subscription Agent
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Colonial Stock Transfer Company, Inc.
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Information Agent
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Okapi Partners LLC
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The number of shares of our Class A common stock outstanding prior to and immediately after this offering, as set forth above, excludes the following potentially dilutive securities as of July 13, 2023:
• 1,271,399 shares issuable upon the exercise of outstanding warrants at a weighted average exercise price as of July 13, 2023 of $17.26 per share. As noted elsewhere in this prospectus, holders of PIPE Warrants also have rights to a downward adjustment in the exercise price for 1,169,288 of these warrants if the deemed subscription price is below the current warrant exercise price.
• 102,754 shares issuable upon the vesting of RSUs under the Company’s 2021 Incentive Award Plan.
• 125,000 shares issuable upon the vesting of Performance Share Units (PSUs) under the Company’s 2021 Incentive Award Plan.
• 401,681 stock options outstanding with an average exercise price as of July 13, 2023 of $6.07 issuable under the Company’s 2021 Incentive Award Plan.
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Questions and Answers About the Rights Offering
The following are examples of what we anticipate will be common questions about the Rights Offering. The answers are based on selected information included elsewhere in this prospectus. The following questions and answers do not contain all of the information that may be important to you and may not address all of the questions that you may have about the Rights Offering. This prospectus and the documents incorporated by reference into this prospectus contain more detailed descriptions of the terms of the Rights Offering and provide additional information about us and our business, including potential risks related to the Rights Offering, the shares of Class A common stock offered hereby, and our business. We urge you to read this entire prospectus and the documents incorporated by reference into this prospectus.
Why are we conducting the Rights Offering?
We are conducting the offering to raise capital that we intend to use to continue our clinical trial pipeline and for general corporate purposes. See “Use of Proceeds” section for additional detail.
What is the Rights Offering?
We are distributing to holders of our common stock and Participating Warrants, at no charge, transferable Subscription Rights to purchase shares of Class A common stock. On the Record Date, August 18, 2023, you will receive five Subscription Rights for each whole share of common stock owned, and five Subscription Rights for every share of Class A common stock you would own upon full exercise of Participating Warrants you hold, as of 5:00 p.m., Eastern Time, on August 16, 2023. Each Subscription Right will entitle the holder to a basic subscription right and an over-subscription privilege.
What is the basic subscription right?
A basic subscription right will entitle you to purchase one share of Class A common stock, at the subscription price, for each share of common stock or Participating Warrant held by you as of 5:00 p.m., Eastern Time, on August 16, 2023. If you owned 100 shares of common stock as of that time, on the Record Date you will receive 500 Subscription Rights. You may exercise all or a portion of your basic subscription rights or you may choose not to exercise any basic subscription rights at all.
If you are a record holder or hold Participating Warrants, the number of Class A common shares you may purchase pursuant to your basic subscription right is indicated on the Rights Certificate. If you hold your shares in the name of a broker, dealer, bank, or other nominee who uses the services of the Depository Trust Company, or DTC, you will not receive a Rights Certificate. Instead, DTC will issue five Subscription Rights to your nominee record holder for each share of our common stock that you own as of the Record Date. If you are not contacted by your nominee, you should contact your nominee as soon as possible.
If sufficient shares of Class A common stock are available, we will seek to honor your basic subscription right request in full. In the event that holders exercise basic subscription rights for amounts in excess of $30.0 million, the amount subscribed for by each person will be proportionally reduced, based on the amount subscribed for by each person (not including any over-subscription privilege subscribed for).
See “The Rights Offering — Limitation on the Purchase of Shares of Class A Common Stock” for a description of certain limitations on purchase.
What is the over-subscription privilege?
If you exercise your basic subscription right in full, you may also choose to exercise your over-subscription privilege to purchase shares of Class A common stock in the event that the other holders do not purchase through the exercise of their basic subscription right, and which remain available under the Rights Offering. You should indicate on your Rights Certificate, or the form provided by your nominee if your shares are held in the name of a nominee, the aggregate amount you would like to apply to purchase shares of Class A common stock pursuant to your over-subscription privilege.
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If sufficient shares of Class A common stock are available, we will seek to honor your over-subscription request in full. To the extent the number of unsubscribed shares of Class A common stock is insufficient to satisfy all of the properly exercised over-subscription privilege requests, the available shares will be prorated among those who properly exercised their over-subscription privilege in proportion to their respective over-subscription commitment. See “The Rights Offering — Limitation on the Purchase of Shares of Class A common stock” for a description of certain limitations on purchase.
To properly exercise your over-subscription privilege, you must deliver to the Subscription Agent the subscription payment related to your over-subscription privilege before the Rights Offering expires. See “The Rights Offering — The Subscription Rights — Over-Subscription Privilege.” To the extent you properly exercise your over-subscription privilege for a number of shares of Class A common stock that exceeds the number of unsubscribed shares of Class A common stock available to you, any excess subscription payments will be promptly returned to you after the expiration of the Rights Offering, without interest or penalty.
To the extent the aggregate subscription price of the maximum number of unsubscribed shares of Class A common stock available to you pursuant to the over-subscription privilege is less than the amount you actually paid in connection with the exercise of the over-subscription privilege, you will be allocated only the number of unsubscribed shares available to you, and any excess subscription payments received by the Subscription Agent will be returned, without interest or penalty.
The Subscription Agent will determine the over-subscription allocation based on the formula described above and will notify rights holders of the number of shares allocated to each holder exercising the over-subscription privilege as promptly as may be practicable after the allocations are completed.
Will fractional shares be issued upon exercise of Subscription Rights?
No. We will not issue fractional shares of Class A common stock in the Rights Offering. Any excess subscription payments received by the Subscription Agent will be promptly returned after expiration of the Rights Offering, without interest or penalty.
What effect will the Rights Offering have on our outstanding Class A common stock?
6,311,725 shares of our Class A common stock, 14,855,539 shares of our Class B common stock, and Participating Warrants exercisable for 1,271,399 shares of Class A common stock at a weighted average exercise price of $17.26, were outstanding as of July 13, 2023. Based on the foregoing, and assuming no other transactions by us involving our Class A common stock prior to the expiration of the Rights Offering (including no exercise of Participating Warrants), and the Rights Offering is fully subscribed for the maximum number of shares of Class A common stock available, approximately shares of our Class A common stock will be issued and outstanding. The exact number of shares of Class A common stock that we will issue in the Rights Offering will depend on the subscription price and the number of shares of Class A common stock subscribed for. The Rights Offering will have no impact on the number of shares of Class B common stock outstanding.
How was the subscription price formula determined?
A committee consisting solely of independent members of our Board of Directors determined the subscription price taking into consideration, among other things, the following factors:
• the current and historical trading prices of our Class A common stock on Nasdaq;
• the price at which stockholders might be willing to participate in the Rights Offering;
• our need for additional capital and liquidity;
• the cost of capital from other sources;
• our business prospects and general conditions of the securities markets; and
• comparable precedent transactions, including the percentage of shares offered, the terms of the Subscription Rights being offered, the subscription price and the discount that the subscription price represented to the immediately prevailing closing prices for those offerings.
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In conjunction with the review of these factors, the independent committee reviewed our history and prospects, including our past and present earnings and cash requirements, our prospects for the future, the outlook for our industry and our current financial condition. The independent committee believes that the subscription price should be designed to provide an incentive to our current stockholders to participate in the Rights Offering and exercise their basic subscription right and their over-subscription privilege.
The subscription price does not necessarily bear any relationship to any established criteria for value. You should not consider the subscription price as an indication of actual value of Longeveron or our Class A common stock. We cannot assure you that the market price of our Class A common stock will not decline during or after the Rights Offering. You should obtain a current price quote for our Class A common stock before exercising your Subscription Rights and make your own assessment of our business and financial condition, our prospects for the future, and the terms of the Rights Offering. Once made, all exercises of Subscription Rights are irrevocable.
Am I required to exercise all of the basic subscription rights I receive in the Rights Offering?
No. You may exercise any number of your basic subscription rights, or you may choose not to exercise any basic right. If you do not exercise any basic subscription right, the number of shares of our Class A common stock you own will not change. However, if you choose not to exercise your basic subscription right in full, your proportionate ownership interest in our Company will decrease. If you do not exercise your basic subscription right in full, you will not be entitled to exercise your over-subscription privilege.
How soon must I act to exercise my Subscription Rights?
If you received a Rights Certificate and elect to exercise any or all of your Subscription Rights, the Subscription Agent must receive your completed and signed Rights Certificate and payment for both your basic subscription right and any over-subscription privilege you elect to exercise before the Rights Offering expires on September 21, 2023, at 5:00 p.m. Eastern Time. If you hold your shares in the name of a broker, dealer, custodian bank, or other nominee, your nominee may establish a deadline before the expiration of the Rights Offering by which you must provide it with your instructions to exercise your Subscription Rights, along with the required subscription payment.
If I do not exercise my Subscription Rights, may I sell my Subscription Rights?
Yes. The Subscription Rights will be transferable during the course of the Subscription Period. We have applied to list such rights for trading on Nasdaq under the symbol “LGVNR”. We will not commence this offering until the Subscription Rights are approved for listing by Nasdaq. The Subscription Rights are a new issue of securities with no prior trading market, and we cannot provide you any assurances as to the liquidity of the trading market for the Subscription Rights or the market value of the rights. Therefore, we cannot assure you that you will be able to sell any of your Subscription Rights or as to the value you may receive in a sale. The Class A common stock underlying the Subscription Rights may not be transferred separately.
If you are a registered holder of our common stock or Participating Warrants and do not wish to exercise your Subscription Rights, you may instruct the Subscription Agent to sell all or a portion of your Subscription Rights by following the instructions in your Rights Certificate. The Subscription Agent will only facilitate sales of Subscription Rights until 5:00 p.m., Eastern Time, five business days prior to September 21, 2023, the Expiration Date (as it may be extended). Therefore, if you wish to sell your subscription rights, the Subscription Agent must receive your instruction by 5:00 p.m., Eastern Time, on September 14, 2023.
This prospectus also covers the possible sale by the Company’s principal stockholders and certain of the Company’s directors and executive officers identified herein of up to 77,594,345 Subscription Rights. The individuals identified may sell some, all, or none of the Subscription Rights distributed to them.
If I do not exercise my Subscription Rights, may I transfer my Subscription Rights?
Yes. The Subscription Rights will be transferable during the course of the Subscription Period. As a result, you may transfer your Subscription Rights during the course of the Subscription Period if you do not want to purchase any shares of our Class A common stock.
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If you are a registered holder of our common stock or Participating Warrants and do not wish to exercise your Subscription Rights, you may instruct the Subscription Agent to transfer all or a portion of your Subscription Rights. If you wish to transfer all or a portion of your Subscription Rights, you and your transferee may submit a simultaneous instruction to the Subscription Agent to transfer your Subscription Rights and to exercise such transferred Subscription Rights on behalf of the transferee by following the instructions in your Rights Certificate. The Subscription Agent must receive such simultaneous transfer and exercise instruction by 5:00 p.m., Eastern Time, on the Expiration Date. The Subscription Agent will only facilitate subdivisions or transfers (without simultaneous exercise) of the physical Subscription Rights until 5:00 p.m., Eastern Time, five business days prior to September 21, 2023, the Expiration Date (as it may be extended). Therefore, if you wish to subdivide or transfer (without simultaneous exercise) your Subscription Rights, the Subscription Agent must receive your instruction by 5:00 p.m., Eastern Time, on September 14, 2023. Neither we nor the Subscription Agent shall have any liability to a transferee or transferor of Subscription Rights if Rights Certificates are not received in time for exercise prior to the Expiration Date or subdivision or transfer (without simultaneous exercise) five business days prior to the Expiration Date (as it may be extended).
This prospectus also covers the possible sale by the Company’s principal stockholders and certain of the Company’s directors and executive officers identified herein of up to 77,594,345 Subscription Rights. The individuals identified may sell some, all, or none of the Subscription Rights distributed to them.
Is there a minimum subscription required to complete the Rights Offering?
There is no individual minimum purchase requirement in the Rights Offering, and no minimum subscription required for the Rights Offering.
Are there any conditions to completing the Rights Offering?
There are no conditions to completion.
If the Rights Offering is not completed, will my subscription payment be refunded to me?
Yes. The Subscription Agent will hold all funds it receives in escrow until completion of the Rights Offering. If the Rights Offering is not completed, the Subscription Agent will return promptly, without interest, all subscription payments. We reserve the right to terminate the offering at any time if, due to market conditions or otherwise, the Board of Directors deems it advisable not to proceed with the Rights Offering.
Will our directors and executive officers participate in the Rights Offering or have the ability to sell their subscription rights?
To the extent they hold common stock as of the Record Date, our directors and executive officers will be entitled to participate in the Rights Offering on the same terms applicable to our stockholders and warrant holders receiving Subscription Rights. None of our directors or executive officers have entered into any binding commitment or agreement to exercise Subscription Rights received in the Rights Offering, but some have given indications they intend to participate in the Rights Offering at varying levels, though there can be no assurances any of our principal stockholders, directors and executive officers will participate in the Rights Offering. This prospectus may be used to cover the sales of Subscription Rights by our principal stockholders and certain of our directors and executive officers as provided for herein. None of our principal stockholders or such directors and executive officers have entered into any binding commitment or agreement to sell Subscription Rights received in this Rights Offering. Our principal stockholders are Joshua M. Hare, co-founder, Chief Science Officer and Chairman, and Donald M. Soffer, co-founder and former member of our Board of Directors. Dr. Hare has indicated an intention to participate in the Rights Offering but has made no commitment to do so. See “Principal Stockholder, Director and Executive Officer Information”.
Will holders of our equity awards to employees, officers and directors receive rights in the Rights Offering?
Holders of our equity awards to employees, officers and directors, including outstanding stock options, will not receive rights in the Rights Offering in connection with such equity awards, but will receive Subscription Rights in connection with any shares of our common stock held as of the Record Date.
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Will holders of our warrants be permitted to participate in the Rights Offering?
Holders of our warrants to purchase Class A common stock have the contractual right to participate in the Rights Offering, including holders of warrants issued to investors in February and December 2021. As of July 13, 2023, such eligible holders held warrants to purchase 1,271,399 shares of Class A common stock.
Has the Board of Directors made a recommendation to stockholders regarding the Rights Offering?
No. Our Board of Directors is not making a recommendation regarding your exercise of the Subscription Rights. Holders who exercise Subscription Rights will incur investment risk on new money invested. We cannot predict the price at which our shares of Class A common stock will trade after the Rights Offering. On July 13, 2023 the closing price of our Class A common stock was $3.35 per share. The market price for our Class A common stock may be above the subscription price or may be below the subscription price. If you exercise your Subscription Rights, you may not be able to sell the underlying shares of our Class A common stock in the future at the same price or a higher price. You should make your decision based on your assessment of our business and financial condition, our prospects for the future, the terms of the Rights Offering and the information contained in this prospectus. See “Risk Factors” for discussion of some of the risks involved in investing in our securities.
How do I exercise my Subscription Rights?
If you are a stockholder of record (meaning you hold your shares of our common stock or Participating Warrants in your name and not through a broker, dealer, bank, or other nominee) and you wish to participate in the Rights Offering, you must deliver a properly completed and signed Rights Certificate, together with payment of the subscription price for both your basic subscription right and any over-subscription privilege you elect to exercise, to the Subscription Agent before 5:00 p.m. Eastern Time, on September 21, 2023. If you are exercising your Subscription Rights through your broker, dealer, bank, or other nominee, you should promptly contact your broker, dealer, bank, or other nominee and submit your subscription documents and payment for the shares of Class A common stock subscribed for in accordance with the instructions and within the time period provided by your broker, dealer, bank or other nominee.
What if my shares are held in “street name”?
If you hold your shares of our common stock in the name of a broker, dealer, bank, or other nominee, then your broker, dealer, bank, or other nominee is the record holder of the shares you own. The record holder must exercise, transfer or sell the Subscription Rights on your behalf. Therefore, you will need to have your record holder act for you. If you wish to participate in Rights Offering and purchase shares of Class A common stock, please promptly contact the record holder of your shares. We will ask the record holder of your shares, who may be your broker, dealer, bank, or other nominee, to notify you of Rights Offering.
What form of payment is required?
You must timely pay the full subscription price for the full number of shares you wish to acquire pursuant to the exercise of Subscription Rights by delivering to the Subscription Agent a cashier’s check drawn on a U.S. bank, or wire transfer. If you send payment by personal uncertified check, payment will not be deemed to have been delivered to the Subscription Agent until the check has cleared. As such, any payments made by personal check should be delivered to the Subscription Agent no fewer than three business days prior to the Expiration Date. If you send a payment that is insufficient to purchase the number of shares you requested, or if the number of shares of Class A common stock you requested is not specified in the forms, the payment received will be applied to exercise your Subscription Rights to the fullest extent possible based on the amount of the payment received.
When will I receive my new shares of Class A common stock?
The Subscription Agent will arrange for the issuance of the Class A common stock promptly after the expiration of the Rights Offering, payment for the shares of Class A common stock subscribed for has cleared, and all prorating calculations and reductions contemplated by the terms of the Rights Offering have been effected. All shares that you purchase in the Rights Offering will be issued in book-entry, or uncertificated, form meaning that you will receive a
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direct registration (DRS) account statement from our Subscription Agent reflecting ownership of these securities if you are a holder of record of shares. If you hold your shares in the name of a broker, dealer, bank, or other nominee, DTC will credit your account with your nominee with the securities you purchase in the Rights Offering.
After I send in my payment and Rights Certificate to the Subscription Agent, may I cancel my exercise of Subscription Rights?
No. Exercises of Subscription Rights are irrevocable unless the Rights Offering is terminated, even if you later learn information that you consider to be unfavorable to the exercise of your Subscription Rights. You should not exercise your Subscription Rights unless you are certain that you wish to participate in the Rights Offering.
How much will the Company receive from the Rights Offering?
Assuming the Rights Offering is fully subscribed for $30.0 million, we estimate that the net proceeds from the Rights Offering will be approximately $ million, after deducting fees and expenses payable to the dealer-manager, and after deducting other expenses payable by us.
What are the limitations on the exercise of the basic subscription right and over-subscription privilege?
In the event that holders exercise basic subscription rights for amounts in excess of $30.0 million, the amount subscribed for by each person will be proportionally reduced, based on the amount subscribed for by each holder pursuant to their basic subscription right (i.e. not including any over-subscription privilege subscribed for).
In the event that the exercise by a holder of the basic subscription right or the over-subscription privilege could, as determined by Longeveron in its sole discretion, potentially result in a limitation on the Company’s ability to use net operating losses, tax credits and other tax attributes, which we refer to as the “Tax Attributes,” under the Internal Revenue Code of 1986, as amended, which we refer to as the “Code”, and rules promulgated by the Internal Revenue Service, Longeveron may, but is under no obligation to, reduce the exercise by such stockholder of the basic subscription right or the over- subscription privilege to such number of shares of Class A common stock as Longeveron in its sole discretion shall determine to be advisable in order to preserve its ability to use the Tax Attributes. If the amount of Subscription Rights that you exercise is so limited, any amount not used for purchases also will be refunded. See also “The Rights Offering — Limitation on the Purchase of Shares of Class A Common Stock”.
Are there risks in exercising my Subscription Rights?
Yes. The exercise of your Subscription Rights involves risks. Exercising your Subscription Rights involves the purchase of additional shares of our Class A common stock and you should consider this investment as carefully as you would consider any other investment. We cannot assure you that the market price of our Class A common stock will exceed the subscription price, nor can we assure you that the market price of our Class A common stock will not further decline after the Rights Offering. We also cannot assure you that you will be able to sell shares of our Class A common stock purchased in the Rights Offering at a price equal to or greater than the subscription price. In addition, you should carefully consider the risks described under the heading “Risk Factors” for discussion of some of the risks involved in investing in our securities.
Can the Board of Directors terminate or extend the Rights Offering?
Yes. Our Board of Directors may decide to terminate the Rights Offering prior to the expiration of the Rights Offering. We also have the right to extend the Rights Offering for a period not to exceed 30 days. We do not presently intend to extend the Rights Offering. We will notify stockholders if the Rights Offering is terminated or extended by issuing a press release. In the event that we decide to extend the Rights Offering and you have already exercised your Subscription Rights, your subscription payment will remain with the Subscription Agent until such time as the Rights Offering closes or is terminated.
Our Board of Directors also reserves the right to amend or modify the terms of the Rights Offering in its sole discretion. If we should make any fundamental changes to the terms of the Rights Offering set forth in this prospectus, we will file a post-effective amendment to the registration statement in which this prospectus is included, offer potential purchasers who have subscribed for rights the opportunity to cancel such subscriptions and issue a
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refund of any money advanced by such stockholder and recirculate an updated prospectus after the post-effective amendment is declared effective by the SEC. In addition, upon such event, we may extend the Expiration Date of the Rights Offering to allow holders of rights ample time to make new investment decisions and for us to recirculate updated documentation. Promptly following any such occurrence, we will issue a press release announcing any changes with respect to the Rights Offering and the new Expiration Date. The terms of the Rights Offering cannot be modified or amended after the Expiration Date of the Rights Offering. Although we do not presently intend to do so, we may choose to amend or modify the terms of the Rights Offering for any reason, including, without limitation, in order to increase participation in the Rights Offering. Such amendments or modifications may include a change in the subscription price, although no such change is presently contemplated. If we should make any fundamental changes to the terms set forth in this prospectus, we will file a post-effective amendment to the registration statement in which this prospectus is included, offer potential purchasers who have subscribed for rights the opportunity to cancel such subscriptions and issue a refund of any money advanced by such stockholder or eligible warrant holder and recirculate an updated prospectus after the post-effective amendment is declared effective with the SEC.
If the Rights Offering is not completed or is terminated, will my subscription payment be refunded to me?
Yes. The Subscription Agent will hold all funds it receives in a segregated bank account until completion of the Rights Offering. If we do not complete the offering, you will promptly receive a refund of the money you have advanced, without interest. If you own shares in “street name,” it may take longer for you to receive your subscription payment because the Subscription Agent will return payments through the record holder of your shares. However, if the Rights Offering is terminated, and you have purchased Subscription Rights in the open market, you will not receive any refund with respect to the purchase.
In addition, if we should make any fundamental changes to the terms set forth in this prospectus, we will file a post-effective amendment to the registration statement in which this prospectus is included, offer potential purchasers who have subscribed for rights the opportunity to cancel such subscriptions and issue a refund of any money advanced by such stockholder or eligible warrant holder and recirculate an updated prospectus after the post-effective amendment is declared effective with the SEC.
How do I exercise my Subscription Rights if I live outside the United States?
The Subscription Agent will hold Rights Certificates for stockholders having addresses outside the United States. To exercise Subscription Rights, foreign stockholders must notify the Subscription Agent and timely follow other procedures described in the section entitled “The Rights Offering — Foreign Stockholders”.
What regulatory limitations could be applicable to participants in the Rights Offering?
We will not be required to issue to you shares of our Class A common stock pursuant to the Rights Offering if, in our opinion, you are required to obtain prior clearance or approval from any state or federal regulatory authorities to own or control such shares and if, at the time the Rights Offering expires, you have not obtained such clearance or approval.
What fees or charges apply if I purchase shares of our Class A common stock?
We are not charging any fee or sales commission to issue Subscription Rights to you or to issue shares to you if you exercise your Subscription Rights. If you exercise your Subscription Rights through the record holder of your shares, you are responsible for paying any fees your record holder may charge you.
What are the U.S. federal income tax consequences of exercising Subscription Rights?
For U.S. federal income tax purposes, we do not believe you should recognize income or loss in connection with the receipt or exercise of Subscription Rights in the Rights Offering, but the receipt and exercise of the Subscription Rights is unclear in certain respects. You should consult your tax advisor as to the tax consequences of the Rights Offering in light of your particular circumstances. For a more detailed discussion, see “Material U.S. Federal Income Tax Consequences” on page 51.
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To whom should I send my forms and payment?
If your shares are held in the name of a broker, dealer or other nominee, then you should send your subscription documents, Rights Certificate, notices of guaranteed delivery and subscription payment to that record holder. If you are the record holder, then you should send your subscription documents, Rights Certificate, notices of guaranteed delivery and subscription payment by hand delivery, first class mail or courier service to:
Colonial Stock Transfer Company, Inc.
7840 S 700 E.,
Sandy, UT 84070
You are solely responsible for completing delivery to the Subscription Agent of your subscription documents, Rights Certificate and payment. We urge you to allow sufficient time for delivery of your subscription materials to the Subscription Agent.
Whom should I contact if I have other questions?
If you have any questions about the Rights Offering, including questions about subscription procedures and requests for additional copies of this prospectus or other documents, please contact the Information Agent, Okapi Partners LLC, 1212 Avenue of the Americas, 17th Floor, New York, New York 10036 at (844) 201-1170 or by email at info@okapipartners.com.
Who is the dealer-manager for this offering and placement agent for any unsubscribed shares of Class A common stock?
R.F. Lafferty will act as the dealer-manager for the Rights Offering. R.F. Lafferty is not underwriting any of the Subscription Rights being sold in this offering and does not make any recommendation with respect to such rights (including with respect to the exercise of such Subscription Rights). As contemplated by the dealer-manager agreement, R.F. Lafferty will not solicit any holders of the securities (including the rights) or engage in the offer and sale of such securities in any jurisdiction in which such securities are not qualified or registered for sale in accordance with, or exempt from, the state securities or blue sky laws of such jurisdiction unless and until (i) we have advised R.F. Lafferty that such securities have been qualified or registered in accordance with, or are exempt from application of, the state securities or blue sky laws of such jurisdiction, as applicable, and (ii) R.F. Lafferty possesses all required licenses and registrations to solicit or offer such securities in that jurisdiction.
If the Rights Offering is not fully subscribed following its expiration, R.F. Lafferty has additionally agreed to use its best efforts to place any of the unsubscribed shares of Class A common stock registered hereunder at the subscription price for an additional period of up to 45 days. The number of shares of Class A common stock that may be sold by us during this 45 day period will depend upon the number of shares of Class A common stock that remain available hereunder following the subscription and exercise of Subscription Rights by our stockholders. See “Plan of Distribution” on page 57 for a discussion of the fees and expenses to be paid to R.F. Lafferty in connection with the Rights Offering.
Important Dates
Set forth below are certain important dates for this offering, which generally are subject to extension:
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Record Date
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August 18, 2023
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Commencement date
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August 22, 2023
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Deadline for delivery of instructions for sale, subdivisions or transfer (without simultaneous exercise) of Rights Certificate
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September 14, 2023
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Expiration Date
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September 21, 2023
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Deadline for delivery of Rights Certificates, notices of guaranteed delivery and payment of subscription price
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September 21, 2023
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Deadline for delivery of subscription certificates pursuant to notices of guaranteed delivery
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September 25, 2023
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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that reflect our current expectations about our future results, performance, prospects and opportunities. This prospectus contains forward-looking statements that can involve substantial risks and uncertainties. All statements other than statements of historical facts contained herein, including statements regarding our future results of operations and financial position, business strategy, prospective products, product approvals, research and development costs, future revenue, timing and likelihood of success, plans and objectives of management for future operations, future results of anticipated products and prospects, plans and objectives of management are forward-looking statements. These statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” or “would” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements contained in this Prospectus include, but are not limited to, statements about:
• the ability of our clinical trials to demonstrate safety and efficacy of our product candidates, and other positive results;
• the timing and focus of our ongoing and future preclinical studies and clinical trials, and the reporting of data from those studies and trials;
• the size of the market opportunity for our product candidates, including our estimates of the number of patients who suffer from the diseases we are targeting;
• the success of competing therapies that are or may become available;
• the beneficial characteristics, safety, efficacy and therapeutic effects of our product candidates;
• our ability to obtain and maintain regulatory approval of our product candidates in the U.S., Japan and other jurisdictions;
• our plans relating to the further development of our product candidates, including additional disease states or indications we may pursue;
• our plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available and our ability to avoid infringing the intellectual property rights of others;
• the need to hire additional personnel and our ability to attract and retain such personnel;
• our estimates regarding expenses, future revenue, capital requirements and needs for additional financing;
• our need to raise additional capital, the difficulties we may face in obtaining access to capital, and the dilutive impact it may have on our investors;
• our financial performance;
• the period over which we estimate our existing cash and cash equivalents will be sufficient to fund our future operating expenses and capital expenditure requirements;
• our ability to consummate the Rights Offering;
• whether we reject any subscriptions in the Rights Offering in order to protect the Company from the loss of its net operating losses;
• the amount of proceeds we receive from the Rights Offering and how our management uses those proceeds; and
• the impact of the Rights Offering on the trading price of our Class A common stock.
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We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements speak only as of the date of this prospectus and are subject to a number of risks, uncertainties and assumptions described in the section titled “Risk Factors” and elsewhere in this prospectus. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this prospectus, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.
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RISK FACTORS
Investing in our securities involves a high degree of risk. You should consider and read carefully all of the risks and uncertainties described below, as well as other information contained in this prospectus and which is incorporated by reference in our most recent Annual Report on Form 10-K and Quarterly Report on Form 10-Q, before making an investment decision with respect to our securities. The occurrence of any of the following risks or those incorporated by reference, or additional risks and uncertainties not presently known to us or that we currently believe to be immaterial could materially and adversely affect our business, financial condition, results of operations or cash flows. In any such case, the trading price of our Class A common stock could decline, and you may lose all or part of your investment. This prospectus also contains forward-looking statements and estimates that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of specific factors, including the risks and uncertainties described below and those incorporated by reference.
Risks Related to the Rights Offering
The subscription price determined for this Rights Offering is not necessarily an indication of the value of our Class A common stock.
The subscription price is not necessarily related to our book value, results of operations, cash flows, financial condition or the future market value of our Class A common stock. We cannot assure you that you will be able to sell shares purchased in the Rights Offering at a price equal to or greater than the subscription price. We do not intend to change the subscription price in response to changes in the market price of our Class A common stock prior to the closing of the Rights Offering.
The Rights Offering may cause the price of our Class A common stock to decline.
Depending upon the market price of our Class A common stock at the time of our announcement of the Rights Offering and its terms, including the subscription price, together with the number of shares of Class A common stock we could issue if the Rights Offering is completed, may result in a decrease in the market price of our Class A common stock. This decrease may continue after the completion of the Rights Offering. If that occurs, your purchase of shares of our Class A common stock in the Rights Offering may be at a price greater than the prevailing market price. Further, if a substantial number of Subscription Rights are exercised and the holders of the shares of our Class A common stock received upon exercise of those rights choose to sell some or all of those shares, the resulting sales could depress the market price of our Class A common stock. Accordingly, you may be able to purchase our shares of common stock on the open market at a price below the subscription price.
Because you may not revoke or change your exercise of the Subscription Rights, you could be committed to buying shares above the prevailing market price at the time the Rights Offering is completed.
Once you exercise your Subscription Rights, you may not revoke or change the exercise. The market price of our Class A common stock may decline before the Subscription Rights expire. If you exercise your Subscription Rights, and, afterwards, the market price of our Class A common stock decreases below the subscription price, you will have committed to buying shares of our Class A common stock at a price above the prevailing market price and could have an immediate unrealized loss.
Our Class A common stock is traded on The Nasdaq Capital Market under the symbol “LGVN,” and the closing sale price of our Class A common stock on July 13, 2023 was $3.35 per share. There can be no assurances that the market price of our Class A common stock will equal or exceed the subscription price at the time of exercise or at the expiration of the Subscription Rights offering period.
You may not be able to resell any shares of our Class A common stock that you purchase pursuant to the exercise of Subscription Rights immediately upon expiration of the Subscription Rights offering period or be able to sell your shares at a price equal to or greater than the subscription price.
If you exercise Subscription Rights, you may not be able to resell the Class A common stock purchased by exercising your Subscription Rights until you, or your broker, custodian bank or other nominee, if applicable, have received those shares. Moreover, you will have no rights as a stockholder of the shares you purchased in the Rights Offering
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until we issue the shares to you. Although we will endeavor to promptly issue the shares after completion of the Rights Offering, including the guaranteed delivery period and after all necessary calculations have been completed, there may be a delay between the Expiration Date of the Rights Offering and the time that the shares are issued. In addition, we cannot assure you that, following the exercise of your Subscription Rights, you will be able to sell your Class A common stock at a price equal to or greater than the subscription price.
If you do not exercise your Subscription Rights, you will likely suffer dilution.
If you do not exercise your basic Subscription Rights in full and the shares not purchased by you are purchased by other stockholders in the Rights Offering, your proportionate voting and ownership interests will be reduced and the percentage that your original shares represent of our equity after exercise of the Subscription Rights will be diluted. The magnitude of the reduction of your percentage ownership will depend upon the extent to which you and others subscribe in the Rights Offering. We may decide to issue securities in a future offering, the nature of which will depend on market conditions and other factors beyond our control, and warrant holders may choose to exercise their common stock warrants. We cannot predict or estimate the amount, timing or nature of these future events.
As of July 13, 2023, there were 6,311,725 shares of our Class A common stock and 14,855,539 shares of our Class B common stock outstanding. We anticipate issuing up to a total of shares of Class A common stock in connection with the Rights Offering.
Based on the number of shares of Class A common stock outstanding as of July , 2023 and assuming that no options or warrants are exercised and there are no other changes in the number of outstanding shares prior to the expiration of the Rights Offering, if we issue all shares of Class A common stock available in the Rights Offering (to stockholders participating in the Rights Offering), we would have shares of Class A common stock outstanding following the completion of the Rights Offering.
The Rights Offering and future sales, or the possibility of future sales of a substantial number of shares of our Class A common stock or future sales at a lower price could adversely affect the price of the shares and dilute stockholders.
Future sales of a substantial number of shares of our Class A common stock, or the perception that such sales will occur, could cause a decline in the market price of our Class A common stock. This is particularly true if we sell our stock at a discount. As a result of the Rights Offering, if the deemed subscription price of each share is below the current exercise price of the warrants issued to purchasers as part of our December 2021 offering, the exercise price for warrants to purchase up to 1,169,288 shares of Common Stock will adjust down, to the higher of (i) the subscription price of each share and (ii) $5.25. Future issuances of Common Stock or securities convertible or exercisable into our Common Stock could cause a further downward adjustment of the exercise price of these warrants, though in no event below the stated floor exercise price of $5.25. See “Description of Common Stock — Outstanding Warrants — Common Stock Warrants Issued to Participants in December 2021 Offering.”
In addition, in connection with this offering, our directors and executive officers are expected to enter into lock-up agreements. If, after the end of such lock-up agreements, these stockholders sell substantial amounts of common stock in the public market, or the market perceives that such sales may occur, the market price of our common stock and our ability to raise capital through an issue of equity securities in the future could be adversely affected.
Also, in the future, we may issue additional shares of our Class A common stock or other equity or debt securities convertible into Class A common stock in connection with a financing, acquisition, litigation settlement, employee arrangements, or otherwise. Any such issuance could result in substantial dilution to our existing stockholders and could cause our common share price to decline.
We may cancel the Rights Offering at any time prior to the expiration of the Rights Offering period, and neither we nor the Subscription Agent will have any obligation to you except to return your subscription payment.
We may at our sole discretion cancel the Rights Offering at any time prior to the expiration of the Rights Offering period. If we elect to cancel the Rights Offering, neither we nor the Subscription Agent will have any obligation with respect to the Subscription Rights except to promptly return to you, without interest or penalty, any subscription payments.
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Further, if you purchase Subscription Rights in the open market and the Rights Offering is not consummated or you do not timely exercise the Subscription Rights purchased, the purchase price will not be refunded to you. Accordingly, you may suffer a complete loss of your investment if you purchase Subscription Rights.
The dealer-manager is not underwriting this offering, but may act as a placement agent of the shares of Class A common stock.
If the Rights Offering is not fully subscribed following its expiration, R.F. Lafferty, as the dealer-manager for the Rights Offering, has agreed to use its best efforts to place any of the unsubscribed shares of Class A common stock registered hereunder at the subscription price for an additional period of up to 45 days. The number of shares of Class A common stock that may be sold by us during this 45 day period will depend upon the number of shares of Class A common stock that remain available hereunder following the subscription and exercise of Subscription Rights by our common stockholders and certain warrant holders. No assurance can be given that any unsubscribed shares of Class A common stock will be available for sale, or will be sold during this period. R.F. Lafferty is not an underwriter of the Subscription Rights, the shares of Class A common stock issuable upon exercise of the basic right or over-subscription privilege, or any remaining unsubscribed shares of Class A common stock to be placed following expiration of the Rights Offering. Under our agreement with the dealer-manager, R.F. Lafferty is solely providing marketing assistance and advice to us in connection with this offering. Its services to us in this connection cannot be construed as any assurance that this offering will be successful.
If you do not act promptly and follow the subscription instructions, your exercise of Subscription Rights will be rejected.
Stockholders that desire to purchase shares in the Rights Offering must act promptly to ensure that all required forms and payments are actually received by the Subscription Agent prior to the Expiration Date of the Rights Offering. If you are a beneficial owner of shares, you must act promptly to ensure that your broker, dealer, custodian bank or other nominee acts for you and that all required forms and payments are actually received by the Subscription Agent prior to the expiration of the Rights Offering period. We are not responsible if your broker, dealer, custodian bank or nominee fails to ensure that all required forms and payments are actually received by the Subscription Agent prior to the expiration of the Rights Offering period. If you fail to complete and sign the required subscription forms, send an incorrect payment amount or otherwise fail to follow the subscription procedures that apply to your exercise in the Rights Offering prior to the expiration of the Rights Offering period, the Subscription Agent may, depending on the circumstances, reject your subscription or accept it only to the extent of the payment received. Neither we nor the Subscription Agent undertakes to contact you concerning, or attempt to correct, an incomplete or incorrect subscription form. We have the sole discretion to determine whether the exercise of your Subscription Rights properly and timely follows the subscription procedures.
If you make payment of the subscription price by uncertified personal check, your check may not clear in sufficient time to enable you to purchase shares in the Rights Offering.
Any uncertified personal check used to pay the subscription price in the Rights Offering must clear prior to the Expiration Date of the Rights Offering, and the clearing process may require five or more business days. As a result, if you choose to use an uncertified personal check to pay the subscription price, it may not clear prior to the Expiration Date, in which event you would not be eligible to exercise your Subscription Rights. You may eliminate this risk by paying the subscription price by certified or cashier’s check or bank draft drawn on a U.S. bank.
You may not receive all of the shares for which you subscribe or oversubscribe.
In the event that holders exercise Subscription Rights for in excess of the aggregate maximum exercise amount of $30.0 million, the amount subscribed for by each holder will be proportionally reduced, based on the amount subscribed for (not including any over-subscription privilege subscribed for). In addition, holders who fully exercise their basic subscription rights will be entitled to subscribe for an additional number of shares of Class A common stock by exercising an over-subscription privilege. To the extent available, over-subscription privileges will be allocated pro rata among rights holders who oversubscribe, based on the number of over-subscription shares to which they have subscribed, although the allocation of over-subscription privileges among investors who may become 5% holders, who are 5% holders that have not properly filed any required forms with the SEC, or who would own in excess of 50% of the Company’s shares may be reduced. We cannot guarantee that you will receive any or the entire
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number of shares for which you oversubscribed. If the prorated number of shares allocated to you in connection with your over-subscription privilege is less than your request, then the excess funds held by the Subscription Agent on your behalf will be promptly returned to you, without interest, after the Rights Offering has expired and all prorating calculations and reductions contemplated by the terms of the Rights Offering have been effected, and we will have no further obligation to you.
We may amend or modify the terms of the Rights Offering at any time before the expiration of the Rights Offering in our sole discretion.
The Board reserves the right to amend the terms of the Rights Offering in its sole discretion. Although we do not presently intend to do so, we may choose to amend the terms of the Rights Offering for any reason, including, without limitation, in order to increase participation in the Rights Offering. Any such amendment that is not fundamental enough for us to have to return your subscription payment nonetheless may affect your rights, including any anticipated return on your investment, adversely.
The Rights Offering could impair or limit our net operating loss carryforwards.
As of March 31, 2023, we had net operating losses of approximately $27.0 million for U.S. federal income tax purposes. Under the Internal Revenue Code of 1986, as amended, referred to as the Code, an “ownership change” with respect to a corporation could limit the amount of pre-ownership change net operating losses and certain other tax assets that the corporation may utilize after the ownership change to offset future taxable income, possibly reducing the amount of cash available to the corporation to satisfy its obligations. An ownership change generally should occur if the aggregate stock ownership of beneficial owners of at least 5% of our stock increases by more than 50 percentage points over the preceding three-year period. Because not all stockholders may exercise their basic subscription rights in full, the purchase of shares of our Class A Common Stock could result in a shift in this beneficial ownership that could trigger an ownership change with respect to our stock. See “The Rights Offering — Limitation on the Purchase of Shares of Class A Common Stock” for a description of certain limitations on purchase.
You may be required to allocate a portion of your tax basis in our Class A Common Stock to the Subscription Rights received in the offering.
You will be required to allocate a portion of your tax basis in your Class A common stock to the Subscription Rights we distribute to you in the offering (which will carry over and become part of the tax basis in any of our Class A common stock acquired upon exercise of the rights) if you determine the value of the stock rights equals or exceeds 15% of the fair market value of our Common Stock on the date we distribute the rights to you, or if you so elect to allocate a portion of your tax basis to the rights. We are not required to, nor do we intend to, provide you with an appraisal setting forth the estimated fair market value of the rights. Please read “Material U.S. Federal Income Tax Considerations” for further information on the treatment of the Rights Offering.
The receipt of Subscription Rights may be treated as a taxable dividend to you.
The U.S. federal income tax consequences of the Rights Offering to stockholders will depend on whether the Rights Offering is part of a “disproportionate distribution.” We intend to take the reporting position that the Subscription Rights issued to common stockholders pursuant to the Rights Offering (a) are not part of a “disproportionate distribution” and (b) will not be a taxable distribution with respect to your existing securities. The disproportionate distribution rules are complicated, however, and their application is uncertain, and thus counsel is not rendering a definitive opinion regarding the application of such rules. Accordingly, it is possible that the IRS could successfully challenge our reporting position and assert that the Rights Offering is a taxable distribution. For a discussion of the tax consequences if this distribution is non-taxable and the tax consequences if it is taxable, see the discussion in “Material U.S. Federal Income Tax Consequences.”
No prior market exists for the Subscription Rights, and a liquid and reliable market for the Subscription Rights may not develop.
The Subscription Rights are a new issue of securities with no established trading market. The Subscription Rights will be transferable during the course of the subscription period. We have applied to list such rights for trading on Nasdaq under the symbol “LGVNR,” and we anticipate that the rights will be listed upon commencement of
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the Rights Offering. However, the Subscription Rights are a new issue of securities with no prior trading market, and we cannot provide you any assurances as to the liquidity of the trading market for the subscription rights or the market value of the subscription rights. You may be unable to sell your Subscription Rights or unable to sell your Subscription Rights at a price that is satisfactory to you. We are not responsible if you elect to sell your Subscription Rights and no public or private market exists to facilitate the purchase of Subscription Rights. In such event, the Subscription Rights will expire and will no longer be exercisable or transferable. If you wish to sell your Subscription Rights or the Subscription Agent or your broker tries to sell Subscription Rights on your behalf in accordance with the procedures discussed in this prospectus or any related prospectus supplement but such Subscription Rights cannot be sold, or if you provide the Subscription Agent with instructions to exercise the Subscription Rights and your instructions are not timely received by the Subscription Agent or if you do not provide any instructions to exercise your Subscription Rights, then the Subscription Rights will expire, will be void and will have no value. The Subscription Agent will only facilitate sales, subdivisions or transfers (without simultaneous exercise) of the physical Subscription Rights until 5:00 p.m., Eastern Time, on September 14, 2023, five business days prior to September 21, 2023, the Expiration Date (as it may be extended).
You will only be able to transfer your Subscription Rights for a short period of time.
The Subscription Rights will be transferable until the close of trading on Nasdaq on September 21, 2023, the Expiration Date (as it may be extended). The Class A common stock underlying the Subscription Rights may not be transferred separately. For registered holders of our common stock and Participating Warrants, if you and your transferee elect not to submit simultaneous transfer and exercise instructions, it can take up to five business days for: (i) the transfer instructions to be received and processed by the Subscription Agent; (ii) a new Rights Certificate to be issued and transmitted to the transferee or transferees with respect to transferred Subscription Rights and to the transferor with respect to retained Subscription Rights, if any; and (iii) the Subscription Rights evidenced by such new Rights Certificate to be exercised or sold by the recipients thereof. If you fail to transfer your Subscription Rights in enough time to allow for the transfer process to be completed, you will not be able to transfer your Subscription Rights. Neither we nor the Subscription Agent shall have any liability to a transferee or transferor of Subscription Rights if Rights Certificates are not received in time for exercise prior to the Expiration Date or sale prior to September 14, 2023, five business days prior to September 21, 2023, the Expiration Date (as it may be extended). If your shares or Participating Warrants are held in the name of a custodian bank, broker, dealer, or other nominee, you may transfer or sell your Subscription Rights by contacting the custodian bank, broker, dealer, or other nominee through which you hold your shares or warrants and your custodian bank, broker, dealer, or other nominee may have its own deadlines related to the transfer of your Subscription Rights. For more information, see the section entitled “The Rights Offering- Transfers and Sales of Subscription Rights.”
The absence of any formal commitment from any of our stockholders to participate in this Rights Offering may result in our receipt of minimal or no gross proceeds from the Rights Offering.
We do not have any binding commitments from any of our rights holders to participate in this Rights Offering and we cannot assure you that any of our rights holders will exercise any part of their basic subscription rights or their over-subscription privilege. There is no guarantee that there will be any proceeds from the Rights Offering. In addition, we have not entered into any backstop agreement or similar arrangement with respect to the purchase of any shares of our Class A common stock being offered in this Rights Offering. Thus, there is no assurance that any shares will be purchased pursuant to this Rights Offering. See “Plan of Distribution.”
We will have considerable discretion over the use of the proceeds of the Rights Offering and may not realize an adequate return.
We will have considerable discretion in the application of the net proceeds of this offering. We have not determined the amount of net proceeds that we will apply to various corporate purposes. We may use the proceeds for purposes that do not yield a significant return, if any, for our stockholders.
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Risks Related to Our Class A Common Stock
The price of our stock has been, and may continue to be, volatile, which could result in substantial losses for investors.
The trading price of our Class A common stock has been, and may continue to be highly volatile and subject to wide fluctuations in response to various factors, some of which we cannot control. The stock market in general, and pharmaceutical and biotechnology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies.
Broad market and industry factors may negatively affect the market price of our Class A common stock, regardless of our actual operating performance. In addition to the factors discussed in this “Risk Factors” section and elsewhere in this prospectus, these factors include:
• the timing and results, or perception of the results, of preclinical studies and clinical trials of our product candidates or those of our competitors;
• the success of competitive products or announcements by potential competitors of their product development efforts;
• regulatory actions with respect to our or our competitors’ product candidates or approved products;
• actual or anticipated changes in our growth rate relative to our competitors;
• regulatory or legal developments in the U.S. and other countries;
• developments or disputes concerning patent applications, issued patents or other proprietary rights;
• the recruitment or departure of key personnel;
• announcements by us or our competitors of significant acquisitions, strategic collaborations, joint ventures, or capital commitments;
• actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts;
• fluctuations in the valuation of companies perceived by investors to be comparable to us;
• market conditions in the pharmaceutical and biotechnology sector;
• changes in the structure of healthcare payment systems;
• share price and volume fluctuations attributable to inconsistent trading volume levels of our shares;
• announcement or expectation of additional financing efforts;
• sales of our Class A common stock by us, our insiders or our other stockholders;
• expiration of market stand-off or lock-up agreements; and
• general economic, industry and market conditions.
The realization of any of the above risks or any of a broad range of other risks, including those described in this “Risk Factors” section, could have a dramatic and adverse impact on the market price of our Class A common stock.
There may not be sufficient liquidity in the market for our securities in order for investors to sell their shares.
We are a small company that is relatively unknown to stock analysts, stockbrokers, institutional investors and others in the investment community that generate or influence sales volume, and even if we came to the attention of such persons, they tend to be risk-averse and may be reluctant to follow an unproven company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. There may be periods of several days or more when trading activity in our shares is minimal as compared to a mature issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse
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effect on share price. It is possible that a broader or more active public trading market for our common stock will not develop or be sustained, or that trading levels will not continue. These factors may materially adversely affect the market price of our Class A common stock, regardless of our performance.
The dual class structure of our common stock may adversely affect the trading market for our Class A Common Stock.
We cannot predict whether our dual class structure will result in a lower or more volatile market price of our Class A common stock or in adverse publicity or other adverse consequences. For example, certain index providers have announced restrictions on including companies with dual class or multi-class share structures in certain of their indexes. Our dual class capital structure could make us ineligible for inclusion in certain indices and mutual funds, exchange-traded funds and other investment vehicles that attempt to passively track these indices will not be investing in our stock. These policies are still fairly new and it is as of yet unclear what effect, if any, they will have on the valuations of publicly traded companies excluded from the indices, but it is possible that they may depress these valuations compared to those of other similar companies that are included. Furthermore, we cannot assure you that other stock indices will not take a similar approach to S&P Dow Jones or FTSE Russell in the future. Exclusion from indices could make our Class A common stock less attractive to investors and, as a result, the market price of our Class A common stock could be adversely affected.
Holders of our Class B common stock control the direction of our business and their ownership of our common stock can prevent other stockholders from influencing significant decisions.
As of July 13, 2023, three holders of our Class B common stock, Joshua M. Hare, co-founder, Chief Science Officer and Chairman of the Board of Directors, and Donald M. Soffer, co-founder and former member of our Board of Directors, own approximately 88% of the combined voting power of our Class A and Class B common stock. For so long as holders of Class B common stock continue to hold their shares, they will be able to significantly influence or effectively control the composition of our Board of Directors and the approval of actions requiring stockholder approval through their voting power. Accordingly, for such period of time, these holders will have significant influence with respect to our management, business plans and policies. In particular, for so long as the Class B common stock remains outstanding, the holders may be able to cause or prevent a change of control of our Company or a change in the composition of our Board of Directors, and could preclude any unsolicited acquisition of our Company. The concentration of ownership could deprive stockholders of an opportunity to receive a premium for shares of Class A common stock as part of a sale of our Company and ultimately might affect the market price of our Class A common stock.
If securities or industry analysts do not publish research or reports, or if they publish adverse or misleading research or reports, regarding us, our business or our market, our stock price and trading volume could decline.
The trading market for our Class A common stock is influenced by the research and reports that securities or industry analysts publish about us, our business or our market. We do not currently have and may never obtain research coverage by securities or industry analysts. If no or few securities or industry analysts commence coverage of us, the stock price would be negatively impacted. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us issue adverse or misleading research or reports regarding us, our business model, our intellectual property, our stock performance or our market, or if our operating results fail to meet the expectations of analysts, our stock price would likely decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline.
Certain of our warrants contain anti-dilution provisions that, if triggered, could cause dilution to our existing stockholders.
The warrants to purchase up to 1,169,288 shares of our Class A common stock issued to the purchasers in our December 2021 private placement are subject to an exercise price adjustment in connection with subsequent offerings, and as such the exercise price of such warrants will adjust down, to the higher of (i) the subscription price of each share and (ii) $5.25. In addition to the potential dilutive effect of these provisions, there is the potential that a large number of the shares may be sold in the public market at any given time, which could place additional downward pressure on the trading price of our Class A common stock.
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Provisions in our certificate of incorporation and bylaws and Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the market price of our Class A common stock.
Our certificate of incorporation and bylaws contain provisions that could depress the market price of our Class A common stock by acting to discourage, delay or prevent a change in control of our company or changes in our management that the stockholders of our company may deem advantageous. These provisions, among other things:
• establish a classified board of directors so that not all members of our board are elected at one time;
• permit only the board of directors to establish the number of directors and fill vacancies on the board;
• provide that directors may only be removed “for cause” and only with the approval of two-thirds of our stockholders;
• provide for a dual class common stock structure, which provides certain affiliates of ours, including our co-founder and members of our Board, individually or together, with the ability to significantly influence the outcome of matters requiring stockholder approval, even if they own significantly less than a majority of the shares of our outstanding Class A common stock and Class B common stock;
• authorize the issuance of “blank check” preferred stock that our Board could use to implement a stockholder rights plan (also known as a “poison pill”);
• eliminate the ability of our stockholders to call special meetings of stockholders;
• prohibit stockholder action by written consent, which requires all stockholder actions to be taken at a meeting of our stockholders;
• prohibit cumulative voting;
• authorize our Board to amend our bylaws;
• establish advance notice requirements for nominations for election to our board or for proposing matters that can be acted upon by stockholders at annual stockholder meetings; and
• require a super-majority vote of stockholders to amend some of the provisions described above.
In addition, Section 203 of the General Corporation Law of the State of Delaware prohibits a publicly-held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns, or within the last three years has owned, 15% of our voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.
Any provision of our certificate of incorporation, bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for our stockholders to receive a premium for their shares of our capital stock and could also affect the price that some investors are willing to pay for our Class A common stock.
We do not currently intend to pay dividends on our Class A common stock and, consequently, your ability to achieve a return on your investment will depend on appreciation of the value of our Class A common stock.
We have never declared or paid any cash dividends on our equity securities. We currently anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate declaring or paying any cash dividends for the foreseeable future. Any return to stockholders will therefore be limited to any appreciation in the value of our Class A common stock, which is not certain.
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If we engage in acquisitions, reorganizations or business combinations, we will incur a variety of risks that could adversely affect our business operations or our stockholders.
We may consider strategic alternatives, such as acquiring businesses, technologies or products or entering into a business combination with another company. If we do pursue such a strategy, we could, among other things:
• issue equity securities that would dilute our current stockholders’ percentage ownership;
• incur substantial debt that may place strains on our operations;
• spend substantial operational, financial and management resources in integrating new businesses, personnel intellectual property, technologies and products;
• assume substantial actual or contingent liabilities;
• reprioritize our programs and even cease development and commercialization of Lomecel-B;
• suffer the loss of key personnel, or
• merge with, or otherwise enter into a business combination with, another company in which our stockholders would receive cash or shares of the other company or a combination of both on terms that certain of our stockholders may not deem desirable.
Although we intend to evaluate and consider different strategic alternatives, we have no agreements or understandings with respect to any acquisition, reorganization or business combination at this time.
The issuance of additional stock in connection with acquisitions or otherwise will dilute all other stockholdings.
We are not restricted from issuing additional shares of our Class A common stock, or from issuing securities that are convertible into or exchangeable for, or that represent the right to receive, Class A common stock. As of July 13, 2023, we had an aggregate of 100 million shares of common stock authorized and of that approximately 74.8 million not issued, outstanding or reserved for issuance (for purposes of warrant exercise or under the Company’s current 2021 Equity Incentive Plan). We may issue all of these shares without any action or approval by our stockholders. We may expand our business through complementary or strategic business combinations or acquisitions of other companies and assets, and we may issue shares of Class A common stock in connection with those transactions. The market price of our Class A common stock could decline as a result of our issuance of a large number of shares of Class A common stock, particularly if the per share consideration we receive for the stock we issue is less than the per share book value of our Class A common stock or if we are not expected to be able to generate earnings with the proceeds of the issuance that are as great as the earnings per share we are generating before we issue the additional shares. In addition, any shares issued in connection with these activities, the exercise of warrants or stock options or otherwise would dilute the percentage ownership held by our investors. We cannot predict the size of future issuances or the effect, if any, that they may have on the market price of our Class A common stock.
Risks Related to our Business
Investors should carefully consider the risks and uncertainties and all other information contained or incorporated by reference in this prospectus, including the risks and uncertainties discussed under “Risk Factors” in our most recent Annual Report on Form 10-K, as may be amended from time to time, and in subsequent filings that are incorporated herein by reference. All these risk factors are incorporated by reference herein in their entirety. These risks and uncertainties are not the only ones facing us. Our business, financial condition or results of operations could be materially adversely affected by any of these risks. The trading price of our common stock could decline due to any of these risks, and you may lose all or part of your investment. This prospectus and the incorporated documents also contain forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks mentioned in this prospectus.
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THE RIGHTS OFFERING
The following summary contains basic information about our Class A common stock and the Rights Offering and is not intended to be complete. It does not contain all the information that may be important to you. Before deciding whether to exercise your Subscription Rights, you should carefully read this prospectus or any prospectus supplement, including the information set forth under the heading “Risk Factors” and the information that is incorporated by reference into this prospectus or any prospectus supplement. For a more complete understanding of our Class A common stock, you should read the section entitled “Description of Common Stock” in this prospectus.
The following describes the Rights Offering in general and assumes, unless specifically provided otherwise, that you are a record holder of our common stock or Participating Warrants on the Record Date. If you hold your shares in a brokerage account or through a dealer or other nominee, please also refer to “— Notice to Brokers and Nominees” below.
The Subscription Rights
We are distributing to the record holders, at no charge, transferable Subscription Rights to purchase shares of Class A common stock at a per share Subscription Right price equal to $ . The Subscription Rights will be transferable during the course of the subscription period. We have applied to list such rights for trading on Nasdaq under the symbol “LGVNR,” and we will not commence the Rights Offering until the Subscription Rights have been so listed. The Subscription Rights are a new issue of securities with no prior trading market, and we cannot provide you any assurances as to the liquidity of the trading market for the Subscription Rights or the market value of the rights. Each Subscription Right will entitle you to purchase one share of our Class A common stock. Each record holder will receive five Subscription Rights for each whole share of our common stock owned by such record holder and five Subscription Rights for each whole share of Class A common stock that would be owned upon full exercise of our existing warrants exercisable into shares of our Class A common stock owned by such record holder as of the Record Date. Each Subscription Right entitles the record holder to a basic subscription right and an over-subscription privilege.
Basic Subscription Right
Your basic subscription right will entitle you to purchase one share of Class A common stock, at the subscription price, owned and settled by 5:00 p.m., Eastern Time, on August 16, 2023. If you owned 100 shares of Class A common stock as of such time, on the Record Date you will receive 500 Subscription Rights and will have the basic subscription right to purchase 500 shares of Class A common stock. You may exercise all or a portion of your basic subscription right or you may choose not to exercise any basic subscription right at all. Subject to proration, if applicable, we will seek to honor your basic subscription right request in full. In the event that holders exercise basic subscription rights in excess of $30.0 million, the amount subscribed for by each person will be proportionally reduced, based on the amount subscribed for by each person (not including any over-subscription privilege subscribed for). See “The Rights Offering — Limitation on the Purchase of Shares of Class A Common Stock” for a description of certain limitations on purchase.
Over-Subscription Privilege
If you exercise your basic subscription right in full, you may also choose to exercise your over-subscription privilege. Subject to proration and cutback, if applicable, we will seek to honor the over-subscription privilege requests in full. If over-subscription requests exceed the number of unsubscribed shares available, however, we will allocate the available shares on a prorated basis based on the amount oversubscribed for (not including the basic subscription rights).
Colonial Stock Transfer Company, Inc., the Subscription Agent for the Rights Offering, will determine the over-subscription allocation based on the formula described above. To the extent the aggregate subscription payment of the actual number of unsubscribed shares of Class A common stock available to you pursuant to the over-subscription privilege is less than the amount you actually paid in connection with the exercise of the over-subscription privilege, you will be allocated only the number of unsubscribed shares of Class A common stock available to you, and any excess subscription payments will be promptly returned to you, without interest or penalty, after expiration of the Rights Offering.
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We can provide no assurances that you will actually be entitled to purchase the number of shares of Class A common stock issuable upon the exercise of your over-subscription privilege in full at the expiration of the Rights Offering. We will not be able to satisfy any requests for shares of Class A common stock pursuant to the over-subscription privilege if all of our stockholders exercise their basic subscription right in full, and we will only honor an over-subscription privilege to the extent sufficient shares of Class A common stock are available following the exercise of the basic subscription right.
Limitation on the Purchase of Shares of Class A Common Stock
You may only purchase the number of whole shares of Class A common stock purchasable upon exercise of the number of basic subscription rights distributed to you in the Rights Offering, plus the over-subscription privilege, if any. Accordingly, the number of shares of Class A common stock that you may purchase in the Rights Offering is limited by the number of shares of our common stock (or warrants exercisable for Class A common stock) you held on the Record Date and by the extent to which other stockholders exercise their basic subscription right and over-subscription privileges, which we cannot determine prior to completion of the Rights Offering.
In the event that holders exercise basic subscription rights for amounts in excess of $30.0 million, the amount subscribed for by each person will be proportionally reduced, based on the amount subscribed for by each holder pursuant to their basic subscription right (i.e., not including any over-subscription privilege subscribed for).
In the event that the exercise by a stockholder of the basic subscription right or the over-subscription privilege could, as determined by Longeveron in its sole discretion, potentially result in a limitation on the Company’s ability to use net operating losses, tax credits and other tax attributes, which we refer to as the “Tax Attributes,” under the Internal Revenue Code of 1986, as amended, which we refer to as the “Code”, and rules promulgated by the Internal Revenue Service, Longeveron may, but is under no obligation to, reduce the exercise by such stockholder of the basic subscription right or the over- subscription privilege to such number of shares of Class A common stock as Longeveron in its sole discretion shall determine to be advisable in order to preserve its ability to use the Tax Attributes. If the amount of Subscription Rights that you exercise is so limited, any amount not used for purchases also will be refunded.
Subscription Price
The subscription price will be equal to $ . The subscription price does not necessarily bear any relationship to our past or expected future results of operations, cash flows, or current or prospective financial condition.
Determination of Subscription Price
In the determining the subscription price, an independent committee of the Board of Directors considered a variety of factors including those listed below:
• our need to raise capital in the near term to continue our operations;
• the current and historical trading prices of our Class A common stock on Nasdaq;
• a price that would increase the likelihood of participation in the Rights Offering; and
• the cost of capital from other sources.
The subscription price does not necessarily bear any relationship to any established criteria for value. No valuation consultant or investment banker has opined upon the fairness or adequacy of the subscription price. You should not consider the subscription price as an indication of actual value of the company or our Class A common stock. You should not assume or expect that, after the Rights Offering, our shares of Class A common stock will trade at or above the subscription price in any given time period. The market price of our Class A common stock may decline after the Rights Offering. We cannot assure you that you will be able to sell the Subscription Rights, or the shares of our Class A common stock purchased during the Rights Offering at a price equal to or greater than the subscription price. You should obtain a current price quote for our Class A common stock before exercising your Subscription Rights and make your own assessment of our business and financial condition, our prospects for the future, and the terms of the Rights Offering. Once made, all exercises of Subscription Rights are irrevocable.
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Subscription Rights Will Trade Publicly
The Subscription Rights will be transferable during the course of the subscription period. We have applied to list such rights for trading on Nasdaq under the symbol “LGVNR,” and we anticipate that the rights will be listed upon commencement of the Rights Offering. We will not commence this offering until the Subscription Rights are approved for listing by Nasdaq. The Subscription Rights are a new issue of securities with no prior trading market, and we cannot provide you any assurances as to the liquidity of the trading market for the Subscription Rights or the market value of the rights. Holders of Subscription Rights are encouraged to contact their custodian bank, broker, dealer, or other nominee for more information about trading of the Subscription Rights. In the event you purchase Subscription Rights in the open market and the Rights Offering is not consummated or you do not timely exercise the Subscription Rights purchased, the purchase price will not be refunded to you.
This prospectus may be used to cover sales of Subscription Rights by our principal stockholders, and certain of our directors and executive officers as provided for herein. None of our principal stockholders or such directors or executive officers have entered into any binding commitment or agreement to subscribe for or sell Subscription Rights received in this Rights Offering. We will not receive any proceeds from any sale of Subscription Rights by our principal stockholders or such directors and executive officers.
Transfers and Sales of Subscription Rights
Registered Holders. If you do not wish to exercise your Subscription Rights, you may instruct the Subscription Agent to sell or transfer all or a portion of your Subscription Rights. The Subscription Rights evidenced by a Rights Certificate may be transferred (1) in whole, by endorsing the Rights Certificate for transfer in accordance with the accompanying instructions or (2) in part, by delivering to the Subscription Agent a Rights Certificate properly endorsed for transfer, with instructions to register such portion of the Subscription Rights evidenced thereby in the name of the transferee and to issue a new Rights Certificate to the transferee evidencing such transferred Subscription Rights. In such event, a new Rights Certificate evidencing the balance of the Subscription Rights, if any, will be issued to the holder of the Subscription Rights or, if the holder so instructs, to an additional transferee. The signature on the Rights Certificate must correspond to the name as written upon the face of the Rights Certificate, without any alteration or change. A holder of a Rights Certificate and their transferee may also submit a simultaneous instruction to the Subscription Agent to transfer the holder’s Subscription Rights and to exercise such transferred Subscription Rights on behalf of the transferee by following the instructions in the Rights Certificate. In this case, a new Rights Certificate will not be issued to the transferee.
We have applied to list such rights for trading on Nasdaq under the symbol “LGVNR,” and we anticipate that the rights will be listed upon commencement of the Rights Offering. We will not commence this offering until the Subscription Rights are approved for listing by Nasdaq. The Subscription Rights are a new issue of securities with no prior trading market, and we cannot provide you any assurances as to the liquidity of the trading market for the Subscription Rights or the market value of the rights. The Subscription Agent must receive simultaneously submitted transfer and exercise instructions by 5:00 p.m., Eastern Time, on the Expiration Date. Holders of Subscription Rights wishing to transfer all or a portion of their Subscription Rights without simultaneous exercise of transferred rights by the transferee should allow at least five business days prior to the Expiration Date for: (i) the transfer instructions to be received and processed by the Subscription Agent; (ii) a new Rights Certificate to be issued and transmitted to the transferee or transferees with respect to transferred Subscription Rights and to the transferor with respect to retained Subscription Rights, if any; and (iii) the Subscription Rights evidenced by such new Rights Certificate to be exercised or sold by the recipients thereof. The Class A common stock underlying the Subscription Rights may not be transferred separately.
If you wish to sell all or a portion of your Subscription Rights, you may instruct the Subscription Agent to sell all or a portion of your Subscription Rights by following the instructions in your Rights Certificate. The Subscription Agent will only facilitate sales, subdivisions or transfers (without simultaneous exercise) of the physical Subscription Rights until 5:00 p.m., Eastern Time, five business days prior to September 21, 2023, the Expiration Date (as it may be extended). Therefore, if you wish to sell, subdivide or transfer (without simultaneous exercise) your Subscription Rights, the Subscription Agent must receive your instruction by 5:00 p.m., Eastern Time, on September 14, 2023. Neither we nor the Subscription Agent shall have any liability to a transferee or transferor of Subscription Rights if Rights Certificates are not received five business days prior to September 21, 2023, the Expiration Date (as it may be extended).
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Except for the fees charged by the Subscription Agent, which will be paid by us, all commissions, fees and other expenses (including brokerage commissions and transfer taxes) incurred or charged in connection with the purchase, sale or exercise of Subscription Rights will be for the account of the transferor of the Subscription Rights. None of those commissions, fees or expenses will be paid by us or the Subscription Agent.
We anticipate that the Subscription Rights will be eligible for transfer through, and that the exercise of the Subscription Right may be effected through, the facilities of DTC.
Beneficial Owners. If your shares or warrants are held in the name of a custodian bank, broker, dealer, or other nominee, you may transfer or sell your Subscription Rights by contacting the custodian bank, broker, dealer, or other nominee through which you hold your securities. Please contact your custodian bank, broker, dealer, or other nominee for specific instructions and deadlines related to the transfer of your Subscription Rights.
Expiration Date; Extension
The subscription period, during which you may exercise your Subscription Rights, expires at 5:00 p.m. Eastern Time, on September 21, 2023, which is the expiration of the Rights Offering. If you do not exercise your Subscription Rights before that time, your Subscription Rights will expire and will no longer be exercisable. We will not be required to issue shares to you if the Subscription Agent receives your subscription documentation or your subscription payment after that time. We have the option to extend the Rights Offering in our sole discretion, for a period not to exceed 30 days although we do not presently intend to do so. We may extend the Rights Offering by giving oral or written notice to the Subscription Agent before the Rights Offering expires. If we elect to extend the Rights Offering, we will issue a press release announcing the extension no later than 9:00 a.m. Eastern Time, on the next business day after the most recently announced Expiration Date of the Rights Offering.
If you hold your shares of Class A common stock in the name of a broker, dealer, custodian bank or other nominee, the nominee will exercise the Subscription Rights on your behalf in accordance with your instructions. Please note that the nominee may establish a deadline that may be before 5:00 p.m. Eastern Time, on September 21, 2023, which is the Expiration Date that we have established for the Rights Offering.
Termination
The Company has the ability to terminate the Rights Offering prior to its completion. If we terminate the Rights Offering, we will issue a press release notifying stockholders and the public of the termination.
Return of Funds upon Completion or Termination
The Subscription Agent will hold funds received in payment for shares in a segregated account pending completion of the Rights Offering. The Subscription Agent will hold this money until the Rights Offering is completed or is terminated. You will not be able to rescind your subscription. Any excess subscription payments, including refunds resulting from will be returned to you promptly after the expiration of the Rights Offering, without interest or penalty. If the Rights Offering is terminated for any reason, all subscription payments received by the Subscription Agent will be promptly returned, without interest or penalty. However, if you purchase Subscription Rights in the open market and the Rights Offering is not consummated or you do not timely exercise the Subscription Rights purchased, the purchase price will not be refunded to you.
Placement Period Following Expiration of Rights Offering
If the Rights Offering is not fully subscribed following its expiration, R.F. Lafferty has additionally agreed to use its best efforts to place any unsubscribed shares of Class A common stock registered hereunder at the subscription price for an additional period of up to 45 days. The number of shares of Class A common stock that may be sold by us hereunder during this 45 day period will depend upon the number of shares of Class A common stock that remain available hereunder following the subscription and exercise of Subscription Rights by our common stockholders and certain warrant holders. No assurance can be given that any unsubscribed shares of Class A common stock will be available for sale, or will be sold during this period.
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Shares of Our Class A Common Stock Outstanding After the Rights Offering
On July 13, 2023, 6,311,725 shares of our Class A common stock and 14,855,539 shares of our Class B common stock were outstanding, along with warrants currently exercisable for 1,271,399 shares of Class A common stock, at a weighted average exercise price of $17.26 per share. Based on the foregoing, and assuming no other transactions by us involving our Class A common stock prior to the expiration of the Rights Offering, if the Rights Offering is fully subscribed for the maximum number of shares of Class A common stock available, approximately shares of our Class A common stock will be issued and outstanding. The exact number of shares of Class A common stock that we will issue in the Rights Offering will depend on subscription price and the number of shares of Class A common stock that are subscribed for in the Rights Offering. The Rights Offering will have no impact on the number of shares of Class B common stock outstanding.
Methods for Exercising Subscription Rights
The exercise of Subscription Rights is irrevocable and may not be canceled or modified. You may exercise your Subscription Rights as follows:
Subscription by Record Holders
If you are a stockholder of record, the number of shares of Class A common stock you may purchase pursuant to your Subscription Rights in indicated on the Rights Certificate. You may exercise your Subscription Rights by properly completing and executing the Rights Certificate and forwarding it, together with your full payment, to the Subscription Agent at the address given below under “Subscription Agent” to be received before 5:00 p.m. Eastern Time, on September 21, 2023.
Subscription by DTC Participants
We expect that the exercise of your Subscription Rights may be made through the facilities of DTC. If your Subscription Rights are held of record through DTC, you may exercise your Subscription Rights by instructing DTC, or having your broker instruct DTC, to transfer your Subscription Rights from your account to the account of the Subscription Agent, together with certification as to the aggregate number of Subscription Rights you are exercising and the number of shares of our Class A common stock you are subscribing for under your basic subscription right and your over-subscription privilege, if any, and your full subscription payment.
Subscription by Beneficial Owners
If you are a beneficial owner of shares of our Class A common stock that are registered in the name of a broker, dealer, custodian bank, or other nominee, you will not receive a Subscription Rights certificate. Instead, we will issue Subscription Rights to such nominee record holder for each share of our Class A common stock held by such nominee at the Record Date. If you are not contacted by your nominee, you should promptly contact your nominee in order to subscribe for shares in the Rights Offering or to sell Subscription Rights, and follow the instructions provided by your nominee. Your nominee may establish a deadline before the expiration of the Rights Offering by which you must provide it with your instructions to exercise your Rights, along with the required subscription payment.
To properly exercise your over-subscription privilege, you must deliver the subscription payment related to your over-subscription privilege before the Rights Offering expires.
Subscription Agent
The Subscription Agent for this offering is Colonial Stock Transfer Company, Inc. The address to which subscription documents and payments should be mailed or delivered by overnight courier is provided below. If sent by mail, we recommend that you send documents and payments by registered mail, properly insured, with return receipt requested, and that you allow a sufficient number of days to ensure delivery to the Subscription Agent before the Rights Offering expires.
If you deliver subscription documents or rights certificates in a manner different than that described in this prospectus, then we may not honor the exercise of your Subscription Rights.
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You should direct any questions or requests for assistance concerning the method of subscribing for the shares of our Class A common stock or for additional copies of this prospectus to the information agent, Okapi Partners LLC, at (212) 297-0720 (bankers and brokers) or (844) 201-1170 (all others) or email at info@okapipartners.com.
Payment Methods
Payments must be made in full in U.S. Currency by cashier’s check or by wire transfer, and payable to “Colonial Stock Transfer Company, Inc., as Subscription Agent for Longeveron Inc.” You must timely pay the full subscription payment, including payment for the over-subscription privilege, for the full number of shares of Class A common stock you wish to acquire pursuant to the exercise of Subscription Rights by delivering a:
• Cashier’s check, drawn on a U.S. Bank payable to Colonial Stock Transfer Company, Inc., as Subscription Agent for Longeveron Inc. to 7840 S 700 E, Sandy, UT 84070; or
• Wire transfer of immediately available funds directly to the account maintained by Colonial Stock Transfer Company, Inc., as Subscription Agent, for purposes of accepting subscriptions in the Rights Offering for Longeveron Inc., as set forth in the subscription documents.
You should read the instruction letter accompanying the Rights Certificate carefully and strictly follow it. Do not send subscription documents or payments directly to us. We will not consider your subscription received until the Subscription Agent has received delivery of a properly completed and duly executed Rights Certificate and payment of the full subscription amount.
The method of delivery of subscription documents and payment of the subscription amount to the Subscription Agent will be at the risk of the holders of Subscription Rights. If sent by mail, we recommend that you send those statements and payments by registered mail, properly insured, with return receipt requested, or by overnight courier, and that you allow a sufficient number of days to ensure delivery to the Subscription Agent before the Rights Offering expires.
Missing or Incomplete Subscription Forms or Payment
If you fail to complete and sign the Subscription Rights certificate or otherwise fail to follow the subscription procedures that apply to the exercise of your Subscription Rights before the Rights Offering expires, the Subscription Agent will reject your subscription or accept it to the extent of the payment received. Neither we nor our Subscription Agent undertakes any responsibility or action to contact you concerning an incomplete or incorrect subscription form, nor are we under any obligation to correct such forms. We have the sole discretion to determine whether a subscription exercise properly complies with the subscription procedures.
The payment received will be applied to exercise your Subscription Rights to the fullest extent possible based on the amount of the payment received. Any excess subscription payments received by the Subscription Agent will be returned, without interest or penalty, promptly following the expiration of the Rights Offering.
Guaranteed Delivery Procedures
If you wish to exercise rights, but you do not have sufficient time to deliver the Rights Certificate evidencing your rights to the Subscription Agent before the expiration of the subscription period, you may exercise your rights by the following guaranteed delivery procedures:
• deliver to the Subscription Agent before the expiration of the subscription period the payment for each share you elected to purchase pursuant to the exercise of your Subscription Rights in the manner set forth above under “The Rights Offering — Methods for Exercising Subscription Rights”;
• deliver to the Subscription Agent before the expiration of the subscription period the form entitled “Notice of Guaranteed Delivery”; and
• deliver the properly completed Rights Certificate evidencing your rights being exercised and the form entitled “Nominee Holder Certification,” if applicable, with any required signatures guaranteed, to the Subscription Agent within two (2) business days following the date the Subscription Agent receives your Notice of Guaranteed Delivery.
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Your Notice of Guaranteed Delivery must be delivered in substantially the same form provided with the “Instructions for Use of Rights Certificate,” which will be distributed to you with your Rights Certificate. Your Notice of Guaranteed Delivery must include a signature guarantee from an eligible institution, acceptable to the Subscription Agent. A form of that guarantee is included with the Notice of Guaranteed Delivery. In your Notice of Guaranteed Delivery, you must provide:
• your name;
• the number of rights represented by your Rights Certificate and the number of shares of our Class A common stock for which you are subscribing under your basic subscription right and the number of shares of our Class A common stock for which you are subscribing under your over-subscription privilege; and
• your guarantee that you will deliver to the Subscription Agent a Rights Certificate evidencing the rights you are exercising within two (2) business days following the date the Subscription Agent receives your Notice of Guaranteed Delivery.
You may deliver your Notice of Guaranteed Delivery to the Subscription Agent in the same manner as your Rights Certificate at the address set forth above under “To whom should I send my forms and payment?” The Subscription Agent will send you additional copies of the form of Notice of Guaranteed Delivery if you need them. You should call Okapi Partners LLC, our information agent for the Rights Offering, at (844) 201-1170 or email at info@okapipartners.com, to request additional copies of the form of Notice of Guaranteed Delivery.
Issuance of Class A Common Stock Acquired in the Rights Offering
The shares of Class A common stock that are purchased in the Rights Offering will be issued in book-entry, or uncertificated, form meaning that you will receive a direct registration (DRS) account statement from our Transfer Agent reflecting ownership of these securities if you are a holder of record of shares. If you hold your shares of Class A common stock in the name of a custodian bank, broker, dealer, or other nominee, DTC will credit your account with your nominee with the securities you purchased in the Rights Offering.
No Fractional Shares
We will not issue fractional shares of Class A common stock in the Rights Offering.
Notice to Brokers and Nominees
If you are a broker, dealer, bank, or other nominee holder that holds shares of our Class A common stock for the account of others on the Record Date, you should notify the beneficial owners of the shares for whom you are the nominee of the Rights Offering as soon as possible to learn their intentions with respect to exercising their Subscription Rights. If a beneficial owner of our Class A common stock so instructs, you should complete the subscription rights statement and submit it to the Subscription Agent with the proper subscription payment by the Expiration Date. You may exercise the number of Subscription Rights to which all beneficial owners in the aggregate otherwise would have been entitled had they been direct holders of our common stock on the Record Date, provided that you, as a nominee record holder, make a proper showing to the Subscription Agent by submitting the form entitled “nominee holder certification,” which is provided with your Rights Offering materials. If you did not receive this form, you should contact our Subscription Agent to request a copy.
Validity of Subscriptions
We will resolve all questions regarding the validity and form of the exercise of your Subscription Rights, including time of receipt and eligibility to participate in the Rights Offering. Our determination will be final and binding. Once made, subscriptions are irrevocable; we will not accept any alternative, conditional, or contingent subscriptions. We reserve the absolute right to reject any subscriptions not properly submitted or the acceptance of which would be unlawful. You must resolve any irregularities in connection with your subscriptions before the Expiration Date of the Rights Offering, unless we waive them in our sole discretion. Neither we nor the Subscription Agent is under any duty to notify you or your representative of defects in your subscriptions. A subscription will be considered accepted,
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Table of Contents
subject to our right to withdraw or terminate the Rights Offering, only when the Subscription Agent receives a properly completed and duly executed subscription rights statement and any other required documents and the full subscription payment. Our interpretations of the terms of the Rights Offering will be final and binding.
Stockholder Rights
You will have no rights as a holder of the shares of our Class A common stock you purchase in the Rights Offering until shares are issued in book-entry form or your account at your broker, dealer, bank, or other nominee is credited with the shares of our Class A common stock purchased in the Rights Offering.
Foreign Stockholders
We will not mail this prospectus or any Rights Certificates to stockholders with addresses that are outside the United States or that have an army post office or foreign post office address. The Subscription Agent will hold these Rights Certificates for their account. To exercise Subscription Rights, our foreign stockholders must notify the Subscription Agent prior to 5:00 p.m. Eastern Time, on September 15, 2023, the third business day prior to the Expiration Date, of your exercise of Subscription Rights and provide evidence satisfactory to us, such as a legal opinion from local counsel, that the exercise of such Subscription Rights does not violate the laws of the jurisdiction in which such stockholder resides and payment by a U.S. bank in U.S. dollars before the expiration of the offer. If no notice is received by such time or the evidence presented is not satisfactory to us, the Subscription Rights represented thereby will expire.
Regulatory Limitation
We will not be required to issue to you shares of our Class A common stock pursuant to the Rights Offering if, in our opinion, you are required to obtain prior clearance or approval from any state or federal regulatory authorities to own or control such shares and if, at the time the Rights Offering expires, you have not obtained such clearance or approval.
No Revocation or Change
Once you submit the Rights Certificate or have instructed your nominee of your subscription request, you are not allowed to revoke or change the exercise or request a refund of monies paid. All exercises of Subscription Rights are irrevocable, even if you learn information about us that you consider to be unfavorable. You should not exercise your Subscription Rights unless you are certain that you wish to purchase shares at the subscription price.
U.S. Federal Income Tax Treatment of Rights Distribution
For U.S. federal income tax purposes, we do not believe holders of shares of our Class A common stock should recognize income or loss upon receipt or exercise of a Subscription Right. See “Material U.S. Federal Income Tax Consequences” on page 51.
No Recommendation to Rights Holders
Our Board of Directors is not making a recommendation regarding your exercise of the Subscription Rights. Stockholders who exercise Subscription Rights risk investment loss on money invested. We cannot assure you that the market price of our Class A common stock will reach or exceed the subscription price after the offering, and even if it does so, that it will not subsequently decline. We also cannot assure you that you will be able to sell shares of our Class A common stock purchased in the Rights Offering at a price equal to or greater than the subscription price. You should make your investment decision based on your assessment of our business and financial condition, our prospects for the future and the terms of the Rights Offering. Please see “Risk Factors” on page 18 for a discussion of some of the risks involved in investing in our Class A common stock.
Fees and Expenses
We will pay all fees charged by the Subscription Agent, information agent and by R.F. Lafferty acting as the dealer-manager and placement agent for any unsubscribed shares. You are responsible for paying any other commissions, fees, taxes or other expenses incurred in connection with the exercise of your Subscription Rights.
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Listing
The shares of our Class A common stock are currently traded on The Nasdaq Capital Market under the symbol “LGVN”. Until the expiration of the Rights Offering, the Subscription Rights will be listed for trading on Nasdaq under the symbol “LGVNR.” We will not commence this offering until the Subscription Rights are approved for listing by Nasdaq.
Important
Please follow the directions regarding delivery of Rights Certificates and payments described above. Do not send Rights Certificates directly to us. You are responsible for choosing the payment and delivery method for your Rights Certificate and you bear the risks associated with such delivery. If you choose to deliver your Rights Certificate and payment by mail, we recommend that you use registered mail, properly insured, with return receipt requested. We also recommend that you allow a sufficient number of days to ensure delivery to the Subscription Agent prior to the expiration time.
Distribution Arrangements
R.F. Lafferty is the dealer-manager for the Rights Offering. The dealer-manager will provide marketing assistance and advice to us in connection with the Rights Offering. R.F. Lafferty is not underwriting any of the rights being sold in this offering and does not make any recommendation with respect to such rights (including with respect to the exercise of such rights). As contemplated by the dealer-manager agreement, R.F. Lafferty will not solicit any holders of the securities (including the rights) or engage in the offer and sale of such securities in any jurisdiction in which such securities are not qualified or registered for sale in accordance with, or exempt from, the state securities or blue sky laws of such jurisdiction unless and until (i) we have advised R.F. Lafferty that such securities have been qualified or registered in accordance with, or are exempt from application of, the state securities or blue sky laws of such jurisdiction, as applicable, and (ii) R.F. Lafferty possesses all required licenses and registrations to solicit or offer such securities in that jurisdiction. See “Plan of Distribution” on page 57 for a discussion of the fees and expenses to be paid to the dealer-manager in connection with the Rights Offering.
Other Matters
We are not making the Rights Offering in any state or other jurisdiction in which it is unlawful to do so, nor are we distributing or accepting any offers to purchase any shares of our Class A common stock from holders of Subscription Rights who are residents of those states or other jurisdictions or who are otherwise prohibited by federal or state laws or regulations from accepting or exercising the Subscription Rights. We may delay the commencement of the Rights Offering in those states or other jurisdictions, or change the terms of the Rights Offering, in whole or in part, in order to comply with the securities laws or other legal requirements of those states or other jurisdictions. Subject to state securities laws and regulations, we also have the discretion to delay allocation and distribution of any shares you may elect to purchase by exercise of your subscription privileges in order to comply with state securities laws. We may decline to make modifications to the terms of the Rights Offering requested by those states or other jurisdictions, in which case, if you are a resident in those states or jurisdictions or if you are otherwise prohibited by federal or state laws or regulations from accepting or exercising the Subscription Rights, you will not be eligible to participate in the Rights Offering. However, we are not currently aware of any states or jurisdictions that would preclude participation in the Rights Offering.
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USE OF PROCEEDS
Based on an offering price of $ per right, and assuming the Rights Offering is fully subscribed for, we expect to receive net proceeds from the sale of the securities that we are offering to be approximately $ million, after deduction of dealer-manager fees, and commissions and estimated expenses payable by us.
We intend to use the net proceeds from this offering for our ongoing clinical and regulatory development of Lomecel-B™ for the treatment of several disease states and indications, including HLHS and Alzheimer’s Disease, and the ongoing and prospective clinical studies of Lomecel-B™ for the treatment of Aging-related Frailty study being conducted in Japan; obtaining regulatory approvals; capital expenditures, working capital and other general corporate purposes. We are subject to substantial risks that could require us to obtain additional funding in order to achieve these objectives. See “Risk Factors.” We may need substantial additional capital in the future, which could cause dilution to our existing stockholders, restrict our operations or require us to relinquish rights, and if additional capital is not available, we may have to delay, reduce or cease operations.
Our expected use of net proceeds from this offering represents our current intentions based upon our present plans and business condition. The amounts and timing of our actual use of net proceeds will vary depending on numerous factors, including our ability to obtain additional financing, the relative success and cost of clinical and regulatory development programs and the amount and timing of product revenue, if any. In addition, we might decide to postpone or not pursue certain activities if, among other factors, the net proceeds from this offering and our other sources of cash are less than expected. As a result, management will have broad discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the net proceeds. Pending the uses described above, we intend to invest the net proceeds in interest-bearing investment-grade securities or deposits.
We will not receive any proceeds from any sales of Subscription Rights by our principal stockholders, directors and executive officers. They will be responsible for payment of any commissions and expenses incurred by them for brokerage, accounting, tax or legal services or any other expenses incurred by them in connection with their sales of the Subscription Rights. We will bear all other costs, fees and expenses incurred in effecting the registration of the Subscription Rights covered by this prospectus, including, without limitation, all registration and filing fees and fees and expenses of our counsel and our accountants.
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PRINCIPAL STOCKHOLDER, DIRECTOR AND EXECUTIVE OFFICER INFORMATION
This prospectus covers the possible sale by our principal stockholders, Dr. Joshua Hare, co-founder, Chief Science Officer and Chairman of the Board of Directors, and Donald M. Soffer, co-founder and former member of our Board of Directors, as well as certain other current members of our Board of Directors and Executive Officers as identified in the table below (the “Affiliates”) of up to 77,594,345 Subscription Rights to purchase an equivalent number of shares of our Class A common stock. The Affiliates may sell some, all, or none of the referenced Subscription Rights. We have prepared the following table based on written representations and information furnished to us by or on behalf of the Affiliates, and based on such information (i) none of the Affiliates are broker-dealers or affiliates of broker-dealers, and (ii) no Affiliate has direct or indirect agreements or understandings with any person to distribute their Subscription Rights.
Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. This power can be exclusive or shared, direct or indirect. For purposes of this table, a person is deemed to have “beneficial ownership” of any ordinary shares that such person has the right to acquire within sixty (60) days of the date of this prospectus. For purposes of computing the percentage of outstanding shares held by each person named below, any shares that such person or persons has the right to acquire within sixty (60) days of the date of this prospectus are deemed to be outstanding for such person, but not deemed to be outstanding for the purpose of computing the percentage ownership of any other person or the number of Subscription Rights to be Offered to such person. The inclusion herein of any shares listed as beneficially owned does not constitute an admission of beneficial ownership by any person.
The table includes:
• the name of each Affiliate and the number and percentage of our shares of common stock beneficially owned (calculated as set forth above) by such Affiliate prior to this Rights Offering;
• the number of Subscription Rights being offered for such Affiliate’s account; and
• the number of Subscription Rights to be owned by such Affiliate after completion of this Rights Offering (assuming the sale of all Subscription Rights offered by this prospectus).
Unless otherwise indicated, none of the Affiliates is a broker-dealer registered under Section 15 of the Exchange Act, or an affiliate of a broker-dealer registered under Section 15 of the Exchange Act.
Unless otherwise indicated the address of each beneficial owner is c/o Longeveron Inc., 1951 NW 7th Ave, Suite 520, Miami, FL 33136, and none of the shares listed are pledged. The percentage of beneficial ownership is based on 6,311,725 shares of Class A Common Stock and 14,855,539 shares of Class B Common Stock as of July 13, 2023. Additionally, some or all of the Affiliates may have sold or transferred some or all of their shares of common stock in exempt or non-exempt transactions since such date. Other information about the Affiliates may also change over time.
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Table of Contents
|
Name of Affiliate
|
|
Before the Offering(1)
|
|
Number of
Subscription
Rights Being
Offered by this
Prospectus(2)
|
|
Number of
Subscription
Rights Owned
After Offering
|
|
Number of
Shares of
Class A
common stock
|
|
Number of
Shares of
Class B
common stock
|
|
% common
stock owned
|
|
|
Donald M. Soffer(3)
|
|
158,514
|
|
6,535,223
|
|
31.62
|
%
|
|
33,468,685
|
|
—
|
|
Joshua M. Hare, M.D.(4)
|
|
331,687
|
|
7,612,902
|
|
37.53
|
%
|
|
39,561,305
|
|
—
|
|
Rock Soffer(5)
|
|
261,757
|
|
410,094
|
|
3.17
|
%
|
|
3,359,255
|
|
—
|
|
Neil E. Hare(5)
|
|
58,514
|
|
—
|
|
0.28
|
%
|
|
292,570
|
|
—
|
|
Cathy Ross(5)
|
|
5,000
|
|
—
|
|
0.02
|
%
|
|
25,000
|
|
—
|
|
Ursula Ungaro(5)
|
|
5,000
|
|
—
|
|
0.02
|
%
|
|
25,000
|
|
—
|
|
Khoso Baluch(5)
|
|
2,500
|
|
—
|
|
0.01
|
%
|
|
12,500
|
|
—
|
|
Jeffrey Pfeffer(5)
|
|
2,500
|
|
—
|
|
0.01
|
%
|
|
12,500
|
|
—
|
|
Wa’el Hashad(6)
|
|
71,181
|
|
—
|
|
0.34
|
%
|
|
105,905
|
|
—
|
|
Paul Lehr(7)
|
|
193,057
|
|
—
|
|
0.91
|
%
|
|
731,625
|
|
—
|
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Table of Contents
RELATED PARTY TRANSACTIONS
The following includes a summary of transactions as of the date hereof to which we have been a party in which the amount involved exceeded or will exceed $120,000, and in which any of our principal stockholders, directors and executive officers or any member of the immediate family of any such persons had or will have a direct or indirect material interest, other than equity and other compensation, termination, change in control and other arrangements.
On March 27, 2015, the Company entered into a technology services agreement with Optimal Networks, Inc. (a related company owned by Dr. Joshua Hare’s brother-in-law) for use of information technology services. The Company agreed to issue the related party equity incentive units in the amount equal to 50% of the charges for invoiced services, with such equity to be issued annually on or about the anniversary date of the agreement. During 2017, during the time when the Company was a limited liability company, the Company issued 1,901 Series C Units, and on November 22, 2019, and January 29, 2021, the Company issued 820 and 410 Series C Units, respectively, as payment for an aggregate of $0.2 million of accrued technology services. The Series C units were converted to 16,755 Class A common stock. As of December 31, 2022 and 2021, the Company owed less than $0.1 million, pursuant to this agreement, which is included in accounts payable in the December 31, 2022 and 2021 balance sheets.
We have utilized Global Vision Communications, LLC, a service provider owned by a member of our board and the brother of Dr. Joshua Hare, Mr. Neil Hare, for public relations, information technology and web development services. Payment of invoices for services provided are made in cash or through the issuance of equity as mutually agreed to by the parties. Amounts incurred amounted to approximately $126,000 and $10,000 during the year ended December 31, 2022 and 2021, respectively. As of December 31, 2022 and 2021, the Company owed $0 to the related entity.
We are a licensee under an exclusive license agreement with JMHMD Holdings, LLC, an affiliate of Dr. Hare, for the use of CD271+ cellular therapy technology, a subpopulation of bone marrow-derived MSCs. We are required to pay a royalty of one percent of the annual net sales of the licensed product(s) used, leased, or sold by or for us by any sub-licensees. If we sublicense the technology, we are also required to pay an amount equal to 10% of the net sales of the sub-licensees. The agreement is to remain in effect until either the date all issued patents and filed patent applications have expired or been abandoned, or 20 years after the date of FDA approval of the last commercialized product or process arising from the patent rights, whichever comes later. There were no license fees due as of December 31, 2022 and 2021 pertaining to this agreement. The Company to date has not incurred any royalty or sublicense related expense but has paid $45,000 in license fees ($10,000 per year for 2021, 2020 and 2019) and for a $15,000 extension fee. In addition, the Company paid legal fees of approximately $17,000 and $42,000 for each of the years ended December 31, 2022 and 2021, in connection with the patent prosecution, issuance, and maintenance fees related to CD271+ technology.
We entered into a consulting services agreement with Dr. Hare in November 2014 (the “Agreement”). The Agreement has an initial term of ten (10) years, with automatic renewals thereafter for four (4) year terms unless either party determines not to renew, provides for an initial annual fee structure of $250,000 and eligibility to participate in any incentive compensation programs that are established for the Company. Under the terms of the Agreement, if Dr. Hare’s employment is terminated without Cause (as defined in the Agreement), Dr. Hare is entitled to receive a lump sum payment equal to the sum of (i) annual fees through the date of termination to the extent not previously paid, (ii) annual fees from the date of termination through the end of the Term (as though no termination had occurred), and (iii) any accrued but unpaid expenses. In the event Dr. Hare resigns for Good Reason (as defined in the Agreement), then, subject to executing a release of claims and complying with 12-month non-solicit and non-compete covenants, Dr. Hare would be entitled to receive a lump sum payment equal to the sum of (i) annual fees through the date of termination to the extent not previously paid, (ii) annual fees from the date of termination through the end of the Term (as though no termination had occurred), plus an additional three (3) years, which shall include an annual increase in said fees of ten percent per year for each of the additional three (3) years, and (iii) any accrued but unpaid expenses. If Dr. Hare terminates the Agreement without Good Reason, then he shall receive the sum of (i) annual fees through the date of termination to the extent not previously paid, and (ii) any accrued but unpaid expenses. For purposes of this paragraph, Term is defined in the Agreement as the period commencing on the effective date and continuing through the tenth (10th) anniversary of the effective date. Upon Dr. Hare’s death or disability during the Term of the Agreement, he is entitled to receive any accrued and unremunerated fees or expenses; provided, however, that the Board has the discretion to choose to continue to pay fees for any period of time following a determination of disability.
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Table of Contents
The Agreement acknowledges that Dr. Hare is employed by University of Miami (UM), and remains subject to UM’s policies, and also acknowledges that he serves as a consultant to enumerated outside entities. The Agreement outlines Dr. Hare’s obligations with respect to confidentiality, ownership of information, inventions and original works, contains a non-competition covenant with respect to Dr. Hare’s associations during his time with the Company and for a period of two (2) years thereafter, and contains non-solicitation and non-disparagement obligations.
Under the terms of the Agreement, in calendar year 2022, Dr. Hare was paid $167,000 and received 48,140 immediately vesting Restricted Stock Units, with a grant date fair value of $207,002.
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DILUTION
If you invest in our Class A common stock, your interest will be diluted immediately to the extent of the difference between the public offering price per share of our Class A common stock and the adjusted net tangible book value per share of our Class A common stock after this offering.
Our net tangible book value as of March 31, 2023 was approximately $13,893,000, or approximately $0.66 per share, based on the shares of our Class A common stock and Class B common stock issued and outstanding as of such date. Net tangible book value per share represents the amount of our total tangible assets, excluding goodwill and intangible assets, less total liabilities divided by the total number of shares outstanding.
Dilution per share to new investors represents the difference between the amount per share paid by purchasers for our Class A common stock in this offering and the net tangible book value per share of our Class A common stock immediately following the completion of this offering.
After giving effect to the sale of rights offered by this prospectus at the public offering price of $ per share, after deducting the estimated dealer-manager fees, commissions and our estimated offering expenses, our pro forma net tangible book value as of March 31, 2023 would have been approximately $ or approximately $ per share respectively. This represents an immediate increase in net tangible book value of approximately $ per share to our existing stockholders and an immediate dilution in pro forma net tangible book value of approximately $ per share to purchasers of our Class A common stock in this offering, as illustrated by the following table:
|
Public offering price for one share of Class A common stock
|
|
$
|
|
|
Net tangible book deficit per share as of March 31, 2023
|
|
$
|
( )
|
|
Increase per share attributable to new investors
|
|
$
|
|
|
Pro forma net tangible book value per share as of March 31, 2023 after giving effect to this offering
|
|
$
|
|
|
Dilution per share to new investors
|
|
$
|
|
The discussion of dilution, and the table quantifying it, assume no exercise of any outstanding options or warrants or other potentially dilutive securities. The exercise of potentially dilutive securities having an exercise price less than the offering price would increase the dilutive effect to new investors.
The table above excludes the following potentially dilutive securities as of July 13, 2023:
• 1,271,399 shares issuable upon the exercise of outstanding warrants at a weighted average exercise price as of July 13, 2023 of $17.26 per share. As noted elsewhere in this prospectus, holders of PIPE Warrants also have rights to a downward adjustment in the exercise price for 1,169,288 of these warrants if the deemed subscription price is below the current warrant exercise price.
• 102,754 shares issuable upon the vesting of RSUs under the Company’s 2021 Incentive Award Plan.
• 125,000 shares issuable upon the vesting of PSUs under the Company’s 2021 Incentive Award Plan.
• 401,681 stock options outstanding with an average exercise price as of July 13, 2023 of $6.07 issuable under the Company’s 2021 Incentive Award Plan.
To the extent that any of these RSUs, options or warrants are exercised or the restricted shares vest, these will cause dilution per share to the investors purchasing securities in this offering.
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Table of Contents
CAPITALIZATION
The following table sets forth our cash and cash equivalents and consolidated capitalization as of March 31, 2023 on:
• an historical basis; and
• an as adjusted basis, reflecting the issuance of shares of Class A common stock offered by this prospectus, at $ per share, assuming net proceeds of approximately $ , after offering expenses payable by us.
You should read the following table in conjunction with the sections entitled “Use of Proceeds,” and “Description of Capital Stock” in this prospectus, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our audited financial statements and related notes thereto in our Annual Report on Form 10-K for the year ended December 31, 2022, and our unaudited financial statements and related notes thereto in our Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, which are incorporated by reference into this prospectus. Please read “Where You Can Find More Information” and “Incorporation of Certain Information by Reference”.
|
|
|
As of March 31, 2023
(unaudited)
|
| |
|
Actual
|
|
As Adjusted
|
| |
|
(in thousands, except
per share data)
|
|
Cash and cash equivalents
|
|
|
4,984
|
|
|
$
|
|
|
Marketable securities
|
|
|
8,693
|
|
|
|
|
|
Stockholders’ equity
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value per share, 5,000,000 shares authorized, no shares issued and outstanding at March 31, 2023.
|
|
|
—
|
|
|
|
|
|
Class A Common Stock, $0.001 par value per share, 84,295,000 shares authorized, 6,163,050 shares issued and outstanding at March 31, 2023.
|
|
|
6
|
|
|
|
|
|
Class B Common Stock, $0.001 par value per share, 15,705,000 shares authorized, 14,871,085 shares issued and outstanding at March 31, 2023.
|
|
|
15
|
|
|
|
|
|
Additional paid-in capital
|
|
|
84,116
|
|
|
|
|
|
Stock subscription receivable
|
|
|
(100
|
)
|
|
|
|
|
Accumulated deficit
|
|
|
(67,420
|
)
|
|
|
|
|
Accumulated other comprehensive loss
|
|
|
(299
|
)
|
|
|
|
|
Total stockholders’ equity
|
|
|
16,318
|
|
|
|
|
|
Total capitalization
|
|
$
|
16,318
|
|
|
$
|
|
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Table of Contents
Equity Compensation Plans
Summary equity compensation plan data —
The following table sets forth information, as of June 30, 2023, about our equity compensation plans in effect as of that date:
|
Plan category
|
|
Number of
securities to
be issued upon
exercise of
outstanding
options,
warrants and
rights
(a)
|
|
Weighted-
average
exercise price
of outstanding
options
(b)
|
|
Number of
securities
remaining
available for
future issuance
under equity
compensation
plans (excluding
securities
reflected in
column (a))
(c)
|
|
Equity compensation plans approved by security holders
|
|
629,435
|
|
$
|
6.07
|
|
2,072,525
|
|
Equity compensation plans not approved by security holders
|
|
—
|
|
|
—
|
|
—
|
|
Totals
|
|
629,435
|
|
$
|
6.07
|
|
2,072,525
|
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MARKET FOR COMMON STOCK AND DIVIDEND POLICY
Our common stock is traded on The Nasdaq Capital Market under the symbol “LGVN.” As of July 13, 2023, the last reported sale price of the common stock as reported on Nasdaq was $3.35 per share. As of July 13, 2023, there were approximately 14 holders of record of Class A common stock and 12 holders of record of Class B common stock. The actual number of stockholders is greater than this number of record holders and includes stockholders who are beneficial owners but whose shares are held in street name by brokers and other nominees.
Transfer Agent and Registrar
The Transfer Agent and registrar for our Class A common stock and Class B common stock is Colonial Stock Transfer Company, Inc.
Dividends
We have never declared nor paid any cash dividends, and currently intend to retain all our cash and any earnings for use in our business and, therefore, do not anticipate paying any cash dividends in the foreseeable future. Any future determination to pay cash dividends will be at the discretion of the Board of Directors and will be dependent upon our consolidated financial condition, results of operations, capital requirements and such other factors as the Board of Directors deems relevant.
Lock-Up and Market Standoff Agreements
All of our directors and executive officers will be subject to lock-up agreements or market standoff provisions that, subject to certain exceptions, prohibit them from directly or indirectly offering, pledging, selling, contracting to sell, selling any option or contract to purchase, purchasing any option or contract to purchase, granting any option, right or warrant to purchase or otherwise transferring or disposing of any shares of our Class A common stock or Class B common stock, options to acquire shares of our Class A common stock or any securities convertible into or exercisable or exchangeable for Class A common stock, whether now owned or hereafter acquired, or entering into any swap or any other agreement or any transaction that transfer, in whole or in part, directly or indirectly, the economic consequence of ownership, for a period expiring 14 days following the expiration of the Rights Offering (including any extensions), without the express prior written consent of the dealer-manager. Notwithstanding the foregoing, such restrictions and limitations shall not apply to any transfers, sales or assignments by directors and executive officers with respect to the Subscription Rights held by them that are issued pursuant to the Rights Offering.
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DESCRIPTION OF COMMON STOCK
General
Our authorized capital stock consists of (i) 84,295,000 shares of Class A common stock, par value $0.001 per share, (ii) 15,705,000 shares of Class B common stock, par value $0.001 per share and (iii) 5,000,000 shares of preferred stock, par value $0.001 per share.
Common Stock
We have two classes of authorized common stock, Class A common stock and Class B common stock. The rights of the holders of Class A common stock and Class B common stock are identical, except with respect to voting and conversion.
Voting. Holders of our Class A common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and holders of our Class B common stock are entitled to five votes for each share of Class B common stock held on all matters submitted to a vote of stockholders. Holders of shares of our Class A common stock and Class B common stock vote together as a single class on all matters (including the election of directors) submitted to a vote of stockholders, unless otherwise required by Delaware law or our Certificate of Incorporation. Delaware law could require either holders of our Class A common stock or Class B common stock to vote separately as a single class in the following circumstances:
(1) if we were to seek to amend our Certificate of Incorporation to increase or decrease the par value of a class of our capital stock, then that class would be required to vote separately to approve the proposed amendment; and
(2) if we were to seek to amend our Certificate of Incorporation in a manner that alters or changes the powers, preferences, or special rights of a class of our capital stock in a manner that affected its holders adversely, then that class would be required to vote separately to approve the proposed amendment.
Our Certificate of Incorporation does not provide for cumulative voting for the election of directors. As a result, the holders of a majority of the voting power of our outstanding capital stock can elect all of the directors then standing for election. Our Certificate of Incorporation establishes a classified board of directors, divided into three classes with staggered three-year terms. Only one class of directors will be elected at each annual meeting of our stockholders, with the other classes continuing for the remainder of their respective three-year terms. An election of directors by our stockholders is determined by a plurality of the votes cast by the stockholders entitled to vote on the election. Subject to the supermajority votes for some matters, other matters shall be decided by the affirmative vote of our stockholders having a majority in voting power of the votes cast by the stockholders present or represented and voting on such matter. Our Certificate of Incorporation and Bylaws also provide that our directors may be removed only for cause and only by the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock entitled to vote thereon. In addition, the affirmative vote of the holders of at least two-thirds in voting power of the outstanding shares of capital stock entitled to vote thereon is required to amend or repeal, or to adopt any provision inconsistent with, several of the provisions of our Certificate of Incorporation. See “— Anti-Takeover Provisions — Amendment of Charter Provisions” below.
Dividends. Holders of common stock are entitled to receive proportionately any dividends as may be declared by our Board of Directors, subject to any preferential dividend rights of any series of preferred stock that we may designate and issue in the future.
Liquidation. In the event of our liquidation or dissolution, the holders of our Class A common stock and Class B common stock will be entitled to receive proportionately our net assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock. Holders of our common stock have no preemptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common stock will be subject to and may be adversely affected by the rights of the holders of shares of any series of preferred stock that we may designate and issue in the future.
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Change of Control Transactions. In the case of any distribution or payment in respect of the shares of our Class A common stock or Class B common stock upon a merger or consolidation with or into any other entity, or other substantially similar transaction, the holders of our Class A common stock and Class B common stock will be treated equally and identically with respect to shares of Class A common stock or Class B common stock owned by them; provided, however, shares of each class may receive, or have the right to elect to receive, different or disproportionate consideration if the only difference in the per share consideration is that the shares to be distributed to a holder of a share Class B common stock have five times the voting power of any securities distributed to a holder of a share of Class A common stock.
Subdivisions and Combinations. If we subdivide or combine in any manner outstanding shares of Class A common stock or Class B common stock, the outstanding shares of the other class will be subdivided or combined in the same manner, unless different treatment of the shares of each class is approved by the affirmative vote of the holders of a majority of the outstanding shares of Class A common stock and Class B common stock, each voting as a separate class.
Conversion. Each outstanding share of Class B common stock is convertible at any time at the option of the holder into one share of Class A common stock. In addition, each share of Class B common stock will convert automatically into one share of Class A common stock upon any transfer, whether or not for value, except for certain permitted transfers described in our Certificate of Incorporation, including transfers to family members, trusts solely for the benefit of the stockholder or their family members, distributions or transfers of shares out to owners of a stockholder, or to partnerships, corporations, and other entities exclusively owned by the stockholder or their family members, as well as affiliates, subject to certain exceptions. Once converted or transferred and converted into Class A common stock, the Class B common stock may not be reissued.
Rights and Preferences. Holders of our common stock have no preemptive, conversion or Subscription Rights, and there are no redemption or sinking funds provisions applicable to our common stock. The rights, preferences and privileges of the holders of our common stock will be subject to, and may be adversely affected by, the rights of the holders of shares of any series of our preferred stock that we may designate and issue in the future.
Fully Paid and Nonassessable. All of our outstanding shares of Class A common stock and Class B common stock are fully paid and nonassessable.
Outstanding Warrants
As of July 13, 2023, we had 1,271,399 shares of Class A common stock issuable upon exercise of outstanding common stock warrants, at a weighted average exercise price of $ 17.26 per share.
Common Stock Warrants Issued to Participants in February 2021 IPO
Pursuant to our IPO in February 2021, the underwriter received warrants to purchase 106,400 shares of Class A common stock shares (the “IPO Underwriter Warrants”). The IPO Underwriter Warrants are exercisable at any time and from time to time, in whole or in part, during the four and a half-year period commencing August 12, 2021, at a price of $12.00 per share. During 2021, the underwriters assigned 95,760 of the IPO Underwriter Warrants to employees. As of March 31, 2023, 51,061 of the IPO Underwriter Warrants have been exercised, which provided net proceeds to the Company of $0.6 million.
Common Stock Warrants Issued to Participants in December 2021 Offering
On December 3, 2021, the Company completed a private placement with several investors, wherein a total of 1,169,288 shares of the Company’s Class A common stock were issued at a purchase price of $17.50 per share, with each investor also receiving a warrant to purchase up to a number of shares of Class A common stock equal to the number of shares of Class A common stock purchased by such investor in the private placement, at an exercise price of $17.50 per share (the “Purchaser Warrants”), for a total purchase price of approximately $20.5 million (the “2021 PIPE Offering”). The Purchaser Warrants are immediately exercisable, expire five years from the date of issuance and have certain downward pricing adjustment mechanisms, subject to a floor, as set forth in greater detail therein and below. In addition, the Company granted the warrants to the Placement Agent for the 2021 PIPE Offering, under similar terms, to purchase 46,722 shares of Class A common stock at an exercise price of $17.50 per share (the “Representative Warrants” and, together with the Purchaser Warrants, the “PIPE Warrants”).The PIPE
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Warrants have an initial exercise price of $17.50 per share. The Purchaser Warrants contain a downward pricing adjustment mechanism, which will be triggered by the Rights Offering if the deemed subscription price of each share is below the current exercise price of the Purchaser Warrants. If triggered, the adjustment mechanism will reduce the exercise price of the Purchaser Warrants to the higher of (i) the subscription price of each share and (ii) $5.25. The Representative Warrants do not contain such a downward pricing adjustment mechanism. The PIPE Warrants are currently exercisable at any time and from time to time, in whole or in part, and will expire on December 3, 2026, the fifth anniversary of the original issuance date.
General Terms of the IPO Warrants and the PIPE Warrants
Adjustment. For so long as the IPO Warrants and the PIPE Warrants (together, the “warrants”) remain outstanding and notwithstanding any prior adjustments, the exercise price and number of shares of Class A common stock issuable upon exercise of the warrant is subject to adjustment as follows: (a) with respect to the Purchaser Warrants, as the Company’s Board of Directors deems appropriate (subject to the prior written consent of the warrant holder), (b) upon (i) payment of a stock dividend or other distribution or distributions on shares of its common stock or any securities which would entitle the holder thereof to acquire shares the Company’s common stock at any time (referred to as “common stock equivalents”), (ii) subdivision (by stock spilt, stock dividend, recapitalization, or otherwise) of shares of common stock, (iii) combination (by reverse stock split or otherwise) of shares of common stock, or (iv) reclassification of shares of common stock, and (c) with respect to the Purchaser Warrants, upon the issuance or announcement of contemplated issuance of shares of common stock or common stock equivalents for consideration per share less than the exercise price of the Purchaser Warrants (a “Dilutive Issuance”), except for certain exempt issuances as set forth therein. The Rights Offering is a Dilutive Issuance, which will cause a downward adjustment to the initial exercise price of the Purchaser Warrants.
Rights upon Distribution of Assets. With respect to the PIPE Warrants, in the event that the Company declares or makes any dividend or other distribution of its assets to holders of its common stock, the warrant holder will be entitled to participate in such distribution to the same extent that such holder would have participated therein if the holder had held the number of shares of common stock acquirable upon exercise of the PIPE Warrant. The IPO Underwriter Warrants do not contain such dividend or distribution rights.
Fundamental Transaction. In the event of a fundamental transaction, as described in the PIPE Warrants and generally including the sale, transfer or other disposition of all or substantially all of our assets, our consolidation or merger with or into another person or reorganization, recapitalization or reclassification or the acquisition of our outstanding common stock which results in any person or group becoming the beneficial owner of 50% of our outstanding shares of common stock, the holders of the PIPE Warrants will be entitled to receive upon exercise of the PIPE Warrants the kind and amount of securities, cash, assets or other property that the holders would have received had they exercised the PIPE Warrants immediately prior to such fundamental transaction. Upon the occurrence of any such fundamental transaction, the successor entity shall succeed to, and be substituted for, and may exercise every right and power of the Company and shall assume all of the obligations of the Company under the PIPE Warrants. The IPO Underwriter Warrants do not contain such rights.
Purchase Right. With respect to the PIPE Warrants, any time that the Company grants, issues, or sells any securities pro rata to all of the record holders of the Common Stock (the “Purchase Right”), the holder of the PIPE Warrant will be entitled to acquire the aggregate Purchase Rights which the holder could have acquired if the holder had held the number of shares of common stock acquirable upon exercise of the PIPE Warrant. The IPO Underwriter Warrants do not contain such rights.
Transferability. Subject to applicable laws and restrictions on transfer (and a 180-day waiting period from the effective date with respect to the IPO Underwriter Warrants), the warrants may be transferred at the option of the holder. The warrants are not listed on any securities exchange or nationally recognized trading system.
Exercisability. The warrants will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed notice of exercise or exercise form accompanied by payment in full for the number of shares of our common stock purchased upon such exercise. If, at the time a holder exercises its warrant, a registration statement registering the issuance of the shares of common stock underlying the warrants under the Securities Act of 1933, as amended (the “Securities Act”) is not then effective or available and an exemption from registration under
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the Securities Act is not available for the issuance of such shares, then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of shares of common stock determined according to a formula set forth in the warrant.
Limitations on Exercise. With respect to the PIPE Warrants, a holder (together with its affiliates) may not exercise any portion of the PIPE Warrant to the extent that the holder would own more than 4.99% (or 9.99%, at the election of the warrant holder) of the outstanding common stock after exercise, except that upon at least 61 days’ prior notice from the holder to us, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s warrants up to 9.99% of the number of shares of our common stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the PIPE Warrants.
No Fractional Shares. No fractional shares of common stock will be issued in connection with the exercise of a warrant. In lieu of fractional shares, we will (i) round up or down to the next whole share, in the case of the IPO Underwriter Warrants, or (ii) either pay a cash adjustment in respect of such fractional amount or round up to the next whole share, in the case of the PIPE Warrants.
Rights as a Stockholder. Except as otherwise provided in the warrants or by virtue of such holder’s ownership of shares of our common stock, the holders of the warrants do not have the rights or privileges of holders of our common stock, including any voting rights, unless and until they exercise their warrants.
Waivers and Amendments. Subject to certain exceptions, any term of the warrants may be amended, modified or waived with our written consent and the written consent of the holder of such warrant.
Failure to Timely Deliver Securities. With respect to the PIPE Warrants, upon exercise of the PIPE Warrant by the holder, if the Company or its Transfer Agent fails to deliver the securities to holder by the required share delivery date set forth in the PIPE Warrant, or if the Company did not provide the required notice to holder that a registration statement covering the issuance of the warrant shares subject to the exercise notice is not available and the Company is unable to deliver the securities without any restrictive legend, then generally, the holder may rescind the exercise in whole or in part or may require the Company to pay to the holder an amount in cash to make the investor whole in connection with the Company’s failure to timely deliver securities.
Preferred Stock
Under our Certificate of Incorporation, our Board of Directors is authorized to direct us to issue shares of preferred stock in one or more series without stockholder approval. Our Board of Directors has the discretion to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.
The purpose of authorizing our Board of Directors to issue preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings and other corporate purposes, could have the effect of making it more difficult for a third-party to acquire, or could discourage a third-party from seeking to acquire, a majority of our outstanding voting stock. There are no shares of preferred stock currently outstanding, and we have no present plans to issue any shares of preferred stock.
Anti-Takeover Provisions
Some provisions of Delaware law and our Certificate of Incorporation and Bylaws could make the following transactions more difficult: an acquisition of us by means of a tender offer; an acquisition of us by means of a proxy contest or otherwise; or the removal of our incumbent officers and directors. It is possible that these provisions could make it more difficult to accomplish or could deter transactions that stockholders may otherwise consider to be in their best interests or in our best interests, including transactions that provide for payment of a premium over the market price for our shares.
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These provisions, summarized below, are intended to discourage coercive takeover practices and inadequate takeover bids. These provisions are also designed to encourage persons seeking to acquire control of us to first negotiate with our Board of Directors. We believe that the benefits of the increased protection of our potential ability to negotiate with the proponent of an unfriendly or unsolicited proposal to acquire or restructure us outweigh the disadvantages of discouraging these proposals because negotiation of these proposals could result in an improvement of their terms.
Undesignated Preferred Stock. The ability of our Board of Directors, without action by our stockholders, to issue up to 5,000,000 shares of undesignated preferred stock with voting or other rights or preferences as designated by our Board of Directors could impede the success of any attempt to effect a change in control of our company. These and other provisions may have the effect of deterring hostile takeovers or delaying changes in control or management of our company.
Dual Class Stock. As described above in “— Common Stock — Voting,” our Certificate of Incorporation provides for a dual class common stock structure, which provides holders of our Class B common stock with significant influence over matters requiring stockholder approval, including the election of directors and significant corporate transactions, such as a merger or other sale of our company or its assets.
Stockholder Meetings. Our Bylaws provide that a special meeting of stockholders may be called only by the chairman of our Board of Directors, our chief executive officer or president (in the absence of a chief executive officer), or by a resolution adopted by a majority of our Board of Directors.
Requirements for Advance Notification of Stockholder Nominations and Proposals. Our Bylaws include advance notice procedures with respect to stockholder proposals to be brought before a stockholder meeting and the nomination of candidates for election as directors, other than nominations made by or at the direction of our Board of Directors or a committee of our Board of Directors.
Elimination of Stockholder Action by Written Consent. Any action to be taken by our stockholders must be effected at a duly called annual or special meeting of stockholders and may not be taken by written consent.
Staggered Board. Our Board of Directors is divided into three classes. The directors in each class serve a three-year term, with one class being elected each year by our stockholders. This system of electing and removing directors may tend to discourage a third party from making a tender offer or otherwise attempting to obtain control of us, because it generally makes it more difficult for stockholders to replace a majority of the directors.
Removal of Directors. Our Certificate of Incorporation provides that no member of our Board of Directors may be removed from office by our stockholders except for cause and, in addition to any other vote required by law, upon the approval of the holders of at least two-thirds in voting power of the outstanding shares of stock entitled to vote in the election of directors.
Stockholders Not Entitled to Cumulative Voting. Our Certificate of Incorporation does not permit stockholders to cumulate their votes in the election of directors. Accordingly, the holders of a majority of the outstanding shares of our common stock entitled to vote in any election of directors are able to elect all of the directors standing for election, if they choose. Further, as discussed above, holders of our Class B common stock are entitled to five votes for each share of Class B common stock held by them, including with respect to election of directors.
Choice of Forum. Our Certificate of Incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for (1) any derivative action or proceeding brought on our behalf, (2) any action asserting a claim of breach of a fiduciary duty or other wrongdoing by any of our directors, officers, employees or agents to us or our stockholders, (3) any action asserting a claim against us arising pursuant to any provision of the DGCL or as to which the DGCL confers jurisdiction on the Court of Chancery of the State of Delaware, (4) any action to interpret, apply, enforce or determine the validity of our Certificate of Incorporation or Bylaws, or (5) any action asserting a claim governed by the internal affairs doctrine. Under our Certificate of Incorporation, this exclusive form provision will not apply to claims which are vested in the exclusive jurisdiction of a court or forum other than the Court of Chancery of the State of Delaware, or for which the Court of Chancery of the State of Delaware does not have subject matter jurisdiction. For instance, the provision would not apply to actions arising under federal securities laws, including suits brought to enforce any liability or duty created by the Securities Act, the Exchange Act, or the rules and regulations thereunder.
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Our Certificate of Incorporation further provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act. Our Certificate of Incorporation also provides that any person or entity holding, purchasing or otherwise acquiring any interest in shares of our capital stock will be deemed to have notice of and to have consented to these choice of forum provisions. It is possible that a court of law could rule that the choice of forum provision contained in our Certificate of Incorporation are inapplicable or unenforceable if they are challenged in a proceeding or otherwise.
Amendment of Charter Provisions. The amendment of any of the above provisions, except for the provision making it possible for our Board of Directors to issue preferred stock and the provision prohibiting cumulative voting, would require approval by holders of at least two-thirds in voting power of the outstanding shares of stock entitled to vote thereon.
The provisions of Delaware law, and our Certificate of Incorporation and Bylaws, could have the effect of discouraging others from attempting hostile takeovers and, as a consequence, they may also inhibit temporary fluctuations in the market price of our Class A common stock that often result from actual or rumored hostile takeover attempts. These provisions may also have the effect of preventing changes in the composition of our board and management. It is possible that these provisions could make it more difficult to accomplish transactions that stockholders may otherwise deem to be in their best interests.
Section 203 of the Delaware General Corporation Law. We are subject to Section 203 of the DGCL, which prohibits persons deemed to be “interested stockholders” from engaging in a “business combination” with a publicly held Delaware corporation for three years following the date these persons become interested stockholders unless the business combination is, or the transaction in which the person became an interested stockholder was, approved in a prescribed manner or another prescribed exception applies. Generally, an “interested stockholder” is a person who, together with affiliates and associates, owns, or within three years prior to the determination of interested stockholder status did own, 15% or more of a corporation’s voting stock. Generally, a “business combination” includes a merger, asset or stock sale, or other transaction resulting in a financial benefit to the interested stockholder. The existence of this provision may have an anti-takeover effect with respect to transactions not approved in advance by our Board of Directors.
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MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES
The following is a discussion of the material U.S. federal income tax consequences of the ownership and disposition of the shares of our Class A common stock upon exercise of the Subscription Rights. This discussion is based upon the tax laws of the United States including the Internal Revenue Code of 1986, as amended to the date hereof, administrative pronouncements, judicial decisions and final, temporary and proposed Treasury regulations, as of the date hereof. These laws are subject to change, possibly with retroactive effect. The discussion does not address any state, local or non-U.S. tax consequences. We have not sought, and will not seek, any rulings from the IRS, regarding the matters discussed below. There can be no assurance that the IRS or a court (if the matter were contested) will not take positions concerning the tax consequences of the receipt of Subscription Rights acquired through the Rights Offering by persons holding shares of our stock, the exercise (or expiration) of the Subscription Rights, the acquisition, ownership and disposition of shares of our Class A common stock that are different from those discussed below.
The immediately following discussion applies only to U.S. Holders. For purposes of this discussion, a “U.S. Holder” is a holder of our stock that is, for U.S. federal income tax purposes: (i) a citizen or resident of the United States; (ii) a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the United States or any political subdivision thereof; (iii) an estate the income of which is subject to U.S. federal income taxation regardless of its source; or (iv) a trust if (x) a U.S. court is able to exercise primary supervision over the administration of the trust and one or more “United States persons” (within the meaning of the Code) have the authority to control all substantial decisions of the trust or (y) has a valid election in effect under applicable Treasury regulations to be treated as a United States person.
This discussion applies only to U.S. Holders that hold their Class A common stock received upon exercise of the subscription privilege or the over-subscription privilege as a capital asset for tax purposes. It does not describe any tax consequences arising out of the tax laws of any state, local or foreign jurisdiction, or any U.S. federal tax consequences other than income taxation (such as estate or gift taxation).
This discussion does not address all aspects of U.S. federal income taxation that may be applicable to holders in light of their particular circumstances or to holders subject to special treatment under the U.S. federal income tax laws, including, but not limited to, financial institutions, brokers and dealers in securities or currencies, insurance companies, regulated investment companies, real estate investment trusts, tax-exempt organizations, persons who hold their shares as part of a straddle, hedge, conversion or other risk-reduction transaction, persons liable for the alternative minimum tax, persons who have received their stock pursuant to which the Subscription Rights in the Rights Offering have been granted through the exercise of employee stock options or otherwise as compensation for services, partnerships or other entities treated as partnerships for U.S. federal income tax purposes, U.S. expatriates, and persons whose functional currency is not the U.S. dollar and foreign taxpayers. This discussion does not address U.S. holders which beneficially hold our shares through either a “foreign financial institution” (as such term is defined in Section 1471(d)(4) of the Code) or certain other non-U.S. entities specified in Section 1472 of the Code.
If a partnership (including any entity treated as a partnership for U.S. federal income tax purposes) receives the Subscription Rights or holds the Class A common stock received upon exercise of the subscription privilege or the over-subscription privilege, the tax treatment of a partner in a partnership generally will depend upon the status of the partner and the activities of the partnership. Such a partner or partnership should consult its own tax advisor as to the U.S. federal income tax consequences of the receipt and ownership of the Subscription Rights or the ownership of the Class A common stock received upon exercise of the Subscription Rights or, if applicable, upon exercise of the over-subscription privilege.
Based on the facts and subject to the limitations set forth herein, the statements of law or legal conclusions set forth in this discussion constitute the opinion of Buchanan Ingersoll & Rooney PC, our tax counsel, as to the material United States federal income tax consequences to U.S. Holders of the Rights Offering.
Holders of common stock are urged to consult their own tax advisors as to the specific tax consequences of the rights offering to them, including the applicable federal, state, local and foreign tax consequences of the rights offering to them and the effect of possible changes in tax laws.
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TAX CONSEQUENCES TO U.S. HOLDERS
Tax consequences of the Receipt of Subscription Rights by Common Stockholders
For the reasons set forth below, the company’s tax counsel has reached an opinion that the distribution of the Subscription Rights to the common stockholders should be non-taxable to the common stockholders, but counsel is unable to opine conclusively that such distribution will be nontaxable.
As a general rule under Section 305(a) of the Code, the distribution of stock (including rights to acquire stock) by a corporation to its Class A common stockholders with respect their stock is not taxable to such stockholders.
Section 305(b) of the Code contains a number of exceptions to the general rule set forth in Section 305(a). If a distribution of stock or rights to acquire stock falls within one of these exceptions, the distribution may be taxable to the stockholders in the manner set forth below.
Section 305(b)(2) provides that Section 305(a) does not apply to a “disproportionate distribution,” and such distributions are therefore taxable. A “disproportionate distribution” is a distribution (or a series of distributions) that results in (i) the receipt of property by some stockholders, and (ii) an increase in the proportionate interest of other stockholders in the assets or earnings and profits of the distributing corporation. (Under Section 317(a), the term “property” means money, securities and any other property, but the term does not include stock in the corporation making the distribution or rights to acquire such stock). Treasury Regulation 1.305-3(b)(5) provides that, for purposes of determining whether a distribution or a series of distributions has the result of a disproportionate distribution, there shall be treated as outstanding stock of the distributing corporation any right to acquire such stock (whether or not exercisable during the taxable year), and (ii) any security convertible into stock of the distributing corporation (whether or not convertible during the taxable year). Treasury Regulation 1.305-3(b)(6) provides that, in cases where there is more than one class of stock outstanding, each class of stock is to be considered separately in determining whether a shareholder has increased his proportionate interest in the assets or earnings and profits of a corporation. The individual shareholders of a class of stock will be deemed to have an increased interest if the class of stock as a whole has an increased interest in the corporation. A “series of distributions” encompasses all distributions (whether or not pursuant to a plan) made or deemed made by a corporation which have the result of the receipt of cash or property by some stockholders and an increase in the proportionate interests of other stockholders. Under Treasury Regulation 1.305-3(b)(4), the receipt of cash or property within 36 months (before or after) the distribution of stock or stock rights may be taken into account in determining whether a disproportionate distribution has occurred. (Receipts of cash or property outside of this 72-month window are not taken into account unless made pursuant to a plan.)
In the rights distribution, the stockholders are not receiving cash or property (since the term “property” does not include stock in the corporation or the right to acquire stock). They are receiving only the right to acquire additional Class A common stock in the company. Moreover, the company has not made any other distributions of cash, stock, stock rights or other property to stockholders during the previous 36 months. However, while we have not made any distributions of cash or property on our stock during the last 36 months, if we were to make a distribution in cash or other property on our stock within the 36 month period following the distribution of the Subscription Rights, such distribution could cause the receipt of the Subscription Rights to be treated as part of a disproportionate distribution. In addition, the company has options, warrants and convertible debt outstanding, all of which may be treated as stock for purposes of determining whether there has been a disproportionate distribution. Under certain circumstances impossible to predict (such as a failure to properly adjust an option price in connection with a stock distribution), the existence of these stock rights could cause the receipt of Subscription Rights pursuant to this offering to be part of a disproportionate distribution, as contemplated in Code Section 305(b)(2). We further note that there is a general lack of authority directly addressing the application of Section 305 of the Code to rights offerings.
Given the general lack of authority and the uncertainty of the potential effect that future actions could have on the tax treatment of the distribution of the current Subscription Rights to common stockholders, and the existence of other stock rights, our tax counsel is unable to definitively opine that such distribution will be nontaxable, but it has reached an opinion that such distribution should be non-taxable to the common stockholders. Based on the opinion of tax counsel, we will take the position that the Subscription Rights issued to the common stockholders pursuant to the Rights Offering are not part of a disproportionate distribution and that the distribution of the Subscription Rights is not a taxable event to the common stockholders. If this position were finally determined by the IRS or a court to
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be incorrect, whether on the basis that the issuance of the Subscription Rights is a “disproportionate distribution” or otherwise, the fair market value of the Subscription Rights would be taxable to U.S. Holders in the manner described under “— Alternative Treatment of Subscription Rights if the Rights Offering is Considered Taxable”
Other Tax Consequences to U.S. Holders Assuming the Rights Offering is Considered Non-Taxable
If on the date that the Subscription Rights are received by a U.S. Holder the fair market value of the Subscription Rights received is less than 15% of the fair market value of the holder’s existing shares of stock (with respect to which the Subscription Rights are distributed), the Subscription Rights will be allocated a zero dollar basis for U.S. federal income tax purposes, unless the U.S. Holder elects to allocate its basis in its existing shares of stock between its existing shares of stock and the Subscription Rights in proportion to the relative fair market values of the existing shares of stock and the Subscription Rights, determined on the date of receipt of the Subscription Rights. If a U.S. Holder chooses to allocate basis between its existing shares and the Subscription Rights, it must make this election on a statement included with a timely filed tax return (including extensions) for the taxable year in which the Subscription Rights are received. Such an election is irrevocable. Holders should consult their own tax counsel about making this election.
However, if the fair market value of the Subscription Rights received is 15% or more of the fair market value of the holder’s existing shares of stock on the date that the Subscription Rights are received, then the holder must allocate its basis in its existing shares of stock between those shares and the Subscription Rights received in proportion to their fair market values determined on the date of receipt of the Subscription Rights.
The fair market value of the Subscription Rights on the date that the Subscription Rights are distributed is uncertain, and we have not obtained, and do not intend to obtain, an appraisal of the fair market value of the Subscription Rights on that date. In determining the fair market value of the Subscription Rights, a U.S. Holder should consider all relevant facts and circumstances, including any difference between the subscription price of the Subscription Rights and the trading price of our shares of Class A common stock on the date that the Subscription Rights are distributed, the length of the period during which the Subscription Rights may be exercised and the fact that the Subscription Rights are transferable.
Exercise of Subscription Rights
A U.S. Holder will not recognize gain or loss upon the exercise of a Subscription Right received in the Rights Offering. See, e.g., Rev. Rul. 72-265. The holder’s adjusted tax basis, if any, in the Subscription Right (as described above) plus the subscription price, will be the holder’s basis in the Class A common stock acquired upon exercise of the Subscription Right.
Under Code section 1223(5) the holding period of shares of Class A common stock acquired upon exercise of a Subscription Right will begin on the date of exercise.
If a U.S. Holder exercises a Subscription Right after disposing of the shares of our stock with respect to which such Subscription Right was received, then certain aspects of the tax treatment of the exercise of the Subscription Right are unclear, including (1) the allocation of tax basis between the shares of stock previously sold and the Subscription Right, (2) the impact of such allocation on the amount and timing of gain or loss recognized with respect to the shares of our stock previously sold and (3) the impact of such allocation on the tax basis of the shares of our Class A common stock acquired upon exercise of the Subscription Right. A U.S. Holder who exercises a Subscription Right received in the Rights Offering after disposing of shares of our stock with respect to which the Subscription Right is received should consult its own tax advisor.
Expiration of Subscription Rights
If a U.S. Holder allows Subscription Rights received in the Rights Offering to expire, it will not recognize any gain or loss for U.S. federal income tax purposes with respect to the rights. The holder should re-allocate to its existing stock any portion of the tax basis in its existing stock that was previously allocated to the Subscription Rights.
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Alternative Treatment of Subscription Rights if the Rights Distribution is Considered Taxable
If the IRS were to successfully assert that the distribution of the Subscription Rights in the Rights Offering resulted in a “disproportionate” distribution (or was otherwise taxable pursuant to Section 305(b)) each U.S. Holder would be considered to have received a distribution with respect to such holder’s stock in an amount equal to the fair market value, on the date of distribution, of the Subscription Rights received. This distribution generally would be taxed as a dividend distribution to the extent of the holder’s ratable share of our current and accumulated earnings and profits. The amount of any distribution in excess of our earnings and profits would be applied to reduce (but not below zero) the holder’s tax basis in its stock, and any remaining excess generally would be taxable as capital gain (long-term, if the holder’s holding period with respect to its capital stock is more than one year as of the date of distribution, otherwise short-term).
Tax basis and holding period
The holder’s tax basis in the Subscription Rights received pursuant to a taxable Rights Offering would be equal to the fair market value of the Subscription Rights on the date of distribution. The holding period for the Subscription Rights would begin upon receipt.
Expiration of the rights
If the receipt of Subscription Rights pursuant to this offering is taxable, and a U.S. Holder allows the Subscription Rights received in this offering to expire, then such U.S. Holder should recognize a short-term capital loss equal to such U.S. Holder’s tax basis in the expired Subscription Rights. A U.S. Holder’s ability to use any capital loss may be subject to limitations.
If the Subscription Rights expire without exercise after the holder has disposed of all or a portion of its shares of stock, the holder should consult its own tax advisor regarding the ability to recognize a loss (if any) on the expiration of the Subscription Rights.
Exercise of the Subscription Rights; Tax Basis and Holding Period of the Shares
The exercise of taxable Subscription Rights by a holder will not be a taxable transaction for U.S. federal income tax purposes. Accordingly, the holder’s tax basis in the shares acquired upon exercise of the Subscription Rights will equal the sum of the price paid for the shares and the holder’s tax basis (as determined above), if any, in the Subscription Rights exercised. The holding period of the shares will begin on the day the Subscription Rights are exercised.
Tax Consequences of Owning and Disposing of Class A common stock Acquired Through the Exercise of the Subscription Rights (Common Stockholders)
The following discussion applies to the Class A common stock acquired by U.S. Holders following the exercise of their Subscription Rights.
Distributions
Distributions with respect to the shares of our Class A common stock that are acquired upon exercise of Subscription Rights will be taxable as dividend income, when actually or constructively received, to the extent of our current or accumulated earnings and profits as determined for U.S. federal income tax purposes. If the amount of a distribution exceeds our current and accumulated earnings and profits, the excess will be treated first as a tax-free return of capital to the extent of the U.S. Holder’s adjusted tax basis in its shares of our Class A common stock, and thereafter as capital gain.
Distributions received by certain non-corporate U.S. holders with respect to shares of our Class A common stock generally will be “qualified dividends” subject to preferential rates of U.S. federal income tax, provided that the U.S. holder meets applicable holding period and other requirements. Subject to similar exceptions for short-term and hedged positions, dividend income on our shares of Class A common stock paid to U.S. Holders that are domestic corporations generally will qualify for the dividends-received deduction.
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Dispositions
If a U.S. Holder sells or otherwise disposes of, in a taxable transaction, shares of Class A common stock acquired upon exercise of Subscription Rights, it will recognize capital gain or loss equal to the difference between the amount realized and its adjusted tax basis in the shares. Such capital gain or loss will be long-term capital gain or loss if the holder’s holding period for such shares is more than one year at the time of disposition. Long-term capital gain of a non-corporate U.S. Holder is generally taxed at preferential tax rates. The deductibility of capital losses is subject to limitations.
Additional Medicare Tax on Net Investment Income
An additional 3.8% tax (the so-called “Medicare Tax”) will be imposed on the “net investment income” of certain U.S. citizens and resident aliens, and on the undistributed “net investment income” of certain estates and trusts, with Modified Adjusted Gross Income in excess of threshold amounts. Among other items, “net investment income” generally includes gross income from dividends and net gain from the disposition of property, such as our capital stock, less certain deductions. U.S. Holders should consult their tax advisor about the Medicare tax.
Information Reporting and Backup Withholding
U.S. Holders may be subject to information reporting and/or backup withholding with respect to the gross proceeds from the disposition of shares of our Class A common stock acquired through the exercise of Subscription Rights. Backup withholding (at the then applicable rate) may apply if the U.S. Holder (1) fails to furnish a social security or other taxpayer identification number (“TIN”), (2) furnishes an incorrect TIN, (3) fails to report interest or dividends properly or (4) fails to provide a certified statement on IRS Form W-9, signed under penalty of perjury, that the TIN provided is correct, that it is not subject to backup withholding and that it is a U.S. person for U.S. federal income tax purposes. Any amount withheld from a payment under the backup withholding rules is allowable as a credit against (and may entitle the U.S. Holder to a refund with respect to) its U.S. federal income tax liability, provided that the required information is timely furnished to the IRS. Certain persons are exempt from information reporting and backup withholding, including corporations and certain financial institutions, provided that they demonstrate their exempt status if requested. U.S. Holders are urged to consult their own tax advisor as to their qualification for exemption from backup withholding and the procedure for obtaining such exemption.
THE PRECEDING DISCUSSION OF MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES IS NOT TAX ADVICE. HOLDERS OF SUBSCRIPTION RIGHTS TO SHARES OF OUR CLASS A COMMON STOCK SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF THE U.S. FEDERAL INCOME TAX LAWS TO THEIR PARTICULAR SITUATIONS AND THE CONSEQUENCES, UNDER FEDERAL ESTATE AND GIFT TAX LAWS, FOREIGN, STATE AND LOCAL LAWS AND TAX TREATIES, OF THE RECEIPT, OWNERSHIP AND EXERCISE OF SUBSCRIPTION RIGHTS AND THE ACQUISITION, OWNERSHIP AND DISPOSITION OF SHARES.
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TAX CONSEQUENCES TO NON-U.S. HOLDERS
WE ARE NOT PROVIDING ANY INFORMATION AS TO TAX CONSEQUENCES FOR NON-U.S. PERSONS AS A RESULT OF THIS OFFERING. HOLDERS OF SUBSCRIPTION RIGHTS TO SHARES OF OUR CLASS A COMMON STOCK SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE APPLICATION OF THE TAX LAWS OF THEIR PARTICULAR JURISDICTIONS AND SITUATIONS AND THE CONSEQUENCES, UNDER ESTATE AND GIFT TAX LAWS, FOREIGN, OTHER LAWS AND TAX TREATIES, OF THE RECEIPT, OWNERSHIP AND EXERCISE OF SUBSCRIPTION RIGHTS AND THE ACQUISITION, OWNERSHIP AND DISPOSITION OF SHARES.
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PLAN OF DISTRIBUTION
As soon as practicable after August 18, 2023, the Record Date for the Rights Offering, we will distribute the Subscription Rights and Rights Certificates with respect to every share of common stock beneficially owned or share of Class A common stock underlying a Participating Warrant owned and settled as of 5:00 p.m., Eastern Time, on August 16, 2023. If you wish to exercise your Subscription Rights and purchase shares of our Class A common stock, you should complete the Rights Certificate and return it with payment for the shares to the Subscription Agent, Colonial Stock Transfer Company, Inc., 7840 S 700 E, Sandy, UT 84070.
See “Methods for Exercising Subscription Rights.” If you have any questions or need further information about the Rights Offering, please call Okapi Partners LLC, our Information Agent for the Rights Offering, at (212) 297-0720 (bankers and brokers) or (844) 201-1170 (all others) or email at info@okapipartners.com.
Sales by Principal Stockholders, Directors and Executive Officers
This prospectus may be used to cover the sales of Subscription Rights by our principal stockholders and certain of our directors and executive officers. None of our principal stockholders or such directors and executive officers have entered into any binding commitment or agreement to subscribe for Subscription Rights received in this Rights Offering. Our principal stockholders are Joshua M. Hare, co-founder, Chief Science Officer and Chairman, and Donald M. Soffer, co-founder and former member of our Board of Directors. Dr. Hare has indicated an intention to participate in the Rights Offering, but has entered into no commitment to do so. There can be no assurances any of our principal stockholders will participate in the Rights Offering. Some of our directors and executive officers may solicit responses from holders of Subscription Rights, but we will not pay them any commissions or special compensation for these activities.
Dealer-Manager
R.F. Lafferty is the dealer-manager of this offering and under the terms and subject to the conditions contained in the dealer-manager agreement between us and the dealer-manager. R.F. Lafferty will provide marketing assistance and advice to our company in connection with this offering. We have agreed to pay R.F. Lafferty up to 6.0% of the gross proceeds of this offering in cash and to pay R.F. Lafferty a non-accountable expense fee of 0.8% of the gross proceeds of this offering and an out-of-pocket accountable expense allowance of 0.2% of the gross proceeds of this offering. We have agreed to indemnify R.F. Lafferty and its affiliates against, or contribute to losses arising out of, certain liabilities, including liabilities under the Securities Act. R.F. Lafferty’s participation in this offering is subject to customary conditions contained in the dealer-manager agreement.
R.F. Lafferty has additionally agreed to use its best efforts to place any unsubscribed shares of Class A common stock registered hereunder at the subscription price for an additional period of up to 45 days following the expiration of the Rights Offering. The number of shares of Class A common stock that may be sold by us during this 45 day period will depend upon the number of shares of Class A common stock that remain available hereunder following the subscription and exercise of Subscription Rights. For any such unsubscribed shares of Class A common stock placed by R.F. Lafferty after the expiration of the Rights Offering, we have agreed to pay R.F. Lafferty a placement fee equal to 6% of such sales, in lieu of the dealer-manager fee, together with a continuing 0.8% non-accountable expense fee and an out-of-pocket accountable expense allowance of 0.2%, with such placement fee and expenses to be calculated in respect of the total gross proceeds paid to and received by us for subscriptions accepted by us from investors in connection with such placement of Class A common stock and such placement fee and expenses not to exceed the aggregate amounts that would have otherwise been received by R.F. Lafferty if the Rights Offering were to have been fully subscribed. Neither the placement fee nor expense allowance in connection with the placement of the Class A common stock after expiration of the Rights Offering will be payable with respect to any shares purchased as result of the exercise of any basic subscription right or over-subscription privilege in the Rights Offering. The dealer-manager agreement also provides that the dealer-manager will not be subject to any liability to us in rendering the services contemplated by the dealer-manager agreement except for any act of bad faith or gross negligence of the dealer-manager. The dealer-manager and its affiliates may provide to us from time to time in the future in the ordinary course of its business certain financial advisory, investment banking and other services for which it will be entitled to receive customary fees.
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We have agreed to grant to R.F. Lafferty a right of first refusal for a period ending on December 31, 2024 to act as our investment banker on any subsequent equity or equity linked offerings by us if the gross proceeds in this offering are equal to or greater than $10 million. If we wish to terminate such right of first refusal, we are required to pay R.F. Lafferty 1% of the gross proceeds raised in all aggregate offerings pursuant to our engagement letter with R.F. Lafferty in accordance with FINRA Rule 5110.
The maximum commission to be received by any independent broker-dealer or any member of FINRA will not be greater than 8% of the gross proceeds from the exercise of subscription rights in this offering.
Other than as described herein, we do not know of any existing agreements between or among any stockholder, broker, dealer, underwriter or agent relating to the sale or distribution of the shares offered hereby.
We have agreed to pay the Subscription Agent and Information Agent customary fees plus certain expenses in connection with the Rights Offering. Except as described in this section, we are not paying any other commissions, underwriting fees or discounts in connection with the Rights Offering or subsequent re-offer.
Lock-Up Agreements
All of our directors and executive officers will enter into a lock-up agreement that, subject to certain exceptions, prohibit them from directly or indirectly offering, pledging, selling, contracting to sell, selling any option or contract to purchase, purchasing any option or contract to purchase, granting any option, right or warrant to purchase or otherwise transferring or disposing of any shares of our Class A common stock or Class B common stock, options to acquire shares of our Class A common stock or any securities convertible into or exercisable or exchangeable for Class A common stock, whether now owned or hereafter acquired, or entering into any swap or any other agreement or any transaction that transfer, in whole or in part, directly or indirectly, the economic consequence of ownership, for a period expiring 14 days following the expiration of this offering (including any extensions), without the express prior written consent of R.F. Lafferty. Notwithstanding the foregoing, such restrictions and limitations shall not apply to any transfers, sales or assignments by directors and executive officers with respect to the Subscription Rights held by them that are issued pursuant to the Rights Offering.
Electronic Distribution
This prospectus may be made available in electronic format on websites or via email or through other online services maintained by the company and/or the dealer-manager. Other than this prospectus in electronic format, the information on the company’s and/or dealer-manager’s websites and any information contained in any other websites maintained by the company and/or dealer-manager is not part of this prospectus or the registration statement of which this prospectus forms a part, has not been approved or endorsed by us or the dealer-manager, and should not be relied upon by investors.
The foregoing does not purport to be a complete statement of the terms and conditions of the dealer-manager agreement. A copy of the dealer-manager agreement is included as an exhibit to the registration statement of which this prospectus forms a part. See “Where You Can Find More Information” on page 60.
Regulation M Restrictions
The dealer-manager may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any fees received by it might be deemed to be underwriting discounts or commissions under the Securities Act. As an underwriter, the dealer-manager would be required to comply with the requirements of the Securities Act and the Exchange Act, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of any purchases and sales of securities by the dealer-manager acting as a principal. Under these rules and regulations, the dealer-manager must not engage in any stabilization activity in connection with our securities, and must not bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act.
Price Stabilization, Short Positions
No person has been authorized by our company to engage in any form of price stabilization in connection with the Rights Offering.
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LEGAL MATTERS
The validity of the shares of Class A common stock offered hereby and certain other legal matters will be passed upon for us by Buchanan Ingersoll & Rooney PC, Pittsburgh, Pennsylvania. Certain attorneys affiliated with Buchanan Ingersoll & Rooney PC own approximately 20,000 shares of Class A common stock. The dealer-manager is being represented by Olshan Frome Wolosky LLP, New York, New York.
EXPERTS
The financial statements of Longeveron Inc. (i) as of December 31, 2022 and for the year then ended, incorporated in this prospectus by reference from the Annual Report on Form 10-K for the year ended December 31, 2022 (the “2022 10-K”), have been audited by Marcum LLP, an independent registered public accounting firm, as stated in their report; and (ii) as of December 31, 2021 and for the year then ended, incorporated in this prospectus by reference from the 2022 10-K, have been audited by MSL, P.A., an independent registered public accounting firm, as stated in their report, which reports are incorporated herein by reference. Such financial statements have been so incorporated in reliance upon the reports of such firms given upon their authority as experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
Available Information
We make periodic and other filings required to be filed by us as a reporting company under Sections 13 and 15(d) of the Exchange Act. The SEC maintains a website at http://www.sec.gov that contains the reports, proxy and information statements, and other information that issuers, such as us, file electronically with the SEC. Our website address is http://longeveron.com. Information contained on our website, however, is not, and should not be deemed to be, incorporated into this prospectus and you should not consider information contained on our website to be part of this prospectus. We have included our website address as an inactive textual reference only.
This prospectus and any prospectus supplement are part of a registration statement that we filed with the SEC and do not contain all of the information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided below. Forms of the documents establishing the terms of the offered securities are or may be filed as exhibits to the registration statement or documents incorporated by reference in the registration statement. Statements in this prospectus or any prospectus supplement about these documents are summaries and each statement is qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more complete description of the relevant matters. You may inspect a copy of the registration statement through the SEC’s website, as provided above.
Incorporation by Reference
The SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated by reference is deemed to be part of this prospectus. Any statement contained in this prospectus or a previously filed document incorporated by reference will be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus modifies or replaces that statement:
• our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on March 14, 2023;
• our Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023, filed with the SEC on May 12, 2023;
• our Definitive Proxy Statement on Schedule 14A, filed with the SEC on April 28, 2023; and
• our Current Reports on Form 8-K filed with the SEC on January 27, 2023, February 28, 2023, April 10, 2023, June 5, 2023, June 12, 2023, July 5, 2023 and July 20, 2023.
In addition to the filings listed above, any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after (i) the date of this registration statement and prior to effectiveness of this registration statement and (ii) the date of this prospectus and before the completion of the offering of the securities included in this prospectus, however, we will not incorporate by reference any document or portions thereof that are not deemed “filed” with the SEC, or any information furnished pursuant to Items 2.02 or 7.01 of Form 8-K or related exhibits furnished pursuant to Item 9.01 of Current Reports on Form 8-K.
We will provide, without charge, to each person, including any beneficial owner, to whom a copy of this prospectus is delivered, upon such person’s written or oral request, a copy of any and all of the information incorporated by reference in this prospectus. You may request a free copy of any of the documents incorporated by reference in this prospectus by writing or telephoning us at the following address:
Longeveron Inc.
1951 NW 7th Avenue, Suite 520
Miami, FL 33136
(305) 909-0840
Exhibits to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus or any accompanying prospectus supplement.
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Subscription Rights to purchase shares of Class A common stock
at $ per share and shares of Class A common stock
issuable upon the exercise of Subscription Rights or subsequent placement
___________________________
PRELIMINARY PROSPECTUS
___________________________
, 2023
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Part II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses, other than dealer-manager fees to be paid by us in connection with the offering of securities described in this registration statement. All amounts are estimates except for the SEC registration fee. We will bear all expenses shown below.
|
SEC registration fee
|
|
$
|
3,306
|
|
Nasdaq listing fee
|
|
|
*
|
|
Subscription Agent fees and expenses
|
|
|
*
|
|
Information Agent fees and expenses
|
|
|
*
|
|
Printing and engraving expenses
|
|
|
*
|
|
Legal fees and expenses
|
|
|
*
|
|
Accounting fees and expenses
|
|
|
*
|
|
Miscellaneous fees and expenses
|
|
|
*
|
|
Total
|
|
|
*
|
Item 14. Indemnification of Directors and Officers.
Section 102 of the DGCL permits a corporation to eliminate the personal liability of directors of a corporation to the corporation or its stockholders for monetary damages for a breach of fiduciary duty as a director, except where the director breached his duty of loyalty, failed to act in good faith, engaged in intentional misconduct or knowingly violated a law, authorized the payment of a dividend or approved a stock repurchase in violation of Delaware corporate law or obtained an improper personal benefit. Our certificate of incorporation provides that no director of the Registrant shall be personally liable to it or its stockholders for monetary damages for any breach of fiduciary duty as a director, notwithstanding any provision of law imposing such liability, except to the extent that the DGCL prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty.
Section 145 of the DGCL provides that a corporation has the power to indemnify a director, officer, employee, or agent of the corporation, or a person serving at the request of the corporation for another corporation, partnership, joint venture, trust or other enterprise in related capacities against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by the person in connection with an action, suit or proceeding to which he was or is a party or is threatened to be made a party to any threatened, ending or completed action, suit or proceeding by reason of such position, if such person acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, in any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful, except that, in the case of actions brought by or in the right of the corporation, no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the Court of Chancery or other adjudicating court determines that, despite the adjudication of liability but in view of all of the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery or such other court shall deem proper.
Our certificate of incorporation provides that we will indemnify each person who was or is a party or threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than an action by or in the right of us) by reason of the fact that he or she is or was, or has agreed to become, a director or officer, or is or was serving, or has agreed to serve, at our request as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise (all such persons being referred to as an “Indemnitee”), or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding and any appeal therefrom, if such Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, and, with respect to any criminal action or proceeding, he or she had no reasonable cause to believe his or
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her conduct was unlawful. Our restated certificate of incorporation provides that we will indemnify any Indemnitee who was or is a party to an action or suit by or in the right of us to procure a judgment in our favor by reason of the fact that the Indemnitee is or was, or has agreed to become, a director or officer, or is or was serving, or has agreed to serve, at our request as a director, officer, partner, employee or trustee of, or in a similar capacity with, another corporation, partnership, joint venture, trust or other enterprise, or by reason of any action alleged to have been taken or omitted in such capacity, against all expenses (including attorneys’ fees) and, to the extent permitted by law, amounts paid in settlement actually and reasonably incurred in connection with such action, suit or proceeding, and any appeal therefrom, if the Indemnitee acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, our best interests, except that no indemnification shall be made with respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to us, unless a court determines that, despite such adjudication but in view of all of the circumstances, he or she is entitled to indemnification of such expenses. Notwithstanding the foregoing, to the extent that any Indemnitee has been successful, on the merits or otherwise, he or she will be indemnified by us against all expenses (including attorneys’ fees) actually and reasonably incurred in connection therewith. Expenses must be advanced to an Indemnitee under certain circumstances.
We have entered into indemnification agreements with each of our directors and officers. These indemnification agreements may require us, among other things, to indemnify our directors and officers for some expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by a director or officer in any action or proceeding arising out of his or her service as one of our directors or officers, or any other company or enterprise to which the person provides services at our request.
We maintain a general liability insurance policy that covers certain liabilities of directors and officers of our corporation arising out of claims based on acts or omissions in their capacities as directors or officers.
In any underwriting agreement we enter into in connection with the sale of Class A common stock being registered hereby, the underwriters will agree to indemnify, under certain conditions, us, our directors, our officers and persons who control us within the meaning of the Securities Act, against certain liabilities.
Item 15. Recent Sales of Unregistered Securities.
Set forth below is information regarding unregistered securities issued by us within the past three years. Also included is the consideration received by us for such unregistered securities and information relating to the section of the Securities Act, or rule of the Securities and Exchange Commission, under which exemption from registration was claimed.
• In March 2020, we completed the sale of 22,902 Series C units to accredited investors for an aggregate purchase price of $1,374,120, or $60.00 per unit.
• During the nine months ended September 30, 2021, we issued a total of 163,719 unregistered shares of Class A common stock, with an aggregate value of $1.2 million, as consideration under various pre-existing consulting and license agreements. More specifically, of the amount noted in the prior sentence, 110,387 shares were issued to University of Miami and 53,332 shares were issued to the Company’s investor relations consultants. The issuance of securities in the transactions described above were each exempt from registration under Section 4(a)(2) of the Securities Act and/or Rule 506 promulgated thereunder.
• On November 30, 2021, we entered into a Purchase Agreement with the Purchasers (as defined therein) for the purchase and sale of (a) an aggregate of 1,169,288 shares of our Class A common stock and warrants to purchase 1,169,288 shares of Class A common stock at an initial exercise price of $17.50 per share (the “PIPE Warrants”), at a combined purchase price of $17.50 per share of Class A common stock and PIPE Warrants. The shares of Class A common stock and the PIPE Warrants were issued at a closing on December 3, 2021 pursuant to the terms of the Purchase Agreement.
The offer and sale of all securities listed in this item 15 was made to a limited number of accredited investors and qualified institutional buyers in reliance upon exemptions from the registration requirements pursuant to Section 4(a)(2) under the Securities Act and Regulation D promulgated under the Securities Act. Individuals who purchased securities as described above represented their intention to acquire the securities for investment only and not with a view to or for sale in connection with any distribution thereof, and appropriate legends were affixed to the share certificates issued in such transactions.
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Item 16. Exhibits and Financial Statement Schedules.
(a) Exhibits.
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Exhibit Number
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Description of Exhibit
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1.1*
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Form of Dealer-Manager Agreement with R.F. Lafferty & Co. Inc.
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2.1
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Plan of Conversion, incorporated by reference to Exhibit 2.1 to the Registrant’s Annual Report on Form 10-K filed March 30, 2021
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|
2.2
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Certificate of Conversion of Longeveron LLC, incorporated by reference to Exhibit 2.2 to the Registrant’s Annual Report on Form 10-K filed March 30, 2021
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3.1
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Certificate of Incorporation of Longeveron Inc., incorporated by reference to Exhibit 4.1 to the Registrant’s Registration Statement on Form S-8 filed on February 16, 2021
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3.2
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Bylaws of Longeveron Inc., incorporated by reference to Exhibit 4.2 to the Registrant’s Registration Statement on Form S-8 filed on February 16, 2021
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3.3
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First Amended and Restated Limited Liability Company Agreement of Longeveron LLC, effective December 31, 2014, incorporated by reference to Exhibit 3.3 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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3.3.1
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First Amendment to First Amended and Restated Limited Liability Company Agreement of Longeveron LLC, effective July 18, 2017, incorporated by reference to Exhibit 3.3.1 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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3.3.2
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Second Amendment to First Amended and Restated Limited Liability Company Agreement of Longeveron LLC, effective October 5, 2017, incorporated by reference to Exhibit 3.3.2 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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3.3.3
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Third Amendment to First Amended and Restated Limited Liability Company Agreement of Longeveron LLC, effective October 23, 2017, incorporated by reference to Exhibit 3.3.3 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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3.3.4
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Fourth Amendment to First Amended and Restated Limited Liability Company Agreement of Longeveron LLC, effective October 15, 2023, incorporated by reference to Exhibit 3.3.4 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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4.1
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Specimen Class A common stock Certificate evidencing the shares of Class A common stock, incorporated by reference to Exhibit 4.1 on Registrant’s Registration Statement No. 333-252234 filed February 3, 2021
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4.2*†
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Form of Transferable Subscription Rights Certificate
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5.1*
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Opinion of Buchanan Ingersoll & Rooney PC
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8.1*
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Tax Opinion of Buchanan Ingersoll & Rooney PC
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10.1
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Exclusive License Agreement dated November 20, 2014, between the University of Miami and Longeveron LLC, incorporated by reference to Exhibit 10.1 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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10.1.1
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Amendment to Exclusive License Agreement dated December 11, 2017, between the University of Miami and Longeveron LLC, incorporated by reference to Exhibit 10.1.1 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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10.1.2
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Second Amendment to Exclusive License Agreement dated March 3, 2021, between the University of Miami and Longeveron Inc., incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed March 9, 2021
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10.2
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Collaborative Research and Development Agreement dated March 3, 2021, between the University of Miami and Longeveron Inc., incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed March 9, 2021
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10.3
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License Agreement dated December 22, 2016, between JMHMD Holdings, LLC and Longeveron LLC, incorporated by reference to Exhibit 10.2 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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10.3.1
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First Amendment to License Agreement effective December 22, 2016, by and between JMH MD Holdings, LLC and Longeveron LLC, incorporated by reference to Exhibit 10.2.1 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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10.4#
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Consulting Services Agreement, dated November 20, 2014, by and between Longeveron LLC and Joshua M. Hare, M.D., incorporated by reference to Exhibit 10.3 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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10.5#
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Employment Agreement, effective August 12, 2020, by and between Longeveron LLC and James Clavijo, incorporated by reference to Exhibit 10.4 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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II-3
Table of Contents
|
Exhibit Number
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Description of Exhibit
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10.6
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Lease Agreement, dated October 6, 2015, by and between Wexford Miami, LLC and Longeveron LLC, incorporated by reference to Exhibit 10.5 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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10.7
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Grant Agreement, dated October 1, 2020, by and between the Maryland Stem Cell Research Commission, acting by and through the Maryland Technology Development Corporation, and Longeveron LLC, incorporated by reference to Exhibit 10.6 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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10.8
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Alzheimer’s Association Grant to Longeveron LLC, dated April 1, 2023, incorporated by reference to Exhibit 10.7 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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10.9
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National Institutes of Health Grant to Longeveron LLC, dated April 26, 2023, incorporated by reference to Exhibit 10.8 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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10.10
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National Institutes of Health Grant to Longeveron LLC, dated June 24, 2020, incorporated by reference to Exhibit 10.9 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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10.11
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National Institutes of Health Grant to University of Maryland Baltimore, dated September 9, 2020, incorporated by reference to Exhibit 10.10 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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10.12
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Paycheck Protection Program Promissory Note dated April 16, 2020, incorporated by reference to Exhibit 10.11 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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10.13
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2017 Longeveron LLC Incentive Plan, dated July 18, 2017, incorporated by reference to Exhibit 10.12 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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10.14
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Longeveron Inc. 2021 Incentive Award Plan, incorporated by reference to Exhibit 10.13 on Registrant’s Registration Statement No. 333-252234 filed February 3, 2021
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10.15
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Form of Indemnification Agreement for Officers and Directors, incorporated by reference to Exhibit 10.14 to the Registrant’s Registration Statement No. 333-252234 filed February 3, 2021
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10.16
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Form of Securities Purchase Agreement, incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed December 3, 2021
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10.17
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Form of Registration Rights Agreement, incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed December 3, 2021
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21.1
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Subsidiaries of the Registrant, incorporated by reference to Exhibit 21.1 to the Registrant’s Registration Statement No. 333-252234 filed January 19, 2021
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23.1*
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Consent of Marcum LLP., independent registered public accounting firm
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23.2*
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Consent of MSL, P.A., former independent public accounting firm
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23.3*
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Consent of Buchanan Ingersoll & Rooney PC (included in Exhibit 5.1 and 8.1)
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24.1**
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Power of Attorney (included on signature page to this Registration Statement)
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24.2*
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Power of Attorney
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99.1*†
|
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Form of Instructions as to Use of Transferable Subscription Rights Certificates
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99.2*
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Form of Letter to Stockholders and Participating Warrant Holders Who Are Record Holders
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99.3*
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Form of Beneficial Owner Election Form
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99.4*
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Form of Letter to Brokers, Dealers, Banks and Other Nominee Holders
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99.5*
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Form of Letter to Clients of Nominee Holders
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99.6*
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Form of Nominee Holder Certification
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99.7*
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|
Form of Notice of Guaranteed Delivery
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101.INS
|
|
Inline XBRL Instance Document
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101.SCH
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Inline XBRL Taxonomy Extension Schema Document
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101.CAL
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Inline XBRL Taxonomy Extension Calculation Linkbase Document
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101.DEF
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Inline XBRL Taxonomy Extension Definition Linkbase Document
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101.LAB
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Inline XBRL Taxonomy Extension Label Linkbase Document
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101.PRE
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Inline XBRL Taxonomy Extension Presentation Linkbase Document
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104
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Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101)
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107*
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Filing Fee Table
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II-4
Table of Contents
(b) Financial Statement Schedules. Schedules not listed above have been omitted because the information required to be set forth therein is not applicable or is shown in the financial statements or notes thereto.
Item 17. Undertakings.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high and of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and
(iii) To include any material information with respect to the plan of distribution not previously disclosed in this registration statement or any material change to such information in this registration statement;
provided, however, that paragraphs (1)(i), (1)(ii) and (1)(iii) above do not apply if the registration statement is on Form S-1 and the information required to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii) Each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
II-5
Table of Contents
(5) That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act, as amended, may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable.
(d) The undersigned registrant hereby undertakes that:
(i) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(I) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective; and
(ii) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
II-6
Table of Contents
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this Amendment No. 1 to the registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Miami, Florida, on this 28th day of July, 2023.
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LONGEVERON INC.
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By:
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/s/ Wa’el Hashad
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Wa’el Hashad
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Chief Executive Officer
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Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement on Form S-1 has been signed by the following persons in the capacities and on the dates indicated.
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Signature
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Title
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Date
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/s/ Wa’el Hashad
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Chief Executive Officer and Director
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July 28, 2023
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Wa’el Hashad
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(principal executive officer)
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/s/ James Clavijo
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Chief Financial Officer
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July 28, 2023
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James Clavijo
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|
(principal financial officer and principal accounting officer)
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/s/ *
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Director
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July 28, 2023
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Joshua M. Hare
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/s/ *
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Director
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July 28, 2023
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Neil E. Hare
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/s/ *
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Director
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July 28, 2023
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Rock Soffer
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/s/ *
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Director
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July 28, 2023
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Cathy Ross
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/s/ *
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Director
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July 28, 2023
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Khoso Baluch
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/s/ *
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Director
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July 28, 2023
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Ursula Ungaro
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Director
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Douglas Losordo
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/s/ *
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Director
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July 28, 2023
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Jeffrey Pfeffer
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/s/ Wa’el Hashad
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* By: Wa’el Hashad, Attorney-in-Fact
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II-7
S-1/A
true
0001721484
0001721484
2023-01-01
2023-03-31
Exhibit 1.1
DEALER-MANAGER AGREEMENT
__________, 2023
R.F. Lafferty & Co., Inc.
As Dealer-Manager
40 Wall Street, 29th Floor
New York, New York 10005
Ladies and Gentlemen:
The following will confirm
our agreement relating to the proposed subscription rights offering (the “Rights Offering”) to be undertaken
by Longeveron Inc., a Delaware corporation (the “Company”), pursuant to which the Company will distribute to
holders of record of its (i) Class A common stock, par value $0.001 per share (“Class A Common Stock”), (ii)
Class B common stock, par value $0.001 per share (“Class B Common Stock”), and (iii) warrants exercisable for
Class A Common Stock (“Warrants”), transferable subscription rights (the “Rights”)
as set forth in the Company’s registration statement on Form S-1 (File No. 333-272946) initially filed with the U.S. Securities
and Exchange Commission (the “Commission”) on June 27, 2023, to subscribe for and purchase up to $30.0 million
of Class A Common Stock, at a subscription price equal to $[·] per share (the “Subscription Price”).
Shares of Class A Common Stock issuable in the Rights Offering are referred to herein as the “Rights Shares.”
1. The
Rights Offering.
(a) The
Company proposes to undertake the Rights Offering pursuant to which each holder of Class A Common Stock, Class B Common Stock and Warrants
shall receive five Rights for every share of Class A Common Stock and Class B Common Stock held of record by such holder or into which
Class A Common Stock is exercisable pursuant to an existing Warrant, as the case may be, at the close of business on ___________, 2023
(the “Record Date”). Holders of Rights (each, a “Holder”)
will be entitled to subscribe for and purchase, at the Subscription Price, one share of Class A Common Stock for every Right granted to
Holders on the Record Date (the “Basic Subscription Right”).
In addition, the Company is registering the resale of the Rights distributed to the Company’s principal stockholders, directors
and executive officers as named in the prospectus included in the Registration Statement (as defined below).
(b) The
Rights shall be transferable, and the Company has applied for the Rights and the Rights Shares to be listed for trading on The Nasdaq
Capital Market (“Nasdaq”).
(c) Any
Holder who fully exercises all Basic Subscription Rights issued to such Holder is entitled to subscribe for Rights Shares which were not
otherwise subscribed for by other Holders pursuant to their Basic Subscription Rights (the “Over-Subscription Privilege”).
The Over-Subscription Privilege shall allow a Holder to subscribe for any or all of the Rights Shares which were not otherwise subscribed
for as of the Expiration Date (as defined below). Rights Shares acquired pursuant to the Basic Subscription Right and the Over-Subscription
Privilege are subject to certain limitations and pro rata allocation, as more fully discussed in the Prospectus (as defined herein).
(d) Unless
extended as provided in the Prospectus (as defined below), the Rights are intended to expire at 5:00 p.m., Eastern time, on __________,
2023 (the “Expiration Date”). Notwithstanding the foregoing, the Company shall have the right to extend the
Expiration Date for up to an additional thirty (30) calendar days in its sole discretion.
(e) All
funds from the exercise of Basic Subscription Rights and Over-Subscription Privileges shall be deposited with a bank or other financial
institution and Colonial Stock Transfer Company, Inc. shall act as the subscription and escrow agent (the “Subscription Agent”),
and held in a segregated account pending a final determination of the number of Rights Shares to be issued pursuant to the exercise of
Basic Subscription Rights and Over-Subscription Privileges. As soon as practicable after the Expiration Date, the Company shall conduct
a closing of the Rights Offering (a “Closing”).
2. Appointment
as Dealer-Manager; Role of Dealer-Manager.
(a) The
Company has engaged R.F. Lafferty & Co., Inc. as the exclusive dealer-manager (the “Dealer-Manager”) in
connection with the Rights Offering, and authorizes the Dealer-Manager to act as such on its behalf in connection with the Rights Offering,
in accordance with this Dealer-Manager Agreement (this “Agreement”). Until the Expiration Date, the Company
will not solicit, negotiate with or enter into any agreement with any placement agent, financial advisor, dealer-manager, brokers, dealers
or underwriters or any other person or entity in connection with the Rights Offering. On the basis of the representations and warranties
and agreements of the Company contained in this Agreement and subject to and in accordance with the terms and conditions hereof, the Dealer-Manager
agrees that as Dealer-Manager it will, in accordance with its customary practice and to the extent requested by the Company, use its commercially
reasonable efforts to (i) advise on pricing, structuring and other terms and conditions of the Rights Offering, including whether to provide
for transferability, tradability and over-subscription privileges and limits (it being acknowledged that such services have been previously
provided pursuant to the engagement letter, dated as of May 1, 2023, as amended July 11, 2023, between Dealer-Manager and the Company
(as amended, the “Engagement Letter”), (ii) provide guidance on general market conditions and their impact on
the Rights Offering, (iii) assist the Company in drafting a presentation that may be used to market the Rights Offering to existing and
potential investors, describing the proposed capital raise, the Company’s history and performance to date, track records of key
executives, highlights of the Company’s business plan and the intended use of proceeds from the Rights Offering, (iv) advise on
the selection of the Information Agent and Subscription Agent (it being acknowledged that such advice has been previously rendered pursuant
to the Engagement Letter), (v) assist the Company with its understanding of state blue sky laws, (vi) solicit the holders of the Rights
to encourage them to exercise such Rights, (vii) enter into selected dealer agreements with other registered broker-dealers and provide
the Company with the opportunity to introduce the Company and make a presentation to such broker-dealers, and (viii) after the conclusion
of the Rights Offering, place Class A Common Stock constituting unsubscribed Rights Shares at the Subscription Price for an additional
period of up to forty-five (45) calendar days thereafter (the “Standby Placement Period”), in each case using
its best efforts and in conformity with all applicable federal and state securities laws. Notwithstanding anything that may
be to the contrary in this Agreement, the Company and the Dealer-Manager hereby agree that the Dealer-Manager will not underwrite the
Rights Offering or the placement of unsubscribed Rights Shares during any Standby Placement Period, the Dealer-Manager has no obligation
to act, and will not act, in any capacity as an underwriter in connection with the Rights Offering or the placement of unsubscribed Rights
Shares during any Standby Placement Period, and the Dealer-Manager has no obligation to purchase or procure purchases of the Rights Shares
offered in connection with the Rights Offering or placed during any Standby Placement Period. The parties acknowledge and agree that the
Dealer-Manager may perform certain of its services through its affiliates and any of its affiliates performing services hereunder shall
be entitled to the benefits and be subject to the terms and conditions of this Agreement.
(b) The
Company acknowledges and agrees that: (i) the terms of this Agreement are intended to be arm’s-length commercial transactions between
the Company, on the one hand, and the Dealer-Manager, on the other hand; (ii) other than the obligations expressly set forth in this Agreement
and the Engagement Letter, in connection therewith, the Dealer-Manager is not acting as a fiduciary of the Company; (iii) other than the
obligations expressly set forth in this Agreement and the Engagement Letter, the Dealer-Manager has not assumed any agency or fiduciary
responsibilities in favor of the Company with respect to the Rights Offering, the placement of unsubscribed Rights Shares during any Standby
Placement Period, or in either case the process leading thereto (irrespective of whether the Dealer-Manager has advised or is currently
advising the Company on other matters in its capacity as Dealer-Manager or otherwise) or any other obligation to the Company with respect
to the Rights Offering or the placement of unsubscribed Rights Shares during any Standby Placement Period, except the obligations expressly
set forth in this Agreement; and (iv) the Dealer-Manager may be engaged in a broad range of transactions that involve interests that differ
from those of the Company which the Dealer-Manager may be under no obligation to disclose. The Company acknowledges that it has consulted
its own legal and financial advisors with respect to its execution of and performance under this Agreement.
3. No
Liability for Acts of Brokers, Dealers, Banks and Trust Companies. The Dealer-Manager shall not be subject to any liability (in tort,
contract or otherwise) to the Company or the Company’s Subsidiaries, if any (as such term is defined in Rule 405 of the Securities
Act of 1933, as amended (the “Securities Act”)), or Affiliates (as such term is defined in Rule 144 under the
Securities Act) for any act or omission on the part of any broker or dealer in securities (other than the Dealer-Manager or any Affiliates
of the Dealer-Manager) or any natural person, partnership, limited liability partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture, or other entity or organization (each, a “Person”).
Except as set forth herein or in the Engagement Letter, the Company agrees that it will not hold the Dealer-Manager liable for its own
acts or omissions in performing its obligations as advisor or Dealer-Manager hereunder or otherwise in connection with the Rights Offering,
the placement of unsubscribed Rights Shares during any Standby Placement Period, or the related transactions, and except for any losses,
claims, damages, liabilities and expenses to have resulted directly from any such acts or omissions undertaken or omitted to be taken
by the Dealer-Manager or its Affiliates through gross negligence, bad faith or willful misconduct, in all cases as determined in a final
judgment by a court of competent jurisdiction. The Dealer-Manager may appoint sub-placement agents and/or dealers in connection with the
Rights Offering or the placement of unsubscribed Rights Shares during any Standby Placement Period. In soliciting or obtaining exercises
of Rights or the placement of unsubscribed Rights Shares during any Standby Placement Period, the Dealer-Manager shall not be deemed to
be acting as the agent of the Company or as the agent of any broker, dealer, bank or trust company, and no broker, dealer, bank or trust
company shall be deemed to be acting as the Dealer-Manager’s agent or as the agent of the Company. Unless the context specifically
requires otherwise, the term “Company” as used in this Agreement means the Company and its Subsidiaries, if
any, collectively on a consolidated basis. Except as set forth herein, the Company agrees that it will not hold the Dealer-Manager liable
or responsible for the failure of the Rights Offering or the placement of any unsubscribed Rights Shares during any Standby Placement
Period in the event that the Rights Offering is not successfully consummated for any reason other than because of any acts or omissions
undertaken or omitted to be taken by the Dealer-Manager through its gross negligence, bad faith or willful misconduct, in all cases as
determined in a final judgment by a court of competent jurisdiction.
4. The
Offer Documents.
(a) There
will be used in connection with the Rights Offering certain materials in addition to the Registration Statement, any Preliminary Prospectus
and the Prospectus (each as defined herein), together with any amendments or supplements thereto, as filed, including: (i) all exhibits
to the Registration Statement which pertain to the conduct of the Rights Offering and (ii) any soliciting materials relating to the Rights
Offering approved by the Company, and (iii) any “free-writing prospectus” with respect to the Rights Offering filed by the
Company (collectively with the Registration Statement and the Prospectus, the “Offer Documents”). The Offer
Documents have been or will be prepared and approved by, and, except for the Dealer-Manager Information, are the sole responsibility of,
the Company.
(b) The
Company shall furnish copies of drafts of any Offer Documents to the Dealer-Manager within a reasonable time in advance of filing with
the Commission or with any other federal, state, or other governmental agency or instrumentality or court (“Other Agency”).
The Dealer-Manager shall be given an opportunity to review and comment upon the Offer Documents, to which comments the Company will give
reasonable consideration.
(c) In
the event that the Company uses or permits the use of, or files with the Commission or any Other Agency, any Offer Documents (i) which
have not been submitted to the Dealer-Manager for its comments, or (ii) which have been so submitted and with respect to which the
Dealer-Manager has made comments, but which comments have not resulted in a response reasonably satisfactory to the Dealer-Manager and
its counsel to reflect such comments, then the Dealer-Manager shall be entitled to withdraw as a Dealer-Manager in connection with the
Rights Offering and the related transactions, including withdrawal in connection with the placement of unsubscribed Rights Shares during
any Standby Placement Period, without any liability or penalty to the Dealer-Manager or any other Person identified in Section 11 hereof
as an “indemnified party,” and the Dealer-Manager shall be entitled to receive the payment of all fees and expenses payable
under this Agreement or the Engagement Letter which have accrued to the date of such withdrawal. No such event has occurred through the
date hereof.
(d) The
Company agrees to furnish the Dealer-Manager with as many copies as it may reasonably request of the final forms of the Offer Documents,
and the Dealer-Manager is authorized to use copies of the Offer Documents in connection with its acting as Dealer-Manager. The Company
represents and warrants to the Dealer-Manager that the Dealer-Manager may rely on the accuracy and completeness of all of the Offer Documents
and any other information delivered to the Dealer-Manager by or on behalf of the Company in connection with the Rights Offering and the
placement of unsubscribed Rights Shares during any Standby Placement Period. The Dealer-Manager hereby agrees that it will not disseminate
any written material for or in connection with the solicitation of exercises of Rights pursuant to the Rights Offering other than the
Offer Documents and any other information delivered to the Dealer-Manager by or on behalf of the Company in connection with the Rights
Offering and the placement of unsubscribed Rights Shares during any Standby Placement Period.
(e) The
Company represents and agrees that no solicitation material, other than the Offer Documents and the documents to be filed therewith as
exhibits thereto, will be used by or on behalf of the Company in connection with the Rights Offering or the placement of unsubscribed
Rights Shares during any Standby Placement Period, in either case without the prior approval of the Dealer-Manager, which approval will
not be unreasonably withheld. In the event that the Company uses or permits the use of any such solicitation material in connection with
the Rights Offering or the placement of unsubscribed Rights Shares during any Standby Placement Period, then the Dealer-Manager shall
be entitled to withdraw as Dealer-Manager in connection with the Rights Offering, the placement of unsubscribed Rights Shares during any
Standby Placement Period and the related transactions without any liability or penalty to the Dealer-Manager or any other Person identified
in Section 11 hereof as an “indemnified party,” and the Dealer-Manager shall be entitled to receive the payment of all fees
and expenses payable under this Agreement or the Engagement Letter which have accrued to the date of such withdrawal or which otherwise
thereafter become payable.
(f) As
of the date hereof and at all times prior to and following the effectiveness of the Registration Statement, the Company shall, and cause
its officers, directors and Affiliates to, comply with all rules and regulations of the Commission relating to public offerings, including,
without limitation, those relating to public statements and disclosures of material non-public information.
(g) The
Company agrees that any reference to the Dealer-Manager in any Offer Documents or in any newspaper, announcement or press release or other
document or communication is subject to the Dealer-Manager’s prior consent, which consent shall not be unreasonably withheld. The
Dealer-Manager agrees that any reference to the Company or the Rights Offering in a press release or other document or communication made
by the Dealer-Manager, any of its Affiliates or a registered broker-dealer with whom the Dealer-Manager has entered into a selected dealer
agreement is subject to the Company’s prior consent, which consent shall not be unreasonably withheld.
5. Representations
and Warranties. The Company represents and warrants to the Dealer-Manager that:
(a) The
Company has prepared and filed with the Commission a registration statement and an amendment or amendments thereto, on Form S-1 (File
No. 333-272946), including a Preliminary Prospectus (as defined below), describing the Rights and the Rights Shares, in accordance with
the provisions of the rules and regulations of the Commission under the Securities Act, for the registration of the Rights and Rights
Shares under the Securities Act. At the time of such filing, the Company met the requirements of Form S-1 under the Securities Act. Promptly
after execution and delivery of this Agreement, the Company will prepare and file a prospectus in accordance with the provisions of Rule
430A (“Rule 430A”) of the rules and regulations of the Commission under the Securities Act (the “Securities
Act Regulations”) and paragraph (b) of Rule 424 (“Rule 424(b)”) of the Securities Act Regulations.
The information included in such prospectus that was omitted from such Registration Statement at the time it became effective but that
is deemed to be part of such Registration Statement at the time it became effective pursuant to paragraph (b) of Rule 430A is referred
to as “Rule 430A Information.” The Preliminary Prospectus and each prospectus used before such Registration
Statement became effective, and any prospectus that omitted the Rule 430A Information that was used after such effectiveness and prior
to the execution and delivery of this Agreement, is referred to herein as a “Preliminary Prospectus.” For purposes
of this Agreement, “Effective Time” means the date and the time as of which such registration statement, or
the most recent post-effective amendment thereto, if any, was declared effective by the Commission; “Effective Date”
means the date of the Effective Time; “Registration Statement” means such Registration Statement, as amended
at the Effective Time, including any documents which are exhibits thereto; and “Prospectus” means such final
prospectus, as first filed with the Commission pursuant to paragraph (1) or (4) of Rule 424(b) of the Securities Act, including the Preliminary
Prospectus and all information or reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
incorporated in the Prospectus by reference. The Commission has not issued any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus. All references in this Agreement to the Registration Statement, a Preliminary Prospectus, and the Prospectus,
or any amendments or supplements to any of the foregoing shall be deemed to include any copy thereof filed with the Commission pursuant
to its Electronic Data Gathering, Analysis and Retrieval System (“EDGAR”). The Prospectus delivered to the Dealer-Manager
for use in connection with the Rights Offering will be identical to the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T promulgated by the Commission.
(b) The
Registration Statement (together with all exhibits filed as part of the Registration Statement) conforms, and any Preliminary Prospectus
and the Prospectus and any further amendments or supplements to the Registration Statement conforms or will conform, when they are filed
with or become effective by the Commission, as the case may be, in each case, in all material respects to the requirements of the Securities
Act and collectively do not and will not, as of the applicable Effective Date (as to the Registration Statement and any amendment thereto)
and as of the applicable filing date (as to the Prospectus and any amendment or supplement thereto) contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein (with respect
to the Prospectus, in the light of the circumstances under which they were made) not misleading; provided that no representation
or warranty is made by the Company as to information contained in or omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to the Company by or on behalf of the Dealer-Manager specifically for inclusion
therein, it being acknowledged and agreed that such information provided by or on behalf of the Dealer-Manager consists solely and exclusively
of disclosure of the name of the Dealer-Manager acting in its capacity as dealer-manager for the Rights Offering contained in the Prospectus,
and information provided within the “Plan of Distribution” section of the Prospectus, except for the information provided
under the sub-section entitled “Sales by Principal Stockholders, Directors and Executive Officers,” (collectively, the “Dealer-Manager
Information”) under appropriate headings and in its final form as approved by the Dealer-Manager and its counsel.
(c) There
are no contracts, agreements, plans or other documents which are required to be described in the Prospectus or filed as exhibits to the
Registration Statement by the Securities Act which have not been described in the Prospectus, or filed as exhibits to the Registration
Statement or incorporated by reference into the exhibit table of the Registration Statement as permitted by the Securities Act.
(d) The
Company has been duly incorporated and is validly existing as a corporation in good standing under the laws of the State of Delaware,
is duly qualified to do business and is in good standing as a foreign corporation in each jurisdiction in which its ownership or lease
of property or the conduct of its business requires such qualification, and has all power and authority necessary to own or hold its properties
and to conduct the business in which it is engaged, except where the absence of such power, authority, qualification or ownership (either
individually and in the aggregate) could not reasonably be expected to have a material adverse effect on: (i) the business, condition
(financial or otherwise), results of operations, stockholders’ equity, or properties of the Company or (ii) the Rights Offering
or consummation of any of the other transactions contemplated by this Agreement, the Registration Statement or the Prospectus (any such
effect being a “Material Adverse Effect”).
(e) This
Agreement has been duly authorized, executed and delivered by the Company and, assuming the due authorization, execution and delivery
by the Dealer-Manager, constitutes the valid and legally binding agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforceability hereof may be limited by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium
or similar laws relating to or affecting creditors’ rights generally and by general principles of equity.
(f) The
Company is not: (i) in violation of its charter or by-laws, (ii) in default under or in breach of, and no event has occurred which, with
notice or lapse of time or both, would constitute a default or breach under or result in the creation or imposition of any lien, charge,
mortgage, pledge, security interest, claim, equity, trust or other encumbrance, preferential arrangement, defect or restriction of any
kind whatsoever (each, a “Lien”) upon any of the Company’s property or assets pursuant to any material
contract, agreement, indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which it is a party or by
which it is bound or to which any of its properties or assets is subject, or (iii) in violation in any respect of any law, rule, regulation,
ordinance, directive, judgment, decree or order, foreign and domestic, to which it or its properties or assets may be subject or has failed
to obtain any material license, permit, certificate, franchise or other governmental authorization or permit necessary to the ownership
of its properties or assets or to the conduct of its business, except, in the case of clauses (ii) and (iii) above, any violation, default
or failure to possess the same that would not reasonably be expected to have a Material Adverse Effect.
(g) The
Company has caused each of its officers and directors to deliver to the Dealer-Manager an executed Lock-Up Agreement, in the form substantially
similar to the form attached hereto as Exhibit A (the “Lock-Up Agreement”), prior to the execution of
this Agreement.
(h) Prior
to or on the date hereof: (i) the Company and the Subscription Agent have entered into a subscription and escrow agent agreement (the
“Subscription Agent Agreement”) if required by the Subscription Agent and (ii) the Company and Okapi Partners
LLC (the “Information Agent”) have or will have entered into an information agent agreement (the “Information
Agent Agreement”) if required by the Information Agent. When executed by the Company, if applicable, each of the Subscription
Agent Agreement and the Information Agent Agreement will have been duly authorized, executed and delivered by the Company and, assuming
due authorization, execution and delivery by Subscription Agent or the Information Agent, as the case may be, will constitute a valid
and legally binding agreement of the Company enforceable in accordance with its terms, except as the enforceability thereof may be limited
by bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium or similar laws relating to or affecting creditors’
rights generally and by general principles of equity.
(i) The
Rights to be issued and distributed by the Company have been duly and validly authorized and, when issued and delivered in accordance
with the terms of the Offer Documents, as applicable, will be duly and validly issued, and will constitute valid and legally binding obligations
of the Company enforceable against the Company in accordance with their terms. No Holder is or will be subject to personal liability by
reason of being such a holder, and the Rights conform to the description thereof contained in the Prospectus.
(j) Except
as disclosed in the Prospectus with respect to the Company’s authorized capitalization, the Rights Shares have been or will be duly
and validly authorized and reserved for issuance upon exercise of the Rights or placement for purchase during any Standby Placement Period,
as applicable, are free of statutory and contractual preemptive rights and are sufficient in number to meet the exercise requirements
of the Rights Offering; and the Rights Shares, when so issued and delivered against payment therefor in accordance with the terms of the
Rights Offering and the terms of any placement during the Standby Placement Period, will be duly and validly issued, fully paid and non-assessable,
with no personal liability attaching to the ownership thereof.
(k) The
Class A Common Stock is listed for trading on Nasdaq. The Company has not received an oral or written notification from Nasdaq or any
court or any other federal, state, local or foreign governmental or regulatory authority having jurisdiction over the Company or any of
its properties or assets (“Governmental Authority”) of any investigation or other action that would cause the
Class A Common Stock to not be listed on Nasdaq.
(l) The
Company has an authorized capitalization as set forth under the caption “Capitalization” in the Prospectus, and all of the
issued shares of capital stock of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and
have been issued in compliance with federal and state securities laws. None of the outstanding shares of Company capital stock were issued
in violation of any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the
Company. There are no authorized or outstanding options, warrants, preemptive rights, rights of first refusal or other rights to purchase,
or equity or debt securities convertible into or exchangeable or exercisable for, any capital stock of the Company or any of its Subsidiaries
other than those accurately described in the Registration Statement and Prospectus or in information incorporated therein by reference.
The description of the Company’s stock option, stock bonus and other stock plans or arrangements, and the options or other rights
granted thereunder, set forth, or incorporated by reference, in the Registration Statement and Prospectus accurately and fairly presents
in all material respects the information required to be shown with respect to such plans, arrangements, options and rights.
(m) The
Company owns or leases all such assets or properties as are reasonably necessary to the conduct of its business as presently operated
and as proposed to be operated as described in the Registration Statement and the Prospectus. Except to the extent licensed or leased
by the Company, the Company has good and marketable title in fee simple to all real property and good and marketable title to all personal
property owned by them, in each case free and clear of any Lien, except for such Liens as are described in the Registration Statement
and the Prospectus or in information incorporated therein by reference. Any real property and buildings held under lease or sublease by
the Company is held under valid, subsisting and enforceable leases with such exceptions as are not material to, and do not interfere with,
the use made and proposed to be made as described in the Registration Statement and the Prospectus of such property and buildings by the
Company. The Company has not received any notice of any material claim adverse to its ownership of any real or personal property or of
any material claim against the continued possession of any real property, whether owned or held under lease or sublease by the Company.
(n) The
Company has all material consents, approvals, authorizations, orders, registrations, qualifications, licenses, filings and permits of,
with and from all judicial, regulatory and other Governmental Authorities and all third parties, foreign and domestic, including, without
limitation, those administered by the U.S. Food and Drug Administration of the U.S. Department of Health and Human Services (“FDA”),
or any foreign, federal, state or local governmental or regulatory authority performing functions similar to those performed by the FDA
(collectively, with the Licensing Requirements described below, the “Consents”), to own, lease and operate its
properties and conduct their businesses as presently being conducted and as disclosed in the Registration Statement and the Prospectus,
and each such Consent is valid and in full force and effect. The Company has not received notice of any investigation or proceedings which
results in or, if decided adversely to the Company, could reasonably be expected to result in, the revocation of any Consent or reasonably
be expected to have a Material Adverse Effect.
(o) The
execution, delivery and performance by the Company of this Agreement, the Subscription Agent Agreement and the Information Agent Agreement,
if applicable, the issuance of the Rights and Rights Shares in accordance with the terms of the Offer Documents, the issuance of unsubscribed
Rights Shares in accordance with the placement thereof during any Standby Placement Period, and the consummation by the Company of the
transactions contemplated hereby and thereby, will not conflict with or result in a breach or violation of any of the terms or provisions
of, or constitute a default under, any material indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to
which the Company is a party or by which it is bound or to which any of the properties or assets of the Company is subject, nor will such
actions result in any violation of the provisions of the charter or by-laws of the Company or any statute or any order, rule or regulation
of any court or any Governmental Authority; and except for the registration of the Rights Shares under the Securities Act, and such consents,
approvals, authorizations, registrations or qualifications as may be required under the Exchange Act, and applicable state securities
laws in connection with the distribution of the Rights Shares during the Rights Offering and any Standby Placement Period, no consent,
approval, authorization or order of, or filing or registration with, any Governmental Authority is required for the execution, delivery
and performance of this Agreement by the Company and the consummation by it of the transactions contemplated hereby.
(p) Other
than the Participating Warrants (as defined in the Prospectus), there are no contracts, agreements or understandings between the Company
and any Person granting such Person the right to require the Company to include such securities in the securities registered pursuant
to the Registration Statement. No holder of any security of the Company has any rights of rescission or similar rights with respect to
such securities held by them.
(q) The
Company has not sustained, since the date of the latest balance sheet included in the Prospectus or after such date and as disclosed in
the Prospectus, any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered
by insurance, or from any labor dispute or court or governmental action, order or decree; and, since such date or after such date and
as disclosed in the Prospectus, there has not been any material adverse change or any development affecting the general affairs, management,
financial position, stockholders’ equity or results of operations the Company (a “Material Adverse Change”).
Since the date of the latest balance sheet presented in the Prospectus, the Company has not incurred or undertaken any liabilities or
obligations, whether direct or indirect, liquidated or contingent, matured or unmatured, or entered into any transactions, including any
acquisition or disposition of any business or asset, which are material to the Company, except for liabilities, obligations and transactions
which are disclosed in the Registration Statement, any Preliminary Prospectus and the Prospectus.
(r) Marcum
LLP and MSL, P.A. (collectively, the “Auditors”), whose reports relating to the Company are incorporated by
reference in the Registration Statement, are independent registered public accountants as required by the Securities Act, the Exchange
Act and the rules and regulations promulgated by the Public Company Accounting Oversight Board (the “PCAOB”).
The Auditors, to the Company’s knowledge, are duly registered and in good standing with the PCAOB. The Auditors have not, during
the periods covered by the financial statements included in the Registration Statement, any Preliminary Prospectus and the Prospectus,
provided to the Company or its Subsidiaries any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.
(s) The
financial statements, including the notes thereto, and any supporting schedules included (by incorporation or otherwise) in the Registration
Statement, any Preliminary Prospectus and the Prospectus present fairly, in all material respects, the financial position as of the dates
indicated and the cash flows and results of operations for the periods specified of the Company. Except as otherwise stated in the Registration
Statement, any Preliminary Prospectus and the Prospectus, said financial statements have been prepared in conformity with United States
generally accepted accounting principles applied on a consistent basis throughout the periods involved. Any supporting schedules included
in the Registration Statement, any Preliminary Prospectus and the Prospectus present fairly, in all material respects, the information
required to be stated therein. No other financial statements or supporting schedules are required to be included or incorporated by reference
in the Registration Statement. The other financial and statistical information included in the Registration Statement, any Preliminary
Prospectus and the Prospectus present fairly, in all material respects, the information included therein and have been prepared on a basis
consistent with that of the financial statements that are included in the Registration Statement, such Preliminary Prospectus and the
Prospectus and the books and records of the respective entities presented therein.
(t) There
are no pro forma or as adjusted financial statements which are required to be included in the Registration Statement, any Preliminary
Prospectus and the Prospectus in accordance with Regulation S-X under the Securities Act which have not been included as so required.
The pro forma and/or as adjusted financial information included in the Registration Statement, any Preliminary Prospectus and the Prospectus
has been properly compiled and prepared in accordance with the applicable requirements of the Securities Act and include all adjustments
necessary to present fairly, in all material respects, in accordance with generally accepted accounting principles the pro forma and as
adjusted financial position of the respective entity or entities presented therein at the respective dates indicated and their cash flows
and the results of operations for the respective periods specified. The assumptions used in preparing the pro forma and as adjusted financial
information included in the Registration Statement, any Preliminary Prospectus and the Prospectus provide a reasonable basis for presenting
the significant effects directly attributable to the transactions or events described therein. The related pro forma and pro forma as
adjusted adjustments give appropriate effect to those assumptions; and the pro forma and pro forma as adjusted financial information reflect
the proper application of those adjustments to the corresponding historical financial statement amounts.
(u) The
statistical, industry-related and market-related data included in the Registration Statement, any Preliminary Prospectus and the Prospectus
are based on or derived from sources which the Company reasonably believes are reliable and accurate, and such data agree with the sources
from which they are derived. All applicable third-party consents have been obtained in order for such data to be included in the Registration
Statement and the Prospectus.
(v) The
Company maintains a system of internal accounting and other controls sufficient to provide reasonable assurances that: (i) transactions
are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with United States generally accepted accounting principles and to maintain accountability
for assets, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv)
the recorded accounting for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect
to any differences.
(w) The
Company’s Board of Directors has validly appointed an audit committee, compensation committee and nominating and corporate governance
committee whose composition satisfies the requirements of the rules and regulations of the Commission and Nasdaq, and the Company’s
Board of Directors and/or audit committee, compensation committee and the nominating corporate governance committee has each adopted a
charter as described in the Registration Statement, and such charters are in full force and effect as of the date hereof. Neither the
Company’s Board of Directors nor the audit committee thereof has been informed of: (i) except as disclosed in the Registration Statement
and the Prospectus, any significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial
information; or (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in the
Company’s internal control over financial reporting.
(x) The
Company is in material compliance with the provisions of the Sarbanes-Oxley Act of 2002, as amended (“Sarbanes-Oxley”),
applicable to the Company, and the rules and regulations promulgated thereunder and related or similar rules and regulations promulgated
by any other Governmental Authority or self-regulatory entity or agency, except for violations which, singly or in the aggregate, are
disclosed in the Prospectus or would not reasonably be expected to have a Material Adverse Effect.
(y) No
relationship, direct or indirect, exists between or among any of the Company or any Affiliate of the Company, on the one hand, and any
director, officer, stockholder, customer or supplier of the Company or any Affiliate of the Company, on the other hand, which is required
by the Securities Act or the Exchange Act to be described in the Registration Statement or the Prospectus which is not so described as
required. Except as disclosed in the Registration Statement and the Prospectus, there are no outstanding loans, advances (except normal
advances for business expenses in the ordinary course of business) or guarantees of indebtedness by the Company to or for the benefit
of any of the officers or directors of the Company or any of their respective family members. The Company has not, in violation of Sarbanes-Oxley,
directly or indirectly, including through any Affiliate of the Company (other than as permitted under Sarbanes-Oxley for depositary institutions),
extended or maintained credit, arranged for the extension of credit, or renewed an extension of credit, in the form of a personal loan
to or for any director or executive officer of the Company.
(z) Subject
to the parenthetical set forth below, there are no legal or governmental proceedings pending to which the Company or any of its Subsidiaries
is a party or of which any property or asset of the Company or any of its Subsidiaries is the subject, including without limitation any
proceeding before the FDA or comparable federal, state local or foreign governmental bodies (it being understood that the interaction
between the Company and the FDA and such comparable governmental bodies relating to the clinical development and product approval process
shall not be deemed proceeding for the purposes of this representation), which, if determined adversely to the Company, are reasonably
likely to have a Material Adverse Effect; and to the Company’s knowledge, except as disclosed in the Prospectus, no such proceedings
are threatened or contemplated by Governmental Authorities or threatened by others.
(aa) The Company has filed,
or to the extent disputed has set aside any necessary accruals, with respect to all necessary federal, state and foreign income and franchise
tax returns and have paid all taxes required to be paid by any of them and, if due and payable, any related or similar assessment, fine
or penalty levied against any of them, except where the failure to make such filings or make such payments, either individually or in
the aggregate, could not reasonably be expected to have, a Material Adverse Effect. The Company has made adequate charges, accruals and
reserves in its financial statements above in respect of all federal, state and foreign income and franchise taxes for all periods as
to which the tax liability of the Company or any of its Subsidiaries has not been finally determined.
(bb) The Company maintains
insurance of the types and in the amounts which the Company believes to be reasonable and sufficient for a company of its size operating
in the Company’s industry, including, but not limited to: (i) directors’ and officers’ insurance (including insurance
covering the Company, its directors and officers for liabilities or losses arising in connection with the Rights Offering, including,
without limitation, liabilities or losses arising under the Securities Act, the Exchange Act and applicable foreign securities laws),
(ii) insurance covering real and personal property owned or leased against theft, damage, destruction, acts of vandalism and all other
risks customarily insured against and (iii) business interruption insurance. There are no claims by the Company under any policy or instrument
described in this paragraph as to which any insurance company is denying liability or defending under a reservation of rights clause.
All of the insurance policies described in this paragraph are in full force and effect. The Company has not been refused any insurance
coverage sought or applied for, and the Company has no reason to believe that it will not be able to renew its existing insurance coverage
as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at
a cost that would not reasonably be expected to have a Material Adverse Effect.
(cc) To the Company’s
knowledge, the Company owns or possesses or has the right to use all patents, patent rights, patent applications, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks, trade names, service names and other intellectual property (collectively, “Intellectual
Property”) necessary to carry on its business as described in the Prospectus and as proposed to be conducted; the Company
has not received any written notice and is not otherwise aware of any infringement of or conflict with asserted rights of others with
respect to any Intellectual Property or of any facts or circumstances which would render any Intellectual Property invalid or inadequate
to protect the interests of the Company, and which asserted infringement or conflict (if the subject of any unfavorable decision, ruling
or finding) or invalidity or inadequacy, individually or in the aggregate, could reasonably be expected to result in a Material Adverse
Effect. To the Company’s knowledge, all former and current employees of the Company, all other agents, consultants and contractors
of the Company who contributed to or participated in the conception or development of any Intellectual Property for the Company) have
executed written contracts or agreements that assign to the Company all rights to any inventions, improvements, discoveries or information
relating to the business of the Company, including without limitation all Intellectual Property owned, controlled by or in the possession
of the Company. To the Company’s knowledge, there is no unauthorized use, infringement or misappropriation of any of the Intellectual
Property by any third party, employee or former employee. To the Company’s knowledge, each agreement and instrument (each, a “License
Agreement”) pursuant to which any Intellectual Property is licensed to the Company is in full force and effect, has been
duly authorized, executed and delivered by, and is a valid and binding agreement of, the Company, enforceable against the Company in accordance
with its terms, except as enforcement thereof may be subject to bankruptcy, insolvency or other similar laws relating to or affecting
creditors’ rights generally or by general equitable principles; the Company is in material compliance with its obligations under
all License Agreements and, to the Company’s knowledge, all other parties to any of the License Agreements are in material compliance
with all of their respective obligations thereunder; no event or condition has occurred or exists that gives or would give any party to
any License Agreement the right, either immediately or with notice or passage of time or both, to terminate or limit (in whole or in part)
any such License Agreement or any rights of the Company thereunder, to exercise any of such party’s remedies thereunder, or to take
any action that would adversely affect any rights of the Company thereunder or that might reasonably be expected to have a Material Adverse
Effect, and the Company is not aware of any facts or circumstances that would result in any of the foregoing or give any party to any
License Agreement any such right; and the Company has not received any notice of default, breach or non-compliance under any License Agreement.
(dd) The Company: (i) is
in full compliance with all existing privacy laws, statutes, rules, regulations or industry guidance applicable to the ownership, development,
manufacture, packaging, processing, use, distribution, marketing, labeling, promotion, sale, offer for sale, storage, import, export or
disposal of any product manufactured, distributed or sold by the Company or any component thereof (such laws, statutes, rules, regulations
or guidance, collectively, “Applicable Laws”); (ii) is, and, to the Company’s knowledge, its facility
and operations of its suppliers are, in compliance with all applicable federal, state, and local laws, regulations, orders and decrees
governing its business as prescribed by the FDA; (iii) has not received any written notice of adverse finding, warning letter, untitled
letter or other correspondence or notice from any Governmental Authority alleging or asserting noncompliance with any Applicable Laws
or any licenses, certificates, approvals, clearances, authorizations, permits and supplements or amendments thereto required by any such
Applicable Laws (“Authorizations”); (iv) possesses all Authorizations and such Authorizations are valid and
in full force and effect, and the Company is not in violation of any term of any such Authorizations; (v) has not received written notice
of any claim, suit, proceeding, hearing, enforcement, audit, investigation, arbitration or other action from any Governmental Authority
alleging that any product operation or activity is in violation of any Applicable Laws or Authorizations and has no knowledge that any
such Governmental Authority is considering any such claim, suit, proceeding, hearing, enforcement, audit, investigation, arbitration or
other action; (vi) has not received written notice that any Governmental Authority has taken, is taking or intends to take action to limit,
suspend, modify or revoke any Authorizations and has no knowledge that any such Governmental Authority is considering such action; (vii)
has filed, obtained, maintained or submitted all material reports, documents, forms, notices, applications, records, claims, submissions
and supplements or amendments as required by any Applicable Laws or Authorizations and that all such material reports, documents, forms,
notices, applications, records, claims, submissions and supplements or amendments were complete and correct in all material respects on
the date filed (or were corrected or supplemented by a subsequent submission), except, in the case of each of clauses (i), (ii), (iii),(iv)
and (v), for any default, violation or event that would not, individually or in the aggregate, have or reasonably be expected to have
a Material Adverse Effect.
(ee) The studies and tests
conducted or, to the Company’s knowledge, sponsored by or on behalf of the Company (the “Studies and Tests”)
that are described or referred to in any Preliminary Prospectus, the Prospectus and the Registration Statement were and, if still pending,
are being conducted in accordance with experimental protocols, procedures and controls pursuant to accepted professional scientific standards
and all Applicable Laws and Authorizations; the descriptions of the results of such studies, tests and trials contained in any Preliminary
Prospectus, the Prospectus and the Registration Statement are accurate and complete in all material respects and fairly present the data
derived from such studies, tests and trials. The Company is not aware of any studies or tests, the results of which the Company believes
reasonably call into question the study or test described or referred to in any Preliminary Prospectus, the Prospectus and the Registration
Statement when viewed in the context in which such results are described. The Company has not received any written notices or correspondence
from the FDA or any foreign, state or local governmental body exercising comparable authority suggesting or requiring a clinical hold,
termination, suspension or material modification of the Studies and Tests and that such clinical hold, termination, suspension or material
modification would reasonably be expected to have a Material Adverse Effect. The Company has obtained (or caused to be obtained) informed
consent by or on behalf of each human subject who participated in Studies and Tests. In using or disclosing patient information received
by the Company in connection with the Studies and Tests, the Company has complied in all material respects with all applicable laws and
regulatory rules, including, without limitation, the Health Insurance Portability and Accountability Act of 1996 and the rules and regulations
thereunder. To the Company’s knowledge, none of the Studies and Tests involved any investigator who has been disqualified as a clinical
investigator or has been found by the FDA to have engaged in scientific misconduct or debarred or excluded from participation in any governmental
health care payment program. There has not been any violation of applicable law or regulation by the Company in its product development
efforts, submissions or reports to any regulatory authority that could reasonably be expected to require investigation, corrective action
or enforcement action, except where such violation would not, singly or in the aggregate, reasonably be expected to result in a Material
Adverse Effect.
(ff) Neither the Company
nor, to the Company’s knowledge, any of the Company’s directors, officers or employees has violated: (i) the Bank Secrecy
Act, as amended, (ii) the Money Laundering Control Act of 1986, as amended, (iii) the Foreign Corrupt Practices Act of 1977, as amended,
or (iv) the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT
ACT) Act of 2001, and/or the rules and regulations promulgated under any such law, or any successor law, except for such violations which,
singly or in the aggregate, would not reasonably be expected to have a Material Adverse Effect. No action, suit or proceeding by or before
any Governmental Authority involving the Company with respect to any of the foregoing laws is pending or, to the Company’s knowledge,
threatened.
(gg) Neither the Company
nor any of its Affiliates has, prior to the date hereof, made any offer or sale of any securities which are required to be “integrated”
pursuant to the Securities Act with the offer and sale of the Rights Shares pursuant to the Registration Statement.
(hh) Except as described
in the Registration Statement and the Prospectus, there are no claims, payments, arrangements, agreements or understandings relating
to the payment of a finder’s, consulting or origination fee or other compensation by the Company with respect to the issuance or
exercise of the Rights or the sale of the Rights Shares or any other arrangements, agreements or understandings of the Company or, to
the Company’s knowledge, the Company’s officers, directors and employees or Affiliates that may affect the Dealer-Manager’s
compensation, as determined by the Financial Industry Regulatory Authority, Inc. (“FINRA”). Except as previously
disclosed by the Company to the Dealer-Manager in writing, no officer, director, or beneficial owner of 5% or more of any class of the
Company’s securities (whether debt or equity, registered or unregistered, regardless of the time acquired or the source from which
derived) or any Affiliate thereof is a member of FINRA. No proceeds from the exercise of the Rights will be paid to any FINRA member,
or any Persons associated or affiliated with a member of FINRA, except as specifically contemplated herein. Except as previously disclosed
by the Company to the Dealer-Manager, no Person to whom securities of the Company have been privately issued within the 180-day period
prior to the initial filing date of the Registration Statement has any relationship or affiliation or association with any member of
FINRA.
(ii) There
are no contracts, agreements or understandings between the Company and any Person that would give rise to a valid claim against the Company
or the Dealer-Manager for a brokerage commission, finder’s fee or other like payment in connection with the transactions contemplated
by this Agreement. Other than the Dealer-Manager, the Company has not employed any brokers, dealers or underwriters in connection with
solicitation of exercise of Rights in the Rights Offering or the placement of unsubscribed Rights Shares during any Standby Placement
Period; and except as provided for in Sections 6 and 7 hereof, no other commissions, fees or discounts will be paid by the Company in
connection with solicitation of the exercise of Rights in the Rights Offering.
(jj) Neither the Company
nor, to the Company’s knowledge, any of the Company’s officers or directors, has at any time during the last five (5) years:
(i) made any unlawful contribution to any candidate for foreign office, or failed to disclose fully any contribution in violation of law,
or (ii) made any payment to any federal or state governmental officer or official, or other Person charged with similar public or quasi-public
duties, other than payments that are not prohibited by the laws of the United States of any jurisdiction thereof.
(kk) The Company has not
and will not, directly or indirectly through any officer, director or Affiliate of the Company: (i) taken any action designed to cause
or to result in, or that has constituted or which might reasonably be expected to constitute, the stabilization or manipulation of the
price of any security of the Company to facilitate the issuance of the Rights or the sale or resale of the Rights Shares, (ii) since the
filing of the Registration Statement sold, bid for or purchased, or paid any Person (other than the Dealer-Manager) any compensation for
soliciting exercises or purchases of, the Rights or the Rights Shares and (iii) until the later of the expiration of the Rights or the
completion of the distribution (within the meaning of Regulation M under the Exchange Act) of the Rights Shares, sell, bid for or purchase,
apply or agree to pay to any Person (other than the Dealer-Manager) any compensation for soliciting another to purchase any other securities
of the Company (except for the solicitation of the exercises of Rights pursuant to the Offer Documents). The foregoing shall not apply
to the offer, sale, agreement to sell or delivery with respect to (i) Rights Shares offered and sold upon exercise of the Rights, as described
in the Prospectus, or (ii) any shares of Common Stock sold pursuant to the Company’s existing employee benefit plans.
(ll) Each “forward-looking
statement” (within the meaning of Section 27A of the Securities Act or Section 21E of the Exchange Act) included
in the Registration Statement, any Preliminary Prospectus and the Prospectus has been made or reaffirmed with a reasonable basis and has
been disclosed in good faith.
As used in this Agreement, the term “the
Company’s knowledge” (or similar language) shall mean the actual knowledge of the officers of the Company who are
named in the Prospectus with the assumption that such officers shall have made reasonable and diligent inquiry of the matters presented
(with reference to what is customary and prudent for the applicable individuals in connection with the discharge by the applicable individuals
of their duties as officers or directors of the Company).
As used in this Agreement, references to matters
being “material” with respect to the Company or any matter relating to the Company shall mean a material item, event,
change, condition, status or effect related to the condition (financial or otherwise), properties, assets (including intangible assets),
liabilities, business, prospects (as such prospects are disclosed or described in any preliminary prospectus or the prospectus), operations
or results of operations of the company, taken as a whole.
6. Compensation.
(a) In
consideration for its services in the Rights Offering, the Dealer-Manager shall receive a cash fee equal to 6.0% of the gross dollar amount
received by the Company from any cash exercise of the Rights issued to investors in the Rights Offering as a commission, a non-accountable
expense allowance of 0.8%, and an out-of-pocket accountable expense allowance of 0.2%. The Company has previously paid the Dealer-Manager
a $25,000 advance against such out-of-pocket expenses (the “Advance”). If the Rights Offering is not consummated,
the portion of the Advance not used for the Dealer-Manager’s actual out-of-pocket expenses shall be promptly reimbursed to the Company
as required under FINRA Rule 5110(g)(4)(A). All payments to be made by the Company pursuant to this Section 6(a) shall be made at the
Closing by wire transfer of immediately available funds upon the consummation of the subscriptions for Rights Shares pursuant to the exercise
of Rights (the “Closing Date”).
(b) For
any unsubscribed Rights Shares placed by the Dealer-Manager during any Standby Placement Period, the Dealer-Manager shall receive a placement
fee equal to 6.0%, in lieu of the dealer-manager fee, along with continuing non-accountable and accountable expense allowances of 0.8%
and 0.2%, respectively, with such placement fee and expenses to be calculated in respect of the total gross proceeds paid to and received
by the Company for subscriptions accepted by the Company from investors in connection with such placement and such placement fee and expenses
not to exceed the aggregate amounts that would have been otherwise received by the Dealer-Manager if the Rights Offering were fully subscribed.
Neither the placement fee nor expense allowances in connection with the placement of shares by the Dealer-Manager during any Standby Placement
Period shall be payable with respect to any securities purchased as result of the exercise of any Basic Subscription Right or Over-Subscription
Privilege. All payments to be made by the Company pursuant to this Section 6(b) shall be made, with respect to the post-Rights Offering
placement of unsubscribed Rights Shares by the Dealer-Manager, at the closing of the issuance and purchase under such placement, by wire
transfer of immediately available funds.
(c) Notwithstanding
the foregoing and subject to its entry into an acceptable form of selected dealer agreement(s) with other registered broker-dealers in
connection with the exercise of the Rights and/or placement of the Rights Shares, the Dealer-Manager will allocate to any such other registered
broker-dealer a selected dealer fee, constituting a portion of its dealer-manager fee or placement fee, as applicable, equal to 3% of
the total gross proceeds paid to and received by the Company for subscriptions accepted by the Company from clients of such other broker-dealers
pursuant to the exercise of their Rights in the Rights Offering or purchase of unsubscribed Rights Shares during any Standby Placement
Period, as applicable.
(d) If
the total gross proceeds from the Rights Offering are equal to or greater than $10,000,000, then the Company shall grant to the Dealer-Manager
a right of first refusal for a period ending on December 31, 2024 (the “ROFR”) to act as the Company’s
investment banker on subsequent equity or equity-linked offerings by the Company (collectively, “Future Services”).
In the event the Company notifies the Dealer-Manager of its intention to pursue an activity that would enable the Dealer-Manager to exercise
its ROFR to provide Future Services, the Dealer-Manager shall notify the Company of its election to provide such Future Services, including
notification of the compensation and other terms to which the Dealer-Manager shall be entitled, within fourteen (14) days after the Dealer-Manager
receives written notice from the Company; provided that if the Company wishes to terminate the ROFR, the Company may pay Lafferty
one percent (1%) of the gross proceeds raised in all aggregate offerings under the Engagement Letter pursuant to FINRA Rule 5110. In the
event the Company engages the Dealer-Manager to provide such Future Services, the Dealer-Manager will be compensated consistent with the
compensation in this Agreement, unless mutually agreed otherwise by the Company and the Dealer-Manager. Notwithstanding anything to the
contrary contained herein, the exercise of the right of termination for cause by the Company in compliance with FINRA Rule 5110(g)(5)(B)(i)
shall eliminate the Company’s obligations with respect to the provisions in this Section 6(d) relating to the ROFR in accordance
with FINRA Rule 5110(g)(5)(B)(ii).
7. Expenses.
Subject to Section 6 hereof, and notwithstanding anything to the contrary contained in the Engagement Letter, the Company shall pay or
cause to be paid:
(a) all
expenses (including any taxes) incurred by the Company in connection with the Rights Offering and the authorization, preparation, issuance,
execution, authentication and delivery of the Rights and the Rights Shares;
(b) all
fees, expenses and disbursements of the Company’s accountants, legal counsel and other third party advisors;
(c) all
reasonable and documented costs and expenses of the Dealer-Manager as set forth in Section 6 above and reimbursable upon any termination
of this Agreement only as permitted by FINRA Rule 5110(g)(4)(A);
(d) all
agreed-upon fees and expenses of the Subscription Agent and the Information Agent;
(e) all
fees, expenses and disbursements (including, without limitation, fees and expenses of the Company’s accountants and counsel) in
connection with the preparation, printing, filing, delivery and shipping of the Registration Statement (including the financial statements
therein and all amendments and exhibits thereto), each Preliminary Prospectus, the Prospectus, the other Offer Documents and any amendments
or supplements of the foregoing and any printing, delivery and shipping of this Agreement to any organization of soliciting dealers, if
any, to the members thereof by mail, fax or other means of communications;
(f) all
reasonable fees, expenses and disbursements, if any, relating to the registration or qualification of the Rights and the Rights Shares
under the “blue sky” securities laws of any states or other jurisdictions;
(g) all
filing fees of the Commission;
(h) all
filing fees relating to the review of the Rights Offering by FINRA;
(i) any
applicable listing or other fees;
(j) the
cost of printing certificates representing the Rights and the Rights Shares;
(k) the
cost and charges of the Company’s transfer agent(s) or registrar(s); and
(l) all
other costs and expenses incident to the performance of the Company’s obligations hereunder for which provision is not otherwise
made in this Section 7.
All payments to be made by
the Company pursuant to this Section 7 shall be made promptly after the termination or expiration of the Rights Offering or, if later,
promptly after the related fees, expenses or charges accrue and an invoice therefor is sent by the Dealer-Manager. The Company shall perform
its obligations set forth in this Section 7 whether or not the Rights Offering commences or any Rights are exercised pursuant to the Rights
Offering, except that the Dealer-Manager’s non-accountable expenses may only be reimbursed upon Closing. For the avoidance of doubt,
except as reimbursed pursuant to the accountable expense allowance and the non-accountable allowance, the Dealer-Manager shall be responsible
for expenses it incurs with respect to the performance of its obligations under this Agreement, including without limitation expenses
it incurs with respect to travel and lodging expenses in connection with “roadshow” trips and legal counsel and other third
parties engaged by the Dealer-Manager.
8. Stockholder
Lists; Subscription Agent; Information Agent.
(a) The
Company will cause the Dealer-Manager to be provided with any cards or lists showing the names and addresses of, and the number of shares
of Class A Common Stock held by or beneficially owned by, the holders of shares of Class A Common Stock, Class B Common Stock and Warrants
as of a recent date and will use its best efforts to cause the Dealer-Manager to be advised from time to time during the period, as the
Dealer-Manager shall request, of the Rights Offering as to any transfers of record of shares of Class A Common Stock.
(b) The
Company (i) has arranged for the Subscription Agent to serve as subscription and escrow agent in connection with the Rights Offering,
(ii) will arrange for the Subscription Agent to advise the Dealer-Manager regularly as to such matters as the Dealer-Manager may
reasonably request, including the number of Rights that have been exercised, and (iii) will arrange for the Subscription Agent to
be responsible for receiving subscription funds paid.
(c) The
Company has arranged for the Information Agent to serve as the information agent in connection with the Rights Offering (together with
the Subscription Agent, the “Agents”) and to perform services in connection with the Rights Offering that are
customary for an information agent.
9. Covenants
of the Company. The Company covenants and agrees with the Dealer-Manager:
(a) To
use its best efforts to cause the Registration Statement and any amendments thereto to become effective; to advise the Dealer-Manager,
promptly after it receives notice thereof, of the time when the Registration Statement, or any amendment thereto, becomes effective or
any supplement to the Prospectus or any amended Prospectus has been filed and to furnish the Dealer-Manager with copies thereof; to prepare
a Prospectus in a form approved by the Dealer-Manager (such approval not to be unreasonably withheld or delayed) and to file such Prospectus
pursuant to Rule 424(b) under the Securities Act within the time prescribed by such rule; to advise the Dealer-Manager, promptly after
it receives notice thereof, of the issuance by the Commission of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus, of the suspension of the qualification of the Rights for offering or sale in any jurisdiction,
of the initiation or threatening of any proceeding for any such purpose, or of any request by the Commission for the amending or supplementing
of the Registration Statement or the Prospectus or for additional information; and, in the event of the issuance of any stop order or
of any order preventing or suspending the use of any Preliminary Prospectus or the Prospectus or suspending any such qualification, to
use promptly its reasonable best efforts to obtain its withdrawal.
(b) To
deliver promptly to the Dealer-Manager, at any such location as requested by the Dealer-Manager, such number of the following documents
as the Dealer-Manager shall reasonably request: (i) conformed copies of the Registration Statement as originally filed with the Commission
and each amendment thereto (in each case excluding exhibits other than this Agreement, any other Offer Documents filed as exhibits, the
computation of the ratio of earnings to fixed charges and the computation of per share earnings), (ii) each Preliminary Prospectus, the
Prospectus and any amended or supplemented Prospectus and (iii) any document incorporated by reference in the Prospectus (excluding exhibits
thereto); and, if the delivery of a prospectus is required at any time during which the Prospectus relating to the Rights or the Rights
Shares is required to be delivered under the Securities Act and if at such time any events shall have occurred as a result of which the
Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary during such period to amend or supplement the Prospectus or to file
under the Exchange Act any document incorporated by reference in the Prospectus in order to comply with the Securities Act or the Exchange
Act, to notify the Dealer-Manager and, upon its request, to file such document and to prepare and furnish without charge to the Dealer-Manager
as many copies as the Dealer-Manager may from time to time reasonably request of an amended or supplemented Prospectus which will correct
such statement or omission or effect such compliance.
(c) To
file promptly with the Commission any amendment to the Registration Statement or the Prospectus or any supplement to the Prospectus that
may, in the judgment of the Company or the Dealer-Manager, be necessary or advisable in connection with the distribution of the Rights
or the sale of the Rights Shares or be requested by the Commission.
(d) Prior
to filing with the Commission any: (i) Preliminary Prospectus, (ii) amendment to the Registration Statement, any document incorporated
by reference in the Prospectus or (iii) any Prospectus pursuant to Rule 424 of the Securities Act, to furnish a copy thereof to the Dealer-Manager
and counsel for the Dealer-Manager and obtain the consent, which does not have to be in written form, of the Dealer-Manager to the filing
(which consent shall not be unreasonably withheld).
(e) To
furnish to the Dealer-Manager copies of all materials not available via EDGAR furnished by the Company to its stockholders and all public
reports and all reports and financial statements furnished by the Company to the principal national securities exchange upon which any
of the Company’s securities may be listed pursuant to requirements of or agreements with such exchange or to the Commission pursuant
to the Exchange Act or any rule or regulation of the Commission thereunder.
(f) To
qualify or register the Rights and the Rights Shares for sale under (or obtain exemptions from the application of) the state securities
or blue sky laws of those jurisdictions designated by the Dealer-Manager, the Company shall comply with such laws and shall continue such
qualifications, registrations and exemptions in effect so long as required for the distribution of the Rights and the Rights Shares, as
applicable. The Company shall not be required to qualify as a foreign corporation or to take any action that would subject it to general
service of process in any such jurisdiction where it is not presently qualified or where it would be subject to taxation as a foreign
corporation. The Company will advise the Dealer-Manager promptly of the suspension of the qualification or registration of (or any such
exemption relating to) the Rights and the Rights Shares for offering, sale or trading in any jurisdiction or any initiation or threat
of any proceeding for any such purpose, and in the event of the issuance of any order suspending such qualification, registration or exemption,
the Company shall use its best efforts to obtain the withdrawal thereof at the earliest possible moment.
(g) To
apply the net proceeds from the exercise of the Rights in the manner described under the caption “Use of Proceeds” in the
Prospectus.
(h) Prior
to the Effective Date of the Registration Statement, to list for trading the Rights and the Rights Shares on Nasdaq and to maintain the
listing of the Rights and the Rights Shares on Nasdaq until the business day prior to the Expiration Date.
(i) To
take such steps as shall be necessary to ensure that the Company shall not become an “investment company” within the meaning
of such term under the Investment Company Act of 1940 and the rules and regulations of the Commission thereunder.
(j) To
advise the Dealer-Manager, directly or through the Subscription Agent, from time to time, as the Dealer-Manager shall request, of the
number of Rights Shares subscribed for, and arrange for the Subscription Agent to furnish the Dealer-Manager with copies of written reports
it furnishes to the Company concerning the Rights Offering.
(k) To
commence mailing the Offer Documents to record holders of the Class A Common Stock, Class B Common Stock and Warrants not later than the
second (2nd) business day following the record date for the Rights Offering, and to complete such mailing as soon as practicable.
(l) To
reserve and keep available for issue upon (i) the exercise of the Rights and (ii) the placement of unsubscribed Rights Shares Stock during
the Standby Placement Period such number of authorized but unissued shares of Class A Common Stock as will be sufficient to permit the
exercise in full of all Rights and the subsequent placement of all unsubscribed Rights Shares, except as otherwise contemplated by the
Prospectus.
(m) To
not take, directly or indirectly, any action designed to cause or to result in, or that has constituted or which might reasonably be expected
to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the issuance of the Rights
or the sale or resale of the Rights Shares, including during the Rights Offering and any Standby Placement Period.
10. Conditions
of Dealer-Manager’s Obligations. The obligations of the Dealer-Manager hereunder are subject to (and the occurrence of any Closing
shall be conditioned upon) the accuracy, as of the date hereof and at all times during the Rights Offering and any Standby Placement Period,
of the representations and warranties of the Company contained herein, to the performance by the Company of its obligations hereunder
and to the following additional conditions:
(a) (i)
The Registration Statement shall have become effective and the Prospectus shall have been timely filed with the Commission in accordance
with the Securities Act; (ii) all post-effective amendments to the Registration Statement shall have become effective; (iii) no stop order
suspending the effectiveness of the Registration Statement or any amendment or supplement thereto shall have been issued and no proceedings
for the issuance of any such order shall have been initiated or threatened, and (iv) any request of the Commission for additional information
(to be included in the Registration Statement or the Prospectus or otherwise) shall have been disclosed to the Dealer-Manager and complied
with to the Dealer-Manager’s reasonable satisfaction.
(b) The
Dealer-Manager shall not have been advised by the Company or shall have discovered and disclosed to the Company that the Registration
Statement or the Prospectus or any amendment or supplement thereto, contains an untrue statement of fact which in the Dealer-Manager’s
opinion, or in the opinion of counsel to the Dealer-Manager, is material, or omits to state a fact which, in the Dealer-Manager’s
opinion, or in the opinion of counsel to the Dealer-Manager, is material and is required to be stated therein or is necessary to make
the statements therein not misleading and that has not been corrected or disclosed in one or more amendments to the Registration Statement
or the Prospectus.
(c) All
corporate proceedings and other legal matters incident to the authorization, form and validity of this Agreement, the Rights, the Rights
Shares, the Registration Statement and the Prospectus, and all other legal matters relating to this Agreement and the transactions contemplated
hereby shall be reasonably satisfactory in all material respects to counsel for the Dealer-Manager, and the Company shall have furnished
to such counsel all documents and information that they may reasonably request to enable them to pass upon such matters.
(d) The
Company shall have delivered an executed Lock-Up Agreement from each of the Company’s officers and directors.
(e) On
the Closing Date, there shall have been furnished to the Dealer-Manager the signed opinion and negative assurance letter (addressed to
the Dealer-Manager) of Buchanan Ingersoll & Rooney PC, counsel for the Company, dated as of the Closing Date and in form and substance
reasonably satisfactory to counsel for the Dealer-Manager.
(f) The
Company shall have furnished to the Dealer-Manager a certificate, dated as of the Closing Date, of its Chief Executive Officer and Chief
Financial Officer stating that:
| i. | To their knowledge after reasonable investigation, the representations, warranties, covenants and agreements
of the Company hereof are true and correct in all material respects; |
| ii. | The conditions to Closing set forth in this Agreement have been fulfilled; |
| iii. | The Company has not sustained any material loss or interference with its business, whether or not covered
by insurance, or from any labor dispute or any legal or governmental proceeding; |
| iv. | Subsequent to the respective dates as of which information is given in the Registration Statement and
the Prospectus, there has not been any Material Adverse Change; and |
| v. | They have carefully examined the Registration Statement and the Prospectus and, in their opinion (A) the
Registration Statement and the Prospectus, as of the Effective Date, did not include any untrue statement of a material fact and did not
omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and (B) since
the Effective Date, no event has occurred which should have been set forth in a supplement or amendment to the Registration Statement
or the Prospectus. |
(g) No
event has occurred at the Company since the date of the latest audited financial statements included in the Prospectus any Material Adverse
Change, the effect of which is, in the judgment of the Dealer-Manager, so material and adverse as to make it impracticable or inadvisable
to proceed with the Rights Offering.
(h) Neither
FINRA nor Nasdaq shall have objected to the Right Offering.
(i) The
Class A Common Stock shall then be listed and trading on Nasdaq and, prior to their issuance, Nasdaq shall have approved the listing of
the Rights and the Rights Shares, subject only to official notice of issuance.
(j) All
opinions, letters, evidence and certificates mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Dealer-Manager. If any of the conditions
specified in this Section 10 shall not have been fulfilled when and as required by this Agreement, this Agreement and all obligations
of the Dealer-Manager hereunder may be canceled at, or at any time during the Rights Offering or Standby Placement Period, as applicable,
by the Dealer-Manager. Any such cancellation shall be without liability of the Dealer-Manager to the Company. Notice of such cancellation
shall be given the Company in writing, or by telegraph or telephone and confirmed in writing.
11. Indemnification
and Contribution.
(a) The
Company agrees to indemnify and hold harmless the Dealer-Manager and its affiliates and any officer, director, employee or agent of the
Dealer-Manager or any such affiliates and any Person controlling (within the meaning of Section 15 of the Securities Act and Section 20
of the Exchange Act) the Dealer-Manager or any of such affiliates (collectively, the “Indemnified Parties”)
from and against any and all losses, claims, damages, liabilities, expenses and actions (including stockholder actions, in respect thereof)
whatsoever, under the Securities Act or otherwise (as incurred or suffered and including, but not limited to, any and all legal or other
expenses incurred in connection with investigating, preparing to defend or defending any lawsuit, claim or other proceeding, commenced
or threatened, whether or not resulting in any liability, which legal or other expenses shall be reimbursed by the Company promptly after
receipt of any invoices therefore from the Dealer-Manager), (A) arising out of or based upon: (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or any amendment thereto, or the omission or alleged omission to
state therein a material fact required to be stated therein or necessary in order to make the statements therein not misleading (other
than statements or omissions made in reliance upon and in conformity with the Dealer-Manager Information), (ii) any untrue statement or
alleged untrue statement of a material fact contained in any Offer Document not the Registration Statement (or any amendment or supplement
thereto), in any other solicitation material used by the Company or authorized by it for use in connection with the Rights Offering, or
in any blue sky application or other document prepared or executed by the Company (or based on any written information furnished by the
Company) specifically for the purpose of qualifying any or all of the Rights or the Rights Shares under the securities laws of any state
or other jurisdiction (any such application, document or information being hereinafter called a “Blue Sky Application”)
or arising out of or based upon the omission or alleged omission to state in any such document a material fact required to be stated therein
or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading (other
than statements or omissions made in reliance upon and in conformity with the Dealer-Manager Information), (iii) any withdrawal or termination
by the Company of, or failure by the Company to make or consummate, the Rights Offering, (iv) any actions taken or omitted to be taken
by an Indemnified Party with the express consent of the Company or in conformity with actions taken or omitted to be taken by the Company
or (v) any failure by the Company to comply with any agreement or covenant contained in this Agreement, or (B) arising out of, relating
to or in connection with or alleged to arise out of, relate to or be in connection with, the Rights Offering, any of the other transactions
contemplated thereby or the performance of the Dealer-Manager’s services to the Company with respect to the Rights Offering and
the placement of unsubscribed Rights Shares during any Standby Placement Period; provided, however, that in the case of
clause (B) only, the Company shall not be responsible for any liabilities or expenses of any Indemnified Party that have resulted primarily
from such Indemnified Party’s (x) gross negligence, bad faith or willful misconduct in connection with any of the advice, actions,
inactions or services referred to herein or (y) use of any offering materials or information concerning the Company in connection with
the Rights Offering or placement of unsubscribed Rights Shares during any Standby Placement Period that were not authorized for such use
by the Company and which use constitutes gross negligence, bad faith or willful misconduct.
(b) Promptly
after receipt by an Indemnified Party of notice of any intention to commence an action, suit or proceeding or notice of the commencement
of any action, suit or proceeding, such Indemnified Party will, if a claim in respect thereof is to be made against in respect of any
matter for which indemnity may be sought pursuant hereto, promptly notify the Company in writing of the same. The Company shall, if requested
by an Indemnified Party, assume control of the defense of any such claim including the employment of counsel reasonably satisfactory to
the Indemnified Party, which counsel may also be counsel to the Company. An Indemnified Party may employ counsel to participate in the
defense of any such action provided, that the employment of such counsel shall be at the Indemnified Party’s own expense, unless
(i) the employment of such counsel has been authorized in writing by the Company, (ii) the Indemnified Party has reasonably concluded
(based upon advice of counsel to the Indemnified Party) that there may be legal defenses available to it or other Indemnified Parties
that are different from or in addition to those available to the Company, or that a conflict or potential conflict exists (based upon
advice of counsel to the Indemnified Party) between the Indemnified Party and the Company that makes it impossible or inadvisable for
counsel to the Indemnifying Party to conduct the defense of both the Company and the Indemnified Party (in which case the Company will
not have the right to direct the defense of such action on behalf of the Indemnified Party), or (iii) the Company has not in fact employed
counsel reasonably satisfactory to the Indemnified Party to assume the defense of such action within a reasonable time after receiving
notice of the action, suit or proceeding, in each of which cases the reasonable fees, disbursements and other charges of such counsel
will be at the expense of the Company; provided, further, that in no event shall the Company be required to pay fees and
expenses for more than one firm of attorneys representing Indemnified Parties unless the defense of one Indemnified Party is unique or
separate from that of another Indemnified Party subject to the same claim or action. Any failure or delay by an Indemnified Party to give
the notice referred to in this paragraph may affect such Indemnified Party’s right to be indemnified hereunder to the extent that
such failure or delay prejudices the Company’s ability to defend such action, suit or proceeding on behalf of such Indemnified Party,
or otherwise results in harm to the Company.
(c) If
the indemnification provided for in Section 11(a) is judicially determined to be unavailable (other than in accordance with the terms
hereof) to any Indemnified Party otherwise entitled to indemnity in respect of any losses, claims, damages or liabilities referred to
herein, then, in lieu of indemnifying such person hereunder, whether or not the Dealer-Manager is the person entitled to indemnification
or reimbursement, the Company shall contribute to the amount paid or payable by the Indemnified Party as a result of such losses, claims,
damages or liabilities (and expenses relating thereto) (i) in such proportion as is appropriate to reflect the relative benefits to the
Company, on the one hand, and the Dealer-Manager, on the other hand, of the Rights Offering or (ii) if the allocation provided for in
clause (i) above is not available, in such proportion as is appropriate to reflect not only the relative benefits referred to in such
clause (i) but also the relative fault of each of the Company and the Dealer-Manager, as well as any other relevant equitable considerations;
provided, however, in no event shall the Dealer-Manager’s aggregate contribution to the amount paid or payable exceed
the aggregate amount of fees actually received by the Dealer-Manager under this Agreement. For the purposes of this Agreement, the relative
benefits to the Company and to the Dealer-Manager of the engagement shall be deemed to be in the same proportion as (a) the total value
paid or contemplated to be paid or received or contemplated to be received by the Company in the Rights Offering, whether or not the Rights
Offering is consummated, bears to (b) the fees paid or to be paid to the Dealer-Manager under this Agreement.
(d) The
Company also agrees that neither the Dealer-Manager, nor any other Indemnified Party, shall have any liability to the Company for or in
connection with the Dealer-Manager’s engagement as Dealer-Manager, except for any such liability for losses, claims, damages, liabilities
or expenses incurred by the Company which have resulted primarily from the Dealer-Manager’s or Indemnified Party’s bad faith,
willful misconduct or gross negligence or the use of any offering material or information concerning the Company in connection with the
Rights Offering or the placement of unsubscribed Rights Shares during any Standby Placement Period which were not authorized for such
use. The foregoing agreement shall be in addition to any rights that the Dealer-Manager, the Company or any Indemnified Party may
have at common law or otherwise, including, but not limited to, any right to contribution. For the sole purpose of enforcing and
otherwise giving effect to the provisions of this Agreement, the Company hereby consents to personal jurisdiction and service and venue
in any court in which any claim which is subject to this agreement is brought against the Dealer-Manager or any other indemnified party.
(e) The
Company agrees that it will not, without the prior written consent of the Dealer-Manager, which consent shall not be unreasonably withheld,
settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding
in respect of which indemnification or contribution may be sought hereunder (whether or not the Dealer-Manager is an actual or potential
party to such claim, action, suit or proceeding) unless such settlement, compromise or consent (i) relates solely to the payment of monetary
damages and does not include any admission of liability on the part of the Dealer-Manager, and (ii) includes an unconditional release,
reasonably satisfactory in form and substance to the Dealer-Manager, releasing the Dealer-Manager from all liability arising out of such
claim, action, suit or proceeding.
(f) In
the event that an Indemnified Party is requested or required to appear as a witness in any action brought by or on behalf of or against
the Company in which such Indemnified Party is not named as a defendant, the Company agrees to promptly reimburse the Indemnified Party
on a monthly basis for all expenses reasonably incurred by it in connection with such Indemnified Party’s appearing and preparing
to appear as such a witness, including, without limitation, the reasonable fees and disbursements of its legal counsel.
(g) If
multiple claims are brought, and indemnification is permitted under applicable law and provided for under this Agreement with respect
to at least one of such claims, the Company agrees that any judgment or arbitration award shall be conclusively deemed to be based on
claims as to which indemnification is permitted and provided for, except to the extent the judgment or arbitrate award expressly states
that it, or any portion thereof, is based solely on a claim as to which indemnification is not available.
(h) The
Company agrees to reimburse each Indemnified Party for all expenses as they are incurred in connection with enforcing such Indemnified
Party’s rights hereunder.
12. Effective
Date of Agreement; Termination.
(a) This
Agreement shall become effective upon the later of the time on which the Dealer-Manager shall have received notification of the effectiveness
of the Registration Statement and the time which this Agreement shall have been executed by all of the parties hereto.
(b) This
Agreement shall terminate upon the earliest to occur of (i) the consummation, termination or withdrawal of the Rights Offering, (ii) the
expiration of any Standby Placement Period or (iii) withdrawal by the Dealer-Manager pursuant to Section 4.
(c) Any
termination of this Agreement pursuant to this Section 12 shall be without liability on the part of the Company or the Dealer-Manager,
except as otherwise provided in Section 11 hereof. Any notice referred to above may be given pursuant to Section 14 hereof.
13. Survival
of Certain Provisions. The agreements contained in Sections 3, 6, 7, 11 and 13 through 21 hereof and the representations, warranties
and agreements of the Company contained in Section 5 hereof shall survive the consummation of or failure to commence the Rights Offering
and shall remain in full force and effect, regardless of any termination or cancellation of this Agreement or any investigation made by
or on behalf of any indemnified party; provided that the Company’s obligations under Section 7 to reimburse the Dealer-Manager
for accountable expenses are subject to FINRA Rule 5110 (g)(4)(A) in that such expenses are only reimbursable to the extent actually incurred
and only if the Rights Offering actually closes.
14. Notices.
All notices and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to
have been duly given and effective upon receipt if (a) delivered personally, (b) sent by email transmission, or (c) sent by
nationally recognized overnight courier, to the parties hereto as follows:
If to the Dealer-Manager:
R.F. Lafferty & Co., Inc.
40 Wall Street, 29th Floor
New York, New York 10005
Attention: Mr. Richard H. Kreger,
Head of Investment Banking
Email: rkreger@rflafferty.com
With a copy (which shall not
constitute notice) to:
Olshan Frome Wolosky LLP
1325 Avenue of the Americas,
15th Floor
New York, New York 10019
Attention: Spencer G. Feldman,
Esq.
Email: sfeldman@olshanlaw.com
If to the Company:
Longeveron Inc.
1951 NW 7th Avenue,
Suite 520
Miami, Florida 33136
Attention: Mr. Wa’el Hashad, Chief Executive
Officer
Email: whashad@longeveron.com
With a copy (which shall not
constitute notice) to:
Buchanan Ingersoll & Rooney PC
Union Trust Building
510 Grant Street, Suite 200
Pittsburgh, Pennsylvania 15219
Attention: Jennifer Minter, Esq.
Email: jennifer.minter@bipc.com
15. Parties.
This Agreement shall inure to the benefit of and be binding upon the Dealer-Manager, the Company and their respective successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only those Persons, except that the representations, warranties,
indemnities and agreements of the Company contained in this Agreement shall also be deemed to be for the benefit of the Person or Persons,
if any, who control the Dealer-Manager within the meaning of Section 15 of the Securities Act. Nothing in this Agreement shall be construed
to give any Person, other than the Persons referred to in this Section, any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein.
16. Amendment.
This Agreement may not be amended or modified except in writing signed by each of the parties hereto.
17. Governing
Law; Venue. This Agreement shall be deemed to have been executed and delivered in New York and both this Agreement and the transactions
contemplated hereby shall be governed as to validity, interpretation, construction, effect, and in all other respects by the laws of the
State of New York, without regard to the conflicts of laws principles thereof (other than Section 5-1401 of The New York General Obligations
Law). Each of the Dealer-Manager and the Company: (a) agrees that any legal suit, action or proceeding arising out of or relating to this
Agreement and/or the transactions contemplated hereby shall be instituted exclusively in the Supreme Court of the State of New York, New
York County, or in the United States District Court for the Southern District of New York, (b) waives any objection which it may have
or hereafter to the venue of any such suit, action or proceeding, and (c) irrevocably consents to the jurisdiction of Supreme Court of
the State of New York, New York County, or in the United States District Court for the Southern District of New York in any such suit,
action or proceeding. Each of the Dealer-Manager and the Company further agrees to accept and acknowledge service of any and all process
which may be served in any such suit, action or proceeding in the Supreme Court of the State of New York, New York County, or in the United
States District Court for the Southern District of New York and agrees that service of process upon the Company mailed by certified mail
to the Company’s address or delivered by Federal Express via overnight delivery shall be deemed in every respect effective service
of process upon the Company, in any such suit, action or proceeding, and service of process upon the underwriters mailed by certified
mail to the Dealer-Manager’s address or delivered by Federal Express via overnight delivery shall be deemed in every respect effective
service process upon the Dealer-Manager, in any such suit, action or proceeding. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST
EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT THEY MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, THE REGISTRATION STATEMENT, ANY PRELIMINARY PROSPECTUS AND THE PROSPECTUS.
18. Entire
Agreement. This Agreement, together with the exhibit attached hereto, as the same may be amended from time to time in accordance with
the terms hereof, contains the entire agreement among the parties hereto relating to the subject matter hereof and there are no other
or further agreements outstanding not specifically mentioned herein. Notwithstanding anything herein to the contrary, the Engagement
Letter shall continue to be effective and the terms therein shall continue to survive and be enforceable by the parties thereto in accordance
with its terms.
19. Assignment.
Neither this Agreement nor any right or interest hereunder shall be assignable by the Company or the Dealer-Manager without the prior
written consent of the other party hereto; provided, however, that nothing in this Section 19 shall preclude the Dealer-Manager
from (i) assigning any rights hereunder to a corporation or other entity acquiring all or substantially all the assets and business, whether
by operation of law or otherwise, of the Dealer-Manager, provided such entity is a registered broker-dealer, or (ii) designating another
broker-dealer to perform services hereunder if the Dealer-Manager is unable to do so, provided such firm includes some or all of the Dealer-Manager’s
former investment banking staff, and such firm becomes subject to the same obligations and responsibilities as the Dealer-Manager as contemplated
herein as it relates to the delegated services.
20. Severability.
If any term or provision of this Agreement or the performance thereof shall be invalid or unenforceable to any extent, such invalidity
or unenforceability shall not affect or render invalid or unenforceable any other provision of this Agreement and this Agreement shall
be valid and enforced to the fullest extent permitted by law.
21. Headings.
The headings herein are inserted for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation
of, this Agreement.
22. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all such counterparts
shall together constitute one and the same instrument. Delivery of a signed counterpart of this Agreement by facsimile or other electronic
transmission (including .pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com)
shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
[Signature Page Follows]
If the foregoing correctly
sets forth your understanding, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute
a binding agreement among us.
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LONGEVERON INC. |
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[Signature Page to Dealer-Manager Agreement]
EXHIBIT A
Form of Lock-Up Agreement
__________, 2023
R.F. Lafferty & Co., Inc.
40 Wall Street, 29th Floor
New York, New York 10005
Ladies and Gentlemen:
This agreement is being delivered
to you in connection with the proposed Dealer-Manager Agreement (the “Dealer-Manager Agreement”) by and between
R.F. Lafferty & Co., Inc. (the “Dealer-Manager”) and Longeveron Inc., a Delaware corporation (the “Company”),
in connection with a proposed offering of transferable rights (the “Rights Offering”) to subscribe for up to
$30.0 million of the Company’s Class A common stock, par value $0.001 per share (the “Common Stock”).
To induce the Dealer-Manager
to continue its efforts in connection with the Rights Offering, the undersigned hereby agrees that, without the prior written consent
of the Dealer-Manager, it will not, during the period commencing on the date hereof and ending fourteen (14) days after the date of expiration
of the Rights Offering (the “Expiration Date”) (the “Lock-Up Period”), (1) offer,
pledge, sell, contract to sell, grant any option or contract to purchase, purchase any option or contract to sell, grant any option, right
or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock, any securities
convertible into or exercisable or exchangeable for Common Stock, or Class B common stock, par value $0.001 per share, of the Company
(collectively, the “Securities”); or (2) enter into any swap or other arrangement that transfers to another,
in whole or in part, any of the economic consequences of ownership of the Securities, whether any such transaction described in clause
(1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise; (3) make any demand for
or exercise any right with respect to the registration of any Securities; or (4) publicly disclose the intention to make any offer, sale,
pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Securities.
Notwithstanding the foregoing,
the restrictions and limitations set forth herein shall not apply to any transfers, sales or assignments by the undersigned with respect
to the subscription rights held by the undersigned issued by the Company pursuant to the Rights Offering. Further and in addition to the
prior sentence, the undersigned may transfer Securities without the prior consent of the Dealer-Manager in connection with (a) transactions
relating to Securities acquired in open market transactions after the completion (and not as part of) the Rights Offering; provided
that no filing under Section 13 or Section 16(a) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
or other public announcement shall be required or shall be voluntarily made in connection with subsequent sales of Securities or other
securities acquired in such open market transactions; (b) if the undersigned is an individual, transfers of Securities as a bona fide
gift, by will or intestacy or to a family member or trust for the benefit of a family member; provided that in the case of any
transfer or distribution pursuant to clause (b), (i) each donee or distributee shall sign and deliver a lock-up agreement substantially
in the form of this Agreement and (ii) no filing under Section 13 or 16(a) of the Exchange Act, reporting a reduction in beneficial ownership
of Securities, shall be required or shall be voluntarily made during the Lock-up Period; (c) transfer of Securities to a charity or educational
institution; (d) if the undersigned is, or directly or indirectly controls, a corporation, partnership, limited liability company or other
business entity, any transfers of Securities to any shareholder, partner or member of, or owner of similar equity interests in, the undersigned,
as the case may be, if, in any such case, such transfer is not for value; or (e) if the undersigned is a corporation, partnership, limited
liability company or other business entity, any transfer of Securities made by the undersigned (i) in connection with the sale or other
bona fide transfer in a single transaction of all or substantially all of the undersigned’s capital stock, partnership interests,
membership interests or other similar equity interests, as the case may be, or all or substantially all of the undersigned’s assets,
in any such case not undertaken for the purpose of avoiding the restrictions imposed by this Agreement or (ii) to another corporation,
partnership, limited liability company or other business entity so long as the transferee is an affiliate of the undersigned and such
transfer is not for value. The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s
transfer agent and registrar against the transfer of the undersigned’s Securities except in compliance with this Agreement.
No provision in this Agreement
shall be deemed to restrict or prohibit the vesting, exercise, exchange or conversion by or on behalf of the undersigned of any securities
exercisable or exchangeable for or convertible into Common Stock, as applicable, including any “withhold to cover” transactions
effected for tax purposes in connection with the vesting of equity awards under the Company’s current equity incentive plan; provided
that the undersigned does not transfer the Common Stock acquired on such exercise, exchange or conversion during the Lock-Up Period, unless
otherwise permitted pursuant to the terms of this Agreement. In addition, no provision herein shall be deemed to restrict or prohibit
the entry into or modification of a so-called “10b5-1” plan at any time (other than the entry into or modification of such
a plan in such a manner as to cause the sale of any Securities within the Lock-Up Period).
The undersigned understands
that the Company and the Dealer-Manager are relying upon this Agreement in proceeding toward consummation of the Rights Offering. The
undersigned represents and warrants that the undersigned has full power and authority to enter into this Agreement. The undersigned agrees
that this Agreement is irrevocable and that the provisions of this Agreement shall be binding also upon the successors, assigns, heirs
and legal representatives of the undersigned.
The undersigned understands
that, if the Dealer-Manager Agreement is not executed on or before December 31, 2023, or if the Dealer-Manager Agreement (other than the
provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares to be sold
thereunder, this Agreement shall be void and of no further force or effect.
Whether or not the Rights
Offering actually occurs depends on a number of factors, including market conditions.
This Agreement shall be governed
by and construed in accordance with the laws of the State of New York.
[Signature Page Follows]
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(Name of Signatory, in the case of entities - Please Print) |
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(Title of Signatory, in the case of entities - Please Print) |
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A-3
Exhibit 4.2
Certain portions of this exhibit have been redacted in accordance with
Item 601(a)(6) of Regulation S-K. This information is not material and disclosure of such information would constitute an unwarranted
invasion of personal privacy. “[*]” indicates that information has been redacted.
| RIGHTS CERTIFICATE #: |
NUMBER OF RIGHTS: |
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING
ARE SET FORTH IN LONGEVERON INC.’S PROSPECTUS DATED , 2023 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE.
COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM OKAPI PARTNERS LLC, THE INFORMATION AGENT, BY CALLING (212) 297-0720 (BANKERS
AND BROKERS) OR (844) 201-1170 (ALL OTHERS) OR BY EMAIL AT INFO@OKAPIPARTNERS.COM.
LONGEVERON
INC.
Incorporated under the laws of the State of Delaware
TRANSFERABLE
SUBSCRIPTION RIGHTS CERTIFICATE
Evidencing Transferable Subscription Rights to
Purchase Shares of Class A common stock of Longeveron Inc.
Subscription Price: $ per Share
THE SUBSCRIPTION RIGHTS WILL EXPIRE IF NOT EXERCISED
ON OR BEFORE 5:00 P.M., EASTERN TIME, ON , 2023, UNLESS EXTENDED BY THE COMPANY
THIS CERTIFIES THAT the registered owner whose name is inscribed hereon
is the owner of the number of transferable subscription rights (“Rights”) set forth above. Each Right entitles the holder
thereof to subscribe for and purchase one share of Class A common stock, par value $0.001 per share (a “share”) of Longeveron
Inc., at a subscription price of $ per share (the “basic subscription right”), pursuant to a rights offering (the “Rights
Offering”), on the terms and subject to the conditions set forth in the Prospectus and the “Instructions as to Use of Longeveron
Inc. Transferable Subscription Rights Certificate” accompanying this Transferable Subscription Rights Certificate.
If any shares of Class A common stock available for purchase in the
Rights Offering are not purchased by other holders of Rights pursuant to the exercise of their basic subscription rights, any Rights holder
that exercises its basic subscription rights in full may subscribe for additional shares of Class A common stock pursuant to the terms
and conditions of this Rights Offering, subject to proration, as described in the Prospectus (the “over-subscription privilege”).
The Rights represented by this Transferable Subscription Rights Certificate
may be exercised by completing Form 1 and any other appropriate forms on the reverse side hereof and by returning the full payment of
the subscription price for each share of Class A common stock in accordance with the Instructions referenced above that accompany this
Transferable Subscription Rights Certificate.
This Transferable Subscription Rights Certificate is not valid unless
countersigned by the subscription agent, Colonial Stock Transfer Company, Inc.
DATED: ,
2023
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General Counsel and Corporate Secretary |
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Countersigned and Registered: |
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Colonial Stock Transfer Company, Inc. |
DELIVERY
OPTIONS FOR TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATE
If delivering by hand delivery, first class
mail or overnight courier:
Colonial Stock Transfer Company, Inc.
Attn: Amy Parker
7840 S 700 E.
Sandy, UT 84070
PLEASE PRINT ALL INFORMATION CLEARLY AND LEGIBLY
To the extent you subscribe for more shares of
Class A common stock than you are entitled under either the basic subscription right or the over-subscription privilege, you will be deemed
to have elected to purchase the maximum number of shares of Class A common stock for which you are entitled to subscribe under the basic
subscription right or over-subscription privilege, as applicable. Fractional shares will not be issued. Any excess subscription payments
received by the subscription agent will be promptly returned, without interest or penalty.
PLEASE FILL IN ALL APPLICABLE
INFORMATION
FORM 1. TO SUBSCRIBE AND/OR SELL (by Holder)
Please use this Form if you are the holder named
on this Rights Certificate and wish to exercise/sell your Rights.
A. Exercise of Basic Subscription
Right
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I subscribe for:
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_____________________
(no. of shares) |
x |
__________________
(subscription price) |
= |
$____________________
(amount enclosed) |
B. Exercise of Over-Subscription Privilege
If you have exercised your basic subscription right in full, above,
and wish to subscribe for additional shares of Class A common stock for which you are otherwise allowed to subscribe, you may exercise
your over-subscription privilege below.
| I exercise: |
________________ |
x |
$ |
________________ |
= |
$ |
________________ |
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(no. of shares) |
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(subscription price) |
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(amount enclosed) |
C. Total Amount and Method of Payment
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Amount Enclosed |
Method of Payment (check one): |
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| basic subscription right: |
$ _______________ |
☐ Check or bank draft drawn on a U.S. bank, or postal or express money order payable to “Colonial Stock Transfer Company, Inc., as subscription agent.” |
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| over-subscription privilege: |
$ _______________ |
☐ Wire transfer of immediately available funds directly to the escrow
account maintained by an escrow agent retained by Colonial Stock Transfer Company, Inc., as subscription agent, on our behalf at Key Bank,
410 E. 400 S, Salt Lake City, Utah 84111, ABA #124000737, Acct. Name: Colonial Stock Transfer Escrow #23, Acct # [*], SWIFT: KEYBUS33,
Colonial Stock Transfer FBO Longeveron Inc., with reference to the Rights holder’s name. |
| Total Amount Enclosed: |
$ _______________ |
D. Sale of Rights
| Please check as Applicable: |
☐ Sell any remaining Rights |
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☐ Sell all of my basic subscription rights |
TO SUBSCRIBE AND/OR SELL (by Holder). I acknowledge that I have received
the Prospectus for this Rights Offering, and I hereby irrevocably subscribe for the number of shares of Class A Common Stock indicated
above and/or irrevocably instruct you to sell the shares of Class A Common stock indicated above.
Signature of Holder(s)________________________________________________________________________________________
Telephone number: (______________) ______________________________________________________________________________________
PLEASE FILL IN ALL APPLICABLE INFORMATION
E-mail address: _______________________________________________________________________________________________
IMPORTANT: The signature(s) must correspond with the name(s) as printed on the reverse of this Transferable Subscription Rights Certificate
in every particular, without alteration or enlargement, or any other change whatsoever.
FORM 2A. TO TRANSFER SUBSCRIPTION RIGHTS
Please use this Form 2A if you are the holder named on this Rights
Certificate and wish to transfer some or all of your Rights.
For value received, __________ of the Subscription Rights represented
by this Rights Certificate are assigned to:
(Full Name and SSN/TIN of Assignee(s)): _____________________________________________________________________________________
(Full Address): _______________________________________________________________________________________________
Signature(s) of Assignee(s): _______________________________________________________________________________________________
E-mail address: _______________________________________________________________________________________________
Signature of Holder(s) _______________________________________________________________________________________________
IMPORTANT: The signature(s) must correspond with the name(s) as printed
on the reverse of this Transferable Subscription Rights Certificate in every particular, without alteration or enlargement, or any other
change whatsoever.
FORM 2B. TO SUBSCRIBE AND/OR SELL (by Assignee)
Please use this Form 2B if Rights have been transferred to you by the
holder named on this Rights Certificate pursuant to Form 2A above and you, as assignee, wish to exercise or sell some or all of such
transferred Rights.
I hereby irrevocably subscribe for the number of shares of Class A
Common Stock indicated in Forms 1.A and 1.B above and/or irrevocably instruct you to sell the number of shares of Class A Common stock
indicated in Form D. above upon the terms and conditions specified in the Prospectus related thereto, receipt of which is acknowledged.
Signature of Assignee Subscriber(s):____________________________________________________________________________________
Telephone number: (_______________) ______________________________________________________________________________________
E-mail
address: _______________________________________________________________________________________________
FORM 3. DELIVERY TO DIFFERENT ADDRESS
If you wish for the shares of Class A common stock underlying your
Rights, a certificate representing unexercised Rights or any proceeds of any sale of Rights to be delivered to an address different from
that shown on the face of this Transferable Subscription Rights Certificate, please enter the alternative address below, sign and have
your signature guaranteed under Form 4.
Signature of Holder(s)_______________________________________________________________________________________
IMPORTANT: The signature(s) must correspond with the name(s) as printed
on the reverse of this Transferable Subscription Rights Certificate in every particular, without alteration or enlargement, or any other
change whatsoever.
FORM 4. SIGNATURE GUARANTEE
This form must be completed if you have completed Form 2.B or Form
3.
Signature Guaranteed: _________________________________________________
(Name of Bank or Firm)
By: ________________________________________________________________
(Signature of Officer)
IMPORTANT: The signature(s) should be guaranteed by an eligible guarantor
institution (bank, stockbroker, savings & loan association or credit union) with membership in an approved signature guarantee medallion
program pursuant to Securities and Exchange Commission Rule 17Ad-15.
FOR INSTRUCTIONS ON THE USE OF LONGEVERON INC. TRANSFERABLE SUBSCRIPTION
RIGHTS CERTIFICATES, CONSULT OKAPI PARTNERS LLC, THE INFORMATION AGENT, AT:
(212) 297-0720 (BANKERS AND BROKERS) OR
(844) 201-1170 (ALL OTHERS)
OR BY EMAIL AT INFO@OKAPIPARTNERS.COM.
THE RIGHTS OFFERING EXPIRES AT 5:00 P.M., EASTERN TIME, ON _____________,
2023 (UNLESS EXTENDED BY THE COMPANY AS DESCRIBED IN THE PROSPECTUS), AND THIS TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATE IS VOID THEREAFTER.
THE RIGHTS OFFERING HAS BEEN REGISTERED OR QUALIFIED OR IS BELIEVED
TO BE EXEMPT FROM REGISTRATION OR QUALIFICATION ONLY UNDER THE FEDERAL LAWS OF THE UNITED STATES AND THE LAWS OF THE STATES IN THE UNITED
STATES. RESIDENTS OF OTHER JURISDICTIONS MAY NOT PURCHASE THE SECURITIES OFFERED HEREBY UNLESS THEY CERTIFY THAT THEIR PURCHASES OF SUCH
SECURITIES ARE EFFECTED IN ACCORDANCE WITH THE APPLICABLE LAWS OF SUCH JURISDICTIONS.
Exhibit 5.1
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Union Trust Building
501 Grant Street, Suite 200
Pittsburgh, PA 15219-4413
T 412 562 8800
F 412 562 1041
www.bipc.com |
July 28, 2023
Longeveron Inc.
1951 NW 7th Avenue, Suite 520
Miami, Florida 33136
| Re: | Longeveron Inc. |
| | | Registration Statement on Form S-1 |
Ladies and Gentlemen:
We have acted as counsel to
Longeveron Inc., a Delaware corporation (the “Company”), in connection with the preparation and filing of a Registration
Statement on Form S-1 (as amended or supplemented, the “Registration Statement”) with the Securities and Exchange
Commission (the “Commission”), with respect to the registration under the Securities Act of 1933, as amended (the “Securities
Act”), of transferable subscription rights (the “Rights”) to purchase Class A common stock, par value $0.001
per share, of the Company (the “Common Stock”), to be distributed to holders of record of shares of the Common Stock,
Class B common stock, par value $0.001 per share, and warrants to purchase shares of Common Stock, and the shares (the “Shares”)
of Common Stock issuable upon exercise of the Rights, each as described in the prospectus (the “Prospectus”) forming
a part of the Registration Statement.
We have reviewed copies of
(i) the Registration Statement; (ii) the Company’s Bylaws; (iii) the Company’s Certificate of Incorporation;
(iv) the specimen Common Stock certificate used by the Company for the issuance of shares of its Common Stock; (v) the form
of subscription rights certificate, which will be used by the Company to evidence the Rights; and (vi) certain resolutions of the
Board of Directors of the Company authorizing the registration and issuance of the Shares and other related matters. We have also reviewed
such other documents and made such other investigations as we have deemed appropriate. As to various questions of fact material to this
opinion, we have relied upon statements, representations and certificates of officers or representatives of the Company, public officials
and others. We have not independently verified the facts so relied on.
In our examination of the
documents described above, we have assumed the genuineness of all signatures, the legal capacity of all individual signatories, the authenticity
of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies, the authenticity
of such original documents and the completeness and accuracy of all such documents provided to us by the Company. As to any facts material
to the opinions expressed herein, we have, when such facts were not independently established, relied upon certificates of public officials
and certificates, oaths, declarations and representations of the Company and of its officers, directors and other representatives. We
have assumed that the Company will continue to be presently subsisting in good standing, and will continue to have the requisite legal
status and legal capacity, under the laws of the State of Delaware, and that the Company has complied and will comply with all aspects
of applicable laws of jurisdictions other than the United States of America in connection with the transactions contemplated by the Registration
Statement.
Based upon the foregoing and
in reliance thereon, and subject to the qualifications, limitations, exceptions and assumptions set forth herein, we are of the opinion
that following (i) the effectiveness of the Registration Statement, (ii) the execution, authentication, issuance and delivery of the Rights,
and the issuance and sale of the Shares, in the manner described in the Registration Statement, and (iii) the receipt by the Company
of the consideration for the Shares specified in the applicable resolutions of the Board of Directors of the Company, (A) the Rights
will be legally issued and will constitute valid and binding obligations of the Company, enforceable in accordance with the terms of such
certificates, and (B) the Shares will be legally issued, fully paid and non-assessable.
The opinion in clause (A)
above is subject to (a) the effect of any bankruptcy, insolvency, reorganization, moratorium, arrangement or similar laws affecting the
rights and remedies of creditors’ generally, including without limitation the effect of statutory or other laws regarding fraudulent
transfers or preferential transfers, and (b) general principles of equity, including without limitation concepts of materiality, reasonableness,
good faith and fair dealing and the possible unavailability of specific performance, injunctive relief or other equitable remedies regardless
of whether enforceability is considered in a proceeding in equity or at law.
Our opinion is not rendered
with respect to any laws other than the General Corporation Law of the State of Delaware. Please note that we are opining only as to the
matters expressly set forth herein, and no opinion should be inferred as to any other matters. Without limiting the generality of the
foregoing, we express no opinion with respect to compliance by the Company with federal securities laws or the securities or “blue
sky” laws of any state or other jurisdiction of the United States or of any foreign jurisdiction, including with respect to antifraud
laws relating to the sale of securities.
This opinion is rendered as
of the date first written above, based upon currently existing statutes, rules, regulations and judicial decisions, and we disclaim any
obligation to advise you of any change in any of these sources of law or subsequent legal or factual developments which might affect any
matters or opinions set forth herein, whether by implication or otherwise, as to any other matters relating to the Company, the Shares
or any other agreements or transactions that may be related thereto or contemplated thereby. We are expressing no opinion as to any obligations
that parties other than the Company may have under or in respect of the Shares or as to the effect that their performance of such obligations
may have upon any of the matters referred to above. No opinion may be implied or inferred beyond the opinion expressly stated above.
We hereby consent to the filing
of this opinion with the Commission as an exhibit to the Registration Statement in accordance with the requirements of Item 601(b)(5)
of Regulation S-K promulgated by the Commission and to the use of our name in the Prospectus and any prospectus supplement under the caption
“Legal Matters.” In giving such consent, we do not hereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of the Commission.
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Very truly yours, |
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Buchanan Ingersoll & Rooney PC |
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By: |
/s/ Jennifer Minter |
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Jennifer Minter |
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Vice President – Opinions |
Exhibit 8.1
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Union Trust Building
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501 Grant Street, Suite 200 |
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Pittsburgh, PA 15219-4413
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T 412 562 8800 |
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F 412 562 1041 |
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www.bipc.com |
July 28, 2023
Longeveron Inc.
1951 NW 7th Avenue, Suite 520
Miami, Florida 33136
Registration Statement on Form S-1
Ladies and Gentlemen:
We have acted as counsel to
Longeveron Inc., a Delaware corporation (the “Company”), in connection with the preparation and filing of a Registration
Statement on Form S-1 (as amended or supplemented, the “Registration Statement”) with the Securities and Exchange Commission
(the “Commission”), with respect to the registration under the Securities Act of 1933, as amended (the "Securities
Act"), of shares (the “Shares”) of Class A common stock, par value $0.001 per share, of the Company (the “Common
Stock”), issuable upon exercise of transferable subscription rights (the “Rights”) to be distributed by the
Company without consideration in connection with a rights offering (the “Rights Offering”) to holders of record of
the Common Stock, Class B common stock, par value $0.001 per share, and warrants to purchase shares of Common Stock, each as described
in the prospectus (the “Prospectus”) forming a part of the Registration Statement.
We have reviewed originals,
or copies certified or otherwise identified to our satisfaction, of the Registration Statement and the exhibits thereto and such other
documents or matters of fact as we have considered necessary or appropriate. We have not, however, made an independent investigation or
audit of the facts set forth in the above referenced documents or otherwise provided to us. We have assumed (i) the authenticity of all
documents submitted to us as originals and the conformity to original documents of all documents submitted to us as copies; (ii) that
the Rights Offering will be consummated as described in the Registration Statement; (iii) that the statements concerning the terms of
the Rights Offering set forth in the Registration Statement are true, complete and correct and will remain true, complete and correct
at all relevant times; and (iv) that any such statements made in the Registration Statement qualified by knowledge, intention, belief
or any other similar qualification are true, complete and correct, and will remain true, complete and correct at all relevant times, in
each case as if made without such qualification. As to any facts material to the opinions expressed herein, we have, when such facts were
not independently established, relied upon certificates of public officials and certificates, oaths, declarations and representations
of the Company and of its officers, directors and other representatives. If any of the above-described assumptions are untrue for any
reason or if the Rights Offering is consummated in a manner that is different from the manner described in the Registration Statement,
our opinion as expressed below may be adversely affected.
Based upon the foregoing and
in reliance thereon, and subject to the qualifications, limitations, exceptions and assumptions set forth herein, we hereby confirm to
you that the statements set forth under the caption “MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES”
in the Registration Statement, insofar as they present legal conclusions with respect to matters
of United States federal income tax law, constitute our opinion as to the material United States federal income tax consequences
of the Rights Offering to holders of common stock and warrants to purchase shares of Common Stock.
We express no opinion on any
issue relating to the tax consequences of the transactions contemplated by the Registration Statement other than the opinion set forth
above. Our opinion set forth above is based on the Internal Revenue Code of 1986, as amended, Treasury Regulations promulgated thereunder,
administrative pronouncements and judicial precedents, all as of the date hereof. The foregoing authorities may be repealed, revoked or
modified, and any such change may have retroactive effect. Any change in applicable laws or facts and circumstances surrounding the Rights
Offering, or any inaccuracy in the statements, facts, assumptions and representations on which we have relied may affect the validity
of the opinion set forth herein. We assume no responsibility and we disclaim any obligation to inform the Company of any such change in
any of these sources of law or subsequent legal or factual developments which might affect any matters or opinions set forth herein, whether
by implication nor otherwise, as to any other matters relating to the Company or of inaccuracy that may occur or come to our attention.
Our opinion is not binding
on the Internal Revenue Service or a court. There can be no assurance that the Internal Revenue Service will not take a contrary position
or that a court would agree with our opinion if litigated. No opinion may be implied or inferred beyond the opinion expressly stated above.
We are furnishing this opinion
in connection with the filing of the Registration Statement and this opinion is not to be relied upon for any other purpose without our
prior written consent.
We hereby consent to the filing
of this opinion with the Commission as an exhibit to the Registration Statement in accordance with the requirements of Item 601(b)(8)
of Regulation S-K promulgated by the Commission and to the use of our name in the Prospectus and any prospectus supplement under the caption
“Legal Matters.” In giving such consent, we do not hereby admit that we are in the category of persons whose consent is required
under Section 7 of the Securities Act or the rules and regulations of the Commission.
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Very truly yours, |
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Buchanan Ingersoll & Rooney PC |
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By: |
/s/ Carl F. Staiger |
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Carl F. Staiger |
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Vice President – Opinions |
Exhibit 23.1
Independent
Registered Public Accounting Firm’s Consent
We consent to the incorporation by reference in
this Registration Statement of Longeveron Inc. on Amendment No. 1 to Form S-1 (File No. 333-272946) of our report dated March 14, 2023
with respect to our audit of the financial statements of Longeveron Inc. as of December 31, 2022 and for the year ended December 31,
2022, appearing in the Annual Report on Form 10-K of Longeveron Inc for the year ended December 31, 2022. We also consent to the reference
to our Firm under the heading “Experts” in such Prospectus.
/s/ Marcum LLP
Marcum LLP
Hartford, CT
July 27, 2023
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
Longeveron Inc.
Miami, Florida
We hereby consent to the incorporation by reference in this Registration
Statements on Form S-1, Amendment No.1 (Registration No. 333-272946) of Longeveron Inc. (the “Company”) of our report dated
March 11, 2022, relating to the financial statements of the Company as of December 31, 2021 and for the year ended December 31, 2021,
which appears in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.
We also consent to the reference to our Firm under the caption
“Experts” in the Prospectus.
/s/ MSL, P.A.
MSL, P.A.
Orlando, Florida
July 28, 2023
Exhibit 24.2
Power of Attorney
Each person whose signature appears below constitutes and appoints
Wa’el Hashad and Paul Lehr and each of them singly, his or her true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign this Registration
Statement on Form S-1/A and any and all amendments (including post-effective amendments) thereto of Longeveron Inc. and to file the same,
with all exhibits thereto and all other documents in connection therewith, with the SEC, granting unto each said attorney-in-fact and
agents full power and authority to do and perform each and every act in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or either of them or their, his or her substitute or substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement 1 has been signed by the following persons in the capacities and on the dates indicated.
| Signature |
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Title |
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Date |
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| /s/ Khoso Baluch |
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| Khoso Baluch |
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Director |
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July 28, 2023 |
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| /s/ Ursula Ungaro |
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| Ursula Ungaro |
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Director |
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July 28, 2023 |
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| /s/ Jeffrey Pfeffer |
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| Jeffrey Pfeffer |
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Director |
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July 28, 2023 |
Exhibit 99.1
Certain portions of this exhibit have been redacted in accordance with
Item 601(a)(6) of Regulation S-K. This information is not material and disclosure of such information would constitute an unwarranted
invasion of personal privacy. “[*]” indicates that information has been redacted.
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING
ARE SET FORTH IN LONGEVERON INC.’S PROSPECTUS DATED , 2023 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE.
COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM OKAPI PARTNERS LLC, THE INFORMATION AGENT, BY CALLING (212) 297-0720 (BANKERS
AND BROKERS) OR (844) 201-1170 (ALL OTHERS) OR BY EMAIL AT INFO@OKAPIPARTNERS.COM.
FORM OF INSTRUCTIONS
AS TO USE OF
LONGEVERON INC.
TRANSFERABLE SUBSCRIPTION RIGHTS CERTIFICATES
PLEASE CONSULT THE INFORMATION AGENT,
YOUR BANK OR BROKER AS TO ANY QUESTIONS
The following instructions relate
to a rights offering (the “Rights Offering”) by Longeveron Inc., a Delaware corporation (the “Company”), to the
holders (each a “holder”, or “you”) of its Class A common stock, Class B common stock (together, our “common
stock”) and warrants exercisable for our Class A common stock (the “participating warrants”), as described in the Company’s
prospectus dated , 2023 (the “Prospectus”).
Holders of our common stock and participating warrants owned and settled as of 5:00 p.m., Eastern Time, on ____________, 2023 (the “record
date”) are receiving, at no charge, transferable subscription rights (the “Rights”) to purchase shares of Class A common
stock (the “shares” and each, a “share”). An aggregate of up to $30.0 million of Class A common stock is being
offered by the Prospectus.
The Rights will be evidenced
by transferable subscription rights certificates (the “Rights Certificate”). The number of Rights to which you are entitled
is printed on the face of your Rights Certificate. The Rights will expire, if not exercised, by 5:00 p.m., Eastern Time, on ,
2023 (the “expiration date”), unless extended by the Company. If you do not exercise your Rights at or before the expiration
date of this Rights Offering, your unexercised Rights will be null and void and will have no value. The Company will not be obligated
to honor any purported exercise of Rights received by Colonial Stock Transfer Company, Inc. (the “subscription agent”) after
5:00 p.m., Eastern Time, on the expiration date, regardless of when the documents relating to such exercise were sent. If the Company’s
board of directors extends the Rights Offering, the Company will issue a press release notifying holders of the extension of the expiration
date as promptly as practical, but in no event later than 9:00 a.m., Eastern Time, on the next business day following the most recently
announced expiration date.
Each holder will receive five
Rights for every share of common stock owned of record or underlying a participating warrant as of the record date. Each Right allows
the holder thereof to subscribe for one share of Class A common stock (the “basic subscription right”) at the subscription
price of $ per share. Fractional Rights will not be issued. As an example, if you owned 1,000 shares of Class
A common stock as of the record date, you would receive 5,000 Rights pursuant to your basic subscription right, giving you the ability
to purchase 5,000 shares of Class A common stock in the Rights Offering pursuant to your basic subscription right.
In addition, holders who fully
exercise their basic subscription right will be entitled to subscribe for additional shares of Class A common stock that remain unsubscribed
as a result of any unexercised basic subscription rights (the “over-subscription privilege”). The over-subscription privilege
allows a holder to subscribe for additional shares of Class A common stock at the subscription price per share on a pro rata basis if
any shares are not purchased by other holders under their basic subscription rights as of the expiration date. “Pro rata”
means in proportion to the number of shares of Class A common stock that you and the other holders have subscribed for under the over-subscription
privilege. You may exercise your over-subscription privilege only if you have exercised your basic subscription right in full and other
holders of Rights do not exercise their basic subscription rights in full. If there are not enough shares of Class A common stock to satisfy
all subscriptions made under the over-subscription privilege, the Company will allocate the remaining shares of Class A common stock pro
rata among those over-subscribing Rights holders, and return any excess payments in the form in which made. For purposes of determining
if you have fully exercised your basic subscription right, the Company will consider only the basic subscription right held by you in
the same capacity. See “The Rights Offering—The Subscription Rights- Basic Subscription Right- Over-Subscription Privilege”
in the Prospectus.
The number of basic subscription
rights to which you are entitled is printed on the face of your Rights Certificate. You should indicate your wishes with regard to the
exercise of your Rights by completing the appropriate portions of your Rights Certificate and returning the certificate to the subscription
agent pursuant to the procedures described in the Prospectus. If your shares of Class A common stock are held in an account with
a broker, dealer, custodian bank or other nominee, you will not receive a Rights Certificate. Instead, Rights will be issued to such nominee
record holder for each share of our Class A common stock held by such nominee at the record date. If you are not contacted by your nominee,
you should promptly contact your nominee in order to subscribe for shares and follow the instructions provided by your nominee. Your nominee
may establish a deadline before the expiration of the Rights Offering by which you must provide it with your instructions to exercise
your Rights, along with the required subscription payment. In connection with the exercise of the over-subscription privilege, custodian
banks, brokers and other nominee holders of basic subscription rights who act on behalf of beneficial owners will be required to certify
to us and to the subscription agent as to the aggregate number of basic subscription rights exercised, and the number of shares requested
through the over-subscription privilege, by each beneficial owner on whose behalf the nominee holder is acting.
You are not required to exercise
any or all of your basic subscription rights. If you do not exercise or transfer your Rights, you will lose any value represented by your
Rights, and if you do not exercise your Rights in full, your percentage ownership interest and related rights in the Company may be diluted.
Your percentage ownership of our stock may also decrease if you do not exercise your Rights in full.
If you have any questions
concerning the Rights Offering, please contact the Information Agent, OKAPI PARTNERS LLC by telephone at (212) 297-0720 (bankers and brokers)
or (844) 201-1170 (all others) or by email at info@okapipartners.com.
YOUR TRANSFERABLE SUBSCRIPTION
RIGHTS CERTIFICATE AND SUBSCRIPTION PRICE PAYMENT, BY (X) CHECK DRAWN UPON A UNITED STATES BANK, OR (Y) WIRE TRANSFER IN IMMEDIATELY AVAILABLE
FUNDS, MUST BE ACTUALLY RECEIVED BY THE SUBSCRIPTION AGENT ON OR BEFORE 5:00 P.M., EASTERN TIME, ON THE EXPIRATION DATE. ONCE A HOLDER
OF RIGHTS HAS EXERCISED THE BASIC SUBSCRIPTION RIGHT AND THE OVER-SUBSCRIPTION PRIVILEGE, SUCH EXERCISE MAY NOT BE REVOKED. IF YOU DO
NOT EXERCISE YOUR SUBSCRIPTION RIGHTS AT OR BEFORE THE EXPIRATION DATE OF THIS RIGHTS OFFERING, YOUR UNEXERCISED RIGHTS WILL BE NULL AND
VOID AND WILL HAVE NO VALUE.
1. Method of Subscription—Exercise of Rights.
To exercise Rights, complete your Rights Certificate
and send the properly completed and executed Rights Certificate evidencing such Rights, with any signatures required to be guaranteed
so guaranteed, together with payment in full of the subscription price for each share of Class A common stock subscribed for pursuant
to the basic subscription right and the over-subscription privilege, to the subscription agent so that it will be actually received by
the subscription agent on or prior to 5:00 p.m., Eastern Time, on the expiration date. The subscription agent will hold your payment of
the subscription price in a segregated account with other payments received from other rights holders until the Company issues your shares
of Class A common stock upon completion of the Rights Offering, and after all pro rata allocations and adjustments have been completed
and upon payment of the subscription price for such shares. All payments of the subscription price must be made in United States dollars
for the full number of shares of Class A common stock for which you are subscribing by (x) check drawn upon a United States bank
payable to Colonial Stock Transfer Company, Inc., as subscription agent, or (y) wire transfer of immediately available funds to the
account maintained by the subscription agent for the purpose of accepting subscriptions in the Rights Offering. Please reference your
Rights Certificate number on your check or reference the holder’s name on the wire transfer.
The Rights Certificate must be delivered to the
subscription agent at the address indicated below and payment of the subscription price must be delivered to the subscription agent by
one of the methods described below:
By First Class Mail, Hand Delivery or Overnight Courier:
Colonial Stock Transfer Company, Inc.
Attn: Amy Parker
7840 S 700 E.
Sandy, UT 84070
By Wire Transfer:
Colonial Stock Transfer Company, Inc.,
as subscription agent,
on our behalf at Key Bank
410 E. 400 S, Salt Lake City, Utah 84111
ABA #124000737
Acct. Name: Colonial Stock Transfer
Escrow #23
Acct # [*], SWIFT: KEYBUS33
Colonial Stock Transfer FBO Longeveron
Inc.,
Reference to the Rights holder’s
name.
Delivery to any address or by a method other than those set forth above
will not constitute valid delivery.
If you are a holder and have any questions,
require assistance regarding the method of exercising Rights or require additional copies of relevant documents, please contact the information
agent, Okapi Partners, LLC, at toll-free telephone number (844) 201-1170.
If you are a broker or bank and have any questions,
require assistance regarding the method of exercising Rights or require additional copies of relevant documents, please contact the information
agent, Okapi Partners, LLC, at toll-free telephone number (844) 297-0720.
If you hold your shares of Class A common stock
in the name of a broker, bank, or other nominee, then your broker, bank, or other nominee is the record holder of the shares you own.
If you wish to exercise your Rights, the record holder must exercise the Rights on your behalf for the shares of Class A common stock
you wish to purchase. When making arrangements with your bank or broker for the delivery of funds on your behalf, you may also request
such bank or broker to exercise the Rights Certificate on your behalf.
Banks, brokers, and other nominee holders of Rights
who exercise the basic subscription rights and the over-subscription privilege on behalf of beneficial owners of Rights will be required
to certify to the subscription agent and the Company, in connection with the exercise of the over-subscription privilege, as to the aggregate
number of basic subscription rights that have been exercised and the number of shares of Class A common stock that are being subscribed
for pursuant to the over-subscription privilege, by each beneficial owner of Rights (including such nominee itself) on whose behalf such
nominee holder is acting. If there are not enough shares of Class A common stock to satisfy all subscriptions made under the over-subscription
privilege, the Company will allocate the remaining shares of common stock pro rata, among those over-subscribing rights holders.
“Pro rata” means in proportion to the number of shares of Class A common stock that you and the other rights holders
have subscribed for under the over-subscription privilege. If the aggregate subscription price paid by you is insufficient to purchase
the number of shares of Class A common stock subscribed for, or if no number of shares of Class A common stock to be purchased is specified,
then you will be deemed to have exercised your rights under the basic subscription rights to purchase shares of Class A common stock to
the full extent of the payment tendered.
If the aggregate subscription price paid by you
exceeds the amount necessary to purchase the number of shares of Class A common stock for which you have indicated an intention to subscribe,
then the remaining amount will be returned to you by mail, without interest or deduction, promptly after the expiration date and after
all pro rata allocations and adjustments contemplated by the terms of the Rights Offering have been effected. You will not receive
interest on any payments refunded to you under this Rights Offering.
Your Rights will not be considered exercised unless
the subscription agent receives from you, your broker, custodian, or nominee, as the case may be, all of the required documents and your
full subscription price payment on or prior to 5:00 p.m., Eastern Time, on ,
2023, the expiration date of this Rights Offering, unless extended.
If you fail to complete and sign the required
subscription forms, send an incorrect payment amount or otherwise fail to follow the subscription procedures that apply to your exercise
in this Rights Offering, the subscription agent may, depending on the circumstances, reject your subscription or accept it only to the
extent of the payment received. You should allow a sufficient number of days to ensure delivery to the subscription agent and clearance
of any payment by personal check on or prior to 5:00 p.m., Eastern Time, on the expiration date. Neither the Company nor the subscription
agent undertakes to contact you concerning an incomplete or incorrect subscription form or payment, nor is the Company under any obligation
to correct such forms or payment. The Company has the sole discretion to determine whether a subscription exercise properly follows the
subscription procedures.
Delivery to an address or by a method other than
those above will not constitute valid delivery.
2. Issuance of Common Stock.
Promptly following the expiration
of the Rights Offering, and the valid exercise of Rights pursuant to the basic subscription right and over-subscription privilege, and
after all pro rata allocations and adjustments contemplated by the terms of the Rights Offering have been effected, the following deliveries
and payments will be made to the address shown on the face of your Rights Certificate, or, if you hold your shares in book-entry form,
such deliveries and payments will be in the form of a credit to your account, unless you provide instructions to the contrary in your
Rights Certificate:
| (a) | Basic Subscription Rights. The subscription agent will deliver in book-entry,
or uncertificated, form the number of shares of Class A common stock purchased by a holder pursuant to the holder’s basic subscription
rights. |
| (b) | Over-Subscription Privilege. The subscription agent will deliver to each
rights holder who validly exercises the over-subscription privilege the number of shares of Class A common stock, if any, allocated to
and purchased by such holder pursuant to the over-subscription privilege (and after all pro rata allocations and adjustments have been
completed with respect to the over-subscription and taking into account the guaranteed delivery period). See “The Rights
Offering—The Subscription Rights- Basic Subscription Right and Over-Subscription Privilege”
in the Prospectus. |
| (c) | Excess Cash Payments. The subscription agent will mail to each holder
who exercises their Rights any excess amount, without interest or deduction, received in payment of the subscription price for shares
of Class A common stock that are subscribed for by rights holder but not allocated to such holder pursuant to the basic subscription right
or over-subscription privilege. See “The Rights Offering— Return of Funds upon Completion or Termination” in
the Prospectus. |
| (d) | Beneficial Owner. If you hold your shares in the name of a broker, dealer,
custodian bank, broker, dealer or other nominee, DTC will credit your account with your nominee with the share of Class A common stock
that are subscribed for by a rights holder in the Rights Offering. |
3. Sale or Transfer of Rights.
The Rights are transferable
during the course of the subscription period and are expected to trade on The Nasdaq Capital Market until 4:00 p.m. Eastern Time on ,
2023 (or if the offer is extended, until 4:00 p.m. Eastern Time on the extended expiration date) under the symbol “LGVNR”.
As a result, you may transfer or sell your Rights even if you do not want to purchase any shares of Class A common stock. If you purchase
Rights in the open market or otherwise, and this Rights Offering is not completed, the purchase price paid for such Rights will not be
returned to you.
The Rights are a new issue of
securities with no prior trading market, and we cannot provide you any assurances as to the liquidity of the trading market for the Rights
or the market value of the Rights. Therefore, we cannot assure you that you will be able to sell any of your Rights or as to the value
you may receive in a sale. The Class A common stock underlying the Rights may not be transferred separately.
If you are a holder and do not
wish to exercise your Rights, you may instruct the subscription agent to sell all or a portion of your Rights by following the instructions
on your Rights Certificate. If you wish to transfer your Rights, you and your transferee may submit a simultaneous instruction to the
subscription agent to transfer your Rights and to exercise such transferred Rights on behalf of the transferee by following the instructions
in your Rights Certificate. The subscription agent will only facilitate sales, subdivisions or transfers (without simultaneous exercise)
of the physical Rights Certificates until 5:00 p.m., Eastern Time, on , 2023, five (5) business days prior to ,
2023, the expiration date (as it may be extended).
Neither we nor the subscription
agent shall have any liability to a transferee or transferor of Rights if Rights Certificates are not received in time for exercise prior
to the expiration date or subdivision or transfer (without simultaneous exercise) prior to ,
2023, five business days prior to , 2023, the expiration date
(as it may be extended).
4. Fees and Expenses.
The
Company will pay all customary fees and expenses of the subscription agent and the information agent related to their acting in such roles
in connection with the Rights Offering. The Company has also agreed to indemnify the subscription agent and the information agent from
certain liabilities that they may incur in connection with the Rights Offering.
5. Execution.
| (a) | Execution by Registered Holder: The signature on the Rights Certificate
must correspond with the name of the registered holder, which includes holders of Class B common stock and participating warrants, exactly
as it appears on the face of the Rights Certificate without any alteration, enlargement or change. Persons who sign the Rights Certificate
in a representative or other fiduciary capacity on behalf of a registered holder must indicate their capacity when signing and, unless
waived by the subscription agent in its sole and absolute discretion, must present to the subscription agent satisfactory evidence of
their authority so to act. |
| (b) | Execution by Person Other than Registered Holder: If the Rights Certificate
is executed by a person other than the holder named on the face of the Rights Certificate, proper evidence of authority of the person
executing the Rights Certificate must accompany the same unless, for good cause, the subscription agent dispenses with proof of authority. |
| (c) | Signature Guarantees: If you are neither a registered holder (or signing
in a representative or other fiduciary capacity on behalf of a registered holder) nor an eligible institution, such as a member firm of
a registered national securities exchange or a member of the Financial Industry Regulatory Authority, Inc., or a commercial bank or trust
company having an office or correspondent in the United States, your signature must be guaranteed by such an eligible institution. |
6. Method of Delivery to Subscription Agent.
The
method of delivery of Rights Certificate and payment of the subscription price to the subscription agent will be at the election and risk
of the Rights holder, and it is recommended that such certificates and payments be sent by registered mail, properly insured, with return
receipt requested and that a sufficient number of days be allowed to ensure delivery to the subscription agent and the clearance of payment
prior to 5:00 p.m., Eastern Time, on the expiration date. If payments are made by wire transfer, they must be made in immediately available
funds to the account maintained by the subscription agent for the purpose of accepting subscriptions in the Rights Offering prior to 5:00
p.m., Eastern Time, on the expiration date.
7. Special Provisions Relating to the Delivery of Rights through the Depository Trust Company.
In the case of Rights that are
held of record through The Depository Trust Company (“DTC”) or are held in “street name” with DTC participants,
exercises of the basic subscription right and of the over-subscription privilege may be effected by instructing DTC to transfer Rights
from the DTC account of such holder to the DTC account of the subscription agent, together with certification as to the aggregate number
of Rights exercised and the number of shares of Class A common stock thereby subscribed for under the Rights by each beneficial owner
of Rights on whose behalf such nominee is acting, and payment of the subscription price for each share of Class A common stock subscribed
for pursuant to the basic subscription rights and the over-subscription privilege. See the Company’s “Form of Letter to Clients
of Brokers and Other Nominee Holders” and the “Form of Nominee Holder Certification.”
8.
Determinations Regarding the Exercise of Your Rights.
The Company will decide, in its sole discretion,
all questions concerning the timeliness, validity, form, and eligibility of the exercise of your Rights. Any such determinations by the
Company will be final and binding. The Company, in its sole discretion, may waive, in any particular instance, any defect or irregularity
or permit, in any particular instance, a defect or irregularity to be corrected within such time as the Company may determine. The Company
will not be required to make uniform determinations in all cases. The Company may reject the exercise of any of your Rights because of
any defect or irregularity. The Company will not accept any exercise of Rights until all irregularities have been waived by the Company
or cured by you within such time as the Company decides, in its sole discretion.
Neither the Company, the subscription agent, nor
the information agent will be under any duty to notify you of any defect or irregularity in connection with your submission of Rights
Certificates, and the Company will not be liable for failure to notify you of any defect or irregularity. The Company reserves the right
to reject your exercise of Rights if it determines that your exercise is not in accordance with the terms of the Rights Offering, as set
forth in the Prospectus and these Instructions, or in proper form. The Company will also not accept the exercise of your Rights if the
issuance of shares of Class A common stock to you could be deemed unlawful under applicable law.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
Exhibit
99.2
FORM OF LETTER
TO STOCKHOLDERS
AND PARTICIPATING
WARRANT HOLDERS WHO ARE RECORD HOLDERS
LONGEVERON INC.
Transferable Subscription Rights to Purchase
Shares of Class A Common Stock Pursuant to Subscription Rights
Distributed to Stockholders and Holders of Participating Warrants
of Longeveron Inc.
, 2023
Dear Stockholder and/or Participating Warrant
Holder:
This letter is being distributed
by Longeveron Inc., a Delaware corporation (the “Company”), to all holders of record of shares of the Company's Class A common
stock, par value $0.001 per share, Class B common stock, par value $0.001 per share (collectively with the Class A common stock, the “common
stock”) and holders of warrants exercisable for Class A common stock (each, a “participating warrant”), as of 5:00 p.m.,
Eastern Time, on ,
2023 (the “record date”), in connection with the offering (the “Rights Offering”) of transferable subscription
rights (the “Rights”) to purchase shares of Class A common stock as described in the Company’s Prospectus,
dated , 2023 (the “Prospectus”).
In the Rights Offering, the Company
is offering the right to purchase up to $30.0 million of our Class A common stock, as described in the Prospectus. The Rights will expire,
if not exercised, prior to 5:00 p.m., Eastern Time, on , 2023 (as it may be extended, the “expiration
date,” and such time, the “expiration time”). If you do not exercise your Rights at or before the expiration date of
this Rights Offering, your unexercised Rights will be null and void and will have no value.
As described in the accompanying
Prospectus, you will receive, at no charge, five transferable Rights for every share of common stock beneficially owned, or share of Class
A common stock underlying a participating warrant owned and settled, by 5:00 p.m., Eastern Time, on the Record Date. Each Right consists
of a basic subscription right and an over-subscription privilege. The Rights will be transferable and will entitle the holder to purchase
one share of Class A common stock, at a subscription price per share of $
(the “subscription price”). In the event that holders exercise Rights for in excess of the aggregate maximum exercise amount
of $30.0 million, the amount subscribed for by each holder will be proportionally reduced, based on the amount subscribed for (not including
any over-subscription privilege subscribed for).
In addition, holders who fully
exercise their basic subscription right will be entitled to subscribe for additional shares of Class A common stock that remain unsubscribed
as a result of any unexercised basic subscription rights (the “over-subscription privilege”). The over-subscription privilege
allows a Rights holder to subscribe for additional shares of common stock at the subscription price per share on a pro rata basis
if any shares are not purchased by other holders of Rights under their basic subscription rights as of the expiration date. “Pro
rata” means in proportion to the number of shares of Class A common stock that you and the other Rights holders have subscribed
for under the over-subscription privilege.
A holder may exercise such holder’s
over-subscription privilege only if such holder exercised its basic subscription right in full and other holders of Rights do not exercise
their basic subscription rights in full. If there are not enough shares of Class A common stock to satisfy all subscriptions made under
the over-subscription privilege, the Company will allocate the remaining shares of common stock pro rata, among those over-subscribing
privilege holders. For purposes of determining if a holder has fully exercised its basic subscription right, the Company will consider
only the basic subscription right held by such holder in the same capacity. You will be required to submit payment in full for all
the shares of Class A common stock you wish to subscribe for in accordance with the terms of the Rights Offering. The Company will not
issue fractional shares of Class A common stock in the rights offering. Any excess subscription payments received by the subscription
agent will be promptly returned, without interest or penalty, after the expiration of this offering. Colonial Stock Transfer Company,
Inc. will act as the subscription agent in connection with this offering, and will determine the over-subscription allocation based on
the formula described above.
The Rights will be transferable
and are expected to trade on The Nasdaq Capital Market under the symbol “LGVNR” until 4:00 p.m., Eastern Time on ,
2023 (or, if the offer is extended, until 4:00 p.m., Eastern Time on the extended expiration date).
You are not required to exercise
any or all of your Rights. If you do not exercise your Rights and the Rights Offering is completed, the number of shares of our common
stock and participating warrants you own will not change but your percentage ownership of our total outstanding voting stock may decrease
because shares may be purchased by other stockholders in the Rights Offering. Your percentage ownership of our voting stock may also decrease
if you do not exercise your Rights in full. Please see the discussion of risk factors related to the Rights Offering, including dilution,
under the heading “Risk Factors — ‘If you do not exercise your Subscription Rights, you will likely suffer dilution’”
in the Prospectus.
The Rights will be evidenced
by a Transferable Subscription Rights Certificate issued to holders of record and will cease to have any value after the expiration time.
Enclosed are copies of the following documents:
| 2. | Transferable Subscription Rights Certificate; |
| | | |
| 3. | Instructions as to Use of Longeveron Inc. Transferable Subscription
Rights Certificates; and |
| | | |
| 4. | Notice of Guaranteed Delivery. |
Your prompt action is requested.
To exercise your Rights, you should properly complete and sign the Transferable Subscription Rights Certificate and forward it, with payment
of the subscription price in full for each share of Class A common stock subscribed for pursuant to the basic subscription right and the
over-subscription privilege, to the subscription agent, as indicated in the Prospectus. The subscription agent must receive the Transferable
Subscription Rights Certificate with payment of the subscription price on or prior to 5:00 p.m., Eastern Time, on the Expiration Date,
unless extended. All payments of the subscription price must be made in United States dollars for the full number of shares of Class
A common stock for which you are subscribing by (x) check drawn upon a United States bank payable to Colonial Stock Transfer Company
Inc., as subscription agent, or (y) wire transfer of immediately available funds to the account maintained by the subscription agent
for the purpose of accepting subscriptions in the Rights Offering. If you fail to complete and sign the required subscription forms, send
an incorrect payment amount or otherwise fail to follow the subscription procedures that apply to your exercise in this Rights Offering,
the subscription agent may, depending on the circumstances, reject your subscription or accept it only to the extent of the payment received.
You should allow a sufficient number of days to ensure delivery to the subscription agent and clearance of any payment by uncertified
personal check on or prior to 5:00 p.m., Eastern Time, on the Expiration Date. Neither the Company nor the subscription agent undertakes
any obligation to contact you concerning an incomplete or incorrect subscription form or payment, nor is the Company under any obligation
to correct such forms or payment. The Company has the sole discretion to determine whether a subscription exercise properly follows the
subscription procedures.
Once you have exercised your
Rights, such exercise may not be revoked, even if you later learn information that you consider to be unfavorable to the exercise of your
Rights. Any excess payments received by the subscription agent will be returned, without interest or deduction, promptly following the
expiration of the Rights Offering.
Additional copies of the
enclosed materials may be obtained from Okapi Partners LLC, the information agent for this Rights Offering, by calling (212) 297-0720
(bankers and brokers) or (844) 201-1170 (all others) or email at info@okapipartners.com. Any questions or requests for assistance concerning
the Rights Offering should be directed to the information agent.
| |
Very truly yours, |
| |
|
| |
LONGEVERON INC. |
Exhibit
99.3
FORM OF BENEFICIAL
OWNER ELECTION FORM
LONGEVERON INC.
The undersigned, the
beneficial owner(s) of shares of Class A common stock, par value $0.001 per share, Class B common stock, par value $0.001 per share
(collectively, the “common stock”), or warrants exercisable for shares of Class A common stock (the “participating
warrants”), of Longeveron Inc., a Delaware corporation (the “Company”), acknowledge receipt of your letter, the
prospectus dated , 2023 (the
“Prospectus”), and the other enclosed materials relating to the offering (the “Rights Offering”) of
transferable subscription rights to purchase shares of the Company’s Class A common stock (“shares,” and such
rights, the “Rights”), as described in the Prospectus. Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings given to such terms in the Prospectus.
With respect to any instructions
to exercise (or not to exercise) the Rights, the undersigned acknowledges that this form must be completed and returned in sufficient
time to allow us to process your request and submit your instructions to the subscription agent by 5:00 p.m. Eastern Time on ________,
2023, the scheduled expiration date of the Rights Offering (which may be extended by the Company).
This form will instruct you
whether to exercise the Rights to purchase shares distributed with respect to the common stock or the participating warrants held by you
for the account of the undersigned, pursuant to the terms and subject to the conditions set forth in the Prospectus and the related “Form
of Instructions as to use of Longeveron Inc. Transferable Subscription Rights Certificates.” The undersigned hereby instructs you
as follow:
(CHECK THE APPLICABLE BOXES AND PROVIDE ALL REQUIRED
INFORMATION)
| Box 1. |
☐ |
Please DO NOT EXERCISE RIGHTS for shares of Class A common stock. |
| |
|
If you checked Box 1, please sign and date this form and mail it to your broker, custodian bank or your other nominee that holds your shares. |
| |
|
|
| Box 2. |
☐ |
Please EXERCISE RIGHTS for shares of Class A common stock as set forth below. |
| |
|
If you checked Box 2, please fill out the table shown below. Next, please check Box 3 and/or Box 4, as applicable, and fill out the information indicated under Box 3 and/or Box 4, as applicable. |
| |
|
|
| |
|
Please then sign and date this form and mail it to your broker, custodian bank or other nominee that holds your shares. |
| |
|
|
| |
|
The number of Rights for which the undersigned gives instructions for exercise under the basic subscription right should not exceed the number of Rights that the undersigned is entitled to exercise. The undersigned is only entitled to the over-subscription privilege if the undersigned exercises its basic subscription right in full. |
| Per Share |
|
Number of Shares |
|
Per Share Subscription Price |
|
|
|
Payment |
| |
|
|
|
|
|
|
|
|
| Basic Subscription Right: |
|
___________ |
x |
$ |
|
= |
$ |
_______(Line 1) |
| Over-Subscription Privilege: |
|
___________ |
x |
$ |
|
= |
$ |
_______(Line 2) |
| Total Payment Required: |
|
|
|
|
|
|
$ |
_______(Sum of Lines 1 and 2 must equal total amounts in Boxes 3 and 4) |
| Box 3. |
☐ |
Payment in the following amount is enclosed: $________. |
| |
|
|
| Box 4. |
☐ |
Please deduct payment of $_______ from the following account maintained by you: |
Type of Account: __________________ Account No.:
________________
The undersigned, by signing this form:
| ● | irrevocably elect to purchase the number of shares indicated above upon the terms and conditions specified in the Prospectus; and |
| | | |
| ● | agree that if I (we) fail to pay for the shares, I (we) have elected to purchase, you may exercise any remedies available to you under
law. |
| Name of beneficial owner(s): |
|
|
| Signature of beneficial owner(s): |
|
|
| Date: |
|
|
If you are signing in your capacity
as a trustee, executor, administrator, guardian, attorney-in-fact, agent, officer of a corporation or another acting in a fiduciary or
representative capacity, please provide the following information:
| Name: |
|
|
| Capacity: |
|
|
| Address (including Zip Code): |
|
|
| |
|
|
| Telephone Number: |
|
|
PLEASE MAKE SURE THAT YOU USE THE CORRECT ADDRESS.
You may want to check this address with your broker.
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN THE
LONGEVERON INC.’S PROSPECTUS DATED , 2023 AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON
REQUEST FROM OKAPI PARTNERS LLC, THE INFORMATION AGENT, BY CALLING (212) 297-0720 (BANKERS AND BROKERS) OR (844) 201-1170 (ALL OTHERS)
OR BY EMAIL AT INFO@OKAPIPARTNERS.COM.
Exhibit 99.4
THE TERMS AND
CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN LONGEVERON INC.’S PROSPECTUS DATED , 2023 AND ARE INCORPORATED HEREIN BY REFERENCE.
COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM OKAPI PARTNERS LLC, THE INFORMATION AGENT, BY CALLING (212) 297-0720 (BANKERS
AND BROKERS) OR (844) 201-1170 (ALL OTHERS) OR BY EMAIL AT INFO@OKAPIPARTNERS.COM.
FORM OF LETTER TO BROKERS, DEALERS, BANKS
AND OTHER NOMINEE HOLDERS
LONGEVERON INC.
Transferable Subscription Rights To Purchase
Shares of Class A Common Stock Pursuant to Subscription Rights
Distributed to Stockholders and Holders of Participating Warrants
of Longeveron Inc.
,
2023
To Brokers, Dealers, Banks and Other Nominees:
This letter is being
distributed to brokers, dealers, banks and other nominees in connection with the offering (the “Rights Offering”) by
Longeveron Inc., a Delaware corporation (the “Company”), of transferable subscription rights (the “Rights”)
to purchase shares of the Company’s Class A common stock, par value $0.001 per share, distributed to all holders of record of
shares of Class A common stock, Class B common stock, par value $0.001 per share (collectively, the “common stock”), and
holders of warrants (the “participating warrants”) exercisable for Class A common stock (collectively, the
“holders”), as of 5:00 p.m., Eastern Time, on
, 2023 (the “record
date”). The Rights are described in the Company’s prospectus dated
,
2023 (the “Prospectus”), including without limitation the risk factors contained therein.
In the Rights Offering, the
Company is offering the right to purchase up to $30.0 million of its Class A common stock, as described in the Prospectus. The Rights
will expire if not exercised prior to 5:00 p.m., Eastern Time, on ,
2023 (as it may be extended, the “expiration date,” and such time, the “expiration time”).
As described in the Prospectus,
each holder as of the record date will receive, at no charge, five Rights for every share of common stock beneficially owned, or share
of Class A common stock underlying a participating warrant owned and settled, by 5:00 p.m., Eastern Time, on the record date. The Rights
will be transferable and will entitle the holder to purchase one share of Class A common stock, at a subscription price per share equal
to $ . As an example, if you owned 1,000 shares of Class A common stock as of the
record date, you would receive 5,000 Rights pursuant to your basic subscription right, and you would have the right to purchase 5,000
shares of Class A common stock in the Rights Offering pursuant to your basic subscription right. Each Right consists of a basic subscription
right and an over-subscription privilege. In the event that holders exercise basic subscription rights for an amount in excess of the
aggregate maximum exercise amount of $30.0 million, the amount subscribed for by each holder will be proportionally reduced, based on
the amount subscribed for (not including any over-subscription privilege subscribed for).
In addition, Rights holders
who fully exercise their basic subscription right will be entitled to subscribe for additional shares of Class A common stock that remain
unsubscribed as a result of any unexercised basic subscription rights (the “over-subscription privilege”). The over-subscription
privilege allows a Rights holder to subscribe for additional shares of Class A common stock at the subscription price per share on a pro
rata basis if any shares are not purchased by other holders of Rights under their basic subscription rights as of the expiration date.
“Pro rata” means in proportion to the number of shares of Class A common stock that you and the other Rights holders
have subscribed for under the over-subscription privilege. A holder may exercise such holder’s over-subscription privilege only
if such holder exercised its basic subscription right in full and other holders of Rights do not exercise their basic subscription rights
in full. If there are not enough shares of Class A common stock to satisfy all subscriptions made under the over-subscription privilege,
the Company will allocate the remaining shares of Class A common stock pro rata, among those over-subscribing privilege holders. For purposes
of determining if a holder has fully exercised its basic subscription right, the Company will consider only the basic subscription right
held by such holder in the same capacity. Each holder will be required to submit payment in full for all the shares of Class A common
stock it wishes to buy with its over-subscription privilege. The Company will not issue fractional shares of Class A common stock in the
Rights Offering. The Company can provide no assurances that each holder will actually be entitled to purchase the number of shares of
Class A common stock subscribed for pursuant to the exercise of its over-subscription privilege in full at the expiration of the Rights
Offering. If sufficient shares of Class A common stock are available, we will seek to honor over-subscription requests in full.
The Rights are evidenced by a transferable subscription
rights certificate (a “Rights Certificate”) registered in your name or the name of your nominee. The Rights are transferable
and are expected to trade on the NASDAQ Capital Market under the symbol “LGVNR” until 4:00 p.m., Eastern Time on ,
2023 (or, if the offer is extended, until 4:00 p.m., Eastern Time on the extended expiration date).
To the extent the aggregate
subscription price of the maximum number of unsubscribed shares of Class A common stock available to a holder is less than the amount
the holder actually paid in connection with the exercise of the basic subscription right or, if applicable, over-subscription privilege,
the holder will be allocated only the number of unsubscribed shares available to the holder. To the extent the amount paid by a holder
exceeds the number of shares of Class A common stock to which the holder may subscribe, any excess subscription payments received by the
Subscription Agent will be returned, without interest or penalty.
We are asking persons who hold
shares of common stock beneficially and who have received the Rights distributable with respect to those shares and participating warrants
through a broker, dealer, custodian bank or other nominee (including any mobile investment platform), as well as persons who hold certificates
of common stock and participating warrants directly and prefer to have such institutions effect transactions relating to the Rights on
their behalf, to contact the appropriate institution or nominee and request it to effect the transactions for them. In addition, we are
asking beneficial owners who wish to obtain a separate Rights Certificate to contact the appropriate nominee as soon as possible and request
that a separate Rights Certificate be issued.
Please take prompt action to
notify any beneficial owners of common stock as to the Rights Offering and the procedures and deadlines that must be followed to exercise
their Rights. If you exercise the over-subscription privilege on behalf of beneficial owners of Rights, you will be required to certify
to the subscription agent and the Company, in connection with the exercise of the over-subscription privilege, as to the aggregate number
of Rights that have been exercised pursuant to the basic subscription right, whether the basic subscription right of each beneficial owner
of Rights on whose behalf you are acting has been exercised in full and the number of shares of Class A common stock being subscribed
for pursuant to the over-subscription privilege by each beneficial owner of Rights on whose behalf you are acting.
All commissions, fees and other
expenses (including brokerage commissions and transfer taxes), other than fees and expenses of the subscription agent, the information
agent, and the dealer-manager, incurred in connection with the exercise of the Rights will be for the account of the holder of the Rights,
and none of such commissions, fees or expenses will be paid by the Company or the subscription agent.
Enclosed are copies of the following documents:
| 1. | Prospectus; |
| | | |
| 2. | Transferable Subscription Rights Certificate; |
| | | |
| 3. | Instructions as to Use of Longeveron Inc. Transferable Subscription Rights Certificates; |
| | | |
| 4. | Notice of Guaranteed Delivery; |
| | | |
| 5. | Form of Beneficial Holder Election Form; |
| | | |
| 6. | Form of Letter to Clients of Nominee Holders; and |
| | | |
| 7. | Form of Nominee Holder Certification. |
Your prompt action is requested.
To exercise the Rights, as indicated in the Prospectus, you should deliver to the subscription agent the properly completed and signed
Rights Certificate with payment of the subscription price in full for each share subscribed for pursuant to the Right. The subscription
agent must receive the Rights Certificate with payment of the subscription price prior to the expiration time. All payments of the
subscription price must be made in United States dollars for the full number of shares of Class A common stock for which you are subscribing
by (x) check drawn upon a United States bank payable to Colonial Stock Transfer Company Inc., as subscription agent, or (y) wire
transfer of immediately available funds to the account maintained by the subscription agent for the purpose of accepting subscriptions
in the Rights Offering. If you fail to complete and sign the required subscription forms, send an incorrect payment amount or otherwise
fail to follow the subscription procedures that apply to your exercise in this Rights Offering, the subscription agent may, depending
on the circumstances, reject your subscription or accept it only to the extent of the payment received. You should allow a sufficient
number of days to ensure delivery to the subscription agent and clearance of any payment by uncertified personal check on or prior to
5:00 p.m., Eastern Time, on the Expiration Date. Neither the Company nor the subscription agent undertakes any obligation to contact you
concerning an incomplete or incorrect subscription form or payment, nor is the Company under any obligation to correct such forms or payment.
The Company has the sole discretion to determine whether a subscription exercise properly follows the subscription procedures. Once
a holder has exercised its Rights, such exercise may not be revoked, even if the holder later learns information that it considers to
be unfavorable to the exercise of its Rights.
Additional copies of the
enclosed materials may be obtained from Okapi Partners LLC, the information agent, by telephone at (212) 297-0720 (bankers and brokers)
or (844) 201-1170 (all others) or by email at info@okapipartners.com. Any questions or requests for assistance concerning the Rights Offering
should be directed to the information agent.
| |
Very truly yours, |
| |
|
| |
LONGEVERON INC. |
NOTHING IN THE PROSPECTUS OR IN THE ENCLOSED DOCUMENTS
SHALL CONSTITUTE YOU OR ANY PERSON AS AN AGENT OF LONGEVERON INC., THE SUBSCRIPTION AGENT, THE INFORMATION AGENT, OR ANY OTHER PERSON
MAKING OR DEEMED TO BE MAKING OFFERS OF THE SECURITIES ISSUABLE UPON VALID EXERCISE OF THE RIGHTS, OR AUTHORIZE YOU OR ANY OTHER PERSON
TO MAKE ANY STATEMENTS ON BEHALF OF ANY OF THEM WITH RESPECT TO THE RIGHTS OFFERING EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE PROSPECTUS.
3
Exhibit
99.5
THE
TERMS AND CONDITIONS OF THE RIGHTS OFFERING ARE SET FORTH IN LONGEVERON INC.’S PROSPECTUS DATED ,
2023 AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM OKAPI PARTNERS LLC, THE INFORMATION
AGENT, BY CALLING (212) 297-0720 (BANKERS AND BROKERS) OR (844) 201-1170 (ALL OTHERS) OR BY EMAIL AT INFO@OKAPIPARTNERS.COM.
FORM
OF LETTER TO CLIENTS OF NOMINEE HOLDERS
LONGEVERON INC.
Transferable
Subscription Rights To Purchase
Shares of Class A Common Stock Pursuant to Subscription Rights
Distributed to Stockholders and Holders of Participating Warrants
of Longeveron Inc.
,
2023
To
Our Clients:
Enclosed
for your consideration are a prospectus, dated
, 2023 (the “Prospectus”), and
the “Instructions as to Use of Longeveron Inc. Rights Certificates” relating to the offering (the “Rights
Offering”) by Longeveron Inc., a Delaware corporation (the “Company”), of transferable subscription rights (the
“Rights”) to purchase shares of the Company’s Class A common stock, par value $0.001 per share, distributed to all holders of record of shares of the Class A common
stock, Class B common stock, par value $0.001 per share (collectively, the “common stock”) and holders of warrants (the
“participating warrants”) exercisable for Class A common stock (collectively the “holders”) at 5:00 p.m.,
Eastern Time, on , 2023 (the “record
date”). The Rights are described in the Prospectus.
In
the Rights Offering, the Company is offering the right to purchase up to $30.0 million of its Class A common stock, as described
in the Prospectus. The Rights will expire if not exercised prior to 5:00 p.m., Eastern Time, on ,
2023 (as it may be extended, the “expiration date,” and such time, the “expiration time”). If you do not exercise
your Rights at or before the expiration date of this Rights Offering, your unexercised Rights will be null and void and will have no
value.
Please
note that since you hold your shares in the name of a broker, dealer, or other nominee who uses the services of the Depository Trust
Company, you must exercise your Rights before 5:00 p.m., Eastern Time, on the expiration date.
As
described in the accompanying Prospectus, each holder as of the record date will receive, at no charge, five Rights for every share of
common stock beneficially owned or share of Class A common stock underlying a participating warrant owned and settled, by 5:00 p.m.,
Eastern Time, on the record date, referred to as the basic subscription right. Each Right will be transferable and will allow the holder
thereof to purchase one share of Class A common stock at the subscription price of $ per
share (the “subscription price”). As an example, if you owned 1,000 shares of Class A common stock as of the record date,
you would receive 5,000 Rights, and you would have the right to purchase 5,000 shares of Class A common stock in the Rights Offering
pursuant to your basic subscription right. See “The Rights Offering—The Subscription Rights” in the Prospectus.
Each Right consists of a basic subscription right and an over-subscription privilege. In the event that holders exercise Rights for in
excess of the aggregate maximum exercise amount of $30.0 million, the amount subscribed for by each holder will be proportionally reduced,
based on the amount subscribed for (not including any over-subscription privilege subscribed for).
In
addition, holders who fully exercise their basic subscription right will be entitled to subscribe for additional shares of Class A common
stock that remain unsubscribed as a result of any unexercised basic subscription rights (the “over-subscription privilege”).
The over-subscription privilege allows a holder to subscribe for additional shares of Class A common stock at the subscription price
per share on a pro rata basis if any shares are not purchased by other holders of Rights under their basic subscription
rights as of the expiration date. “Pro rata” means in proportion to the number of shares of Class A common stock that
you and the other Rights holders have subscribed for under the over-subscription privilege. A holder may exercise such holder’s
over-subscription privilege only if such holder exercised its basic subscription right in full and other holders of Rights do not exercise
their basic subscription rights in full. If there are not enough shares of Class A common stock to satisfy all subscriptions made under
the over-subscription privilege, the Company will allocate the remaining shares of Class A common stock pro rata, among those over-subscribing
privilege holders. For purposes of determining if a holder has fully exercised its basic subscription right, the Company will consider
only the basic subscription right held by such holder in the same capacity. Each holder will be required to submit payment in full for
all the shares of Class A common stock it wishes to buy with its over-subscription privilege. The Company will not issue fractional shares
of Class A common stock in the Rights Offering. The Company can provide no assurances that each holder will actually be entitled to purchase
the number of shares of Class A common stock subscribed for pursuant to the exercise of its over-subscription privilege in full at the
expiration of the Rights Offering. If sufficient shares of Class A common stock are available, we will seek to honor over-subscription
requests in full.
The
Rights are evidenced by a transferable subscription rights certificate (a “Rights Certificate”). The Rights are transferable
and are expected to trade on the NASDAQ Capital Market under the symbol “LGVNR” until 4:00 p.m., Eastern Time on ,
2023 (or, if the offer is extended, until 4:00 p.m., Eastern Time on the extended expiration date).
To
the extent the aggregate subscription price of the maximum number of unsubscribed shares of Class A common stock available to a holder
is less than the amount the holder actually paid in connection with the exercise of the basic subscription right or, if applicable, over-subscription
privilege, the holder will be allocated only the number of unsubscribed shares available to the holder. To the extent the amount paid
by a holder exceeds the number of shares of Class A common stock to which the holder may subscribe, any excess subscription payments
received by the Subscription Agent will be returned, without interest or penalty.
THE
MATERIALS ENCLOSED ARE BEING FORWARDED TO YOU AS THE BENEFICIAL OWNER OF CLASS A COMMON STOCK CARRIED BY US IN YOUR ACCOUNT BUT NOT REGISTERED
IN YOUR NAME. EXERCISES OF RIGHTS MAY BE MADE ONLY BY US AS THE RECORD OWNER AND PURSUANT TO YOUR INSTRUCTIONS. Accordingly, we request
instructions as to whether you wish us to elect to subscribe for any shares of common stock to which you are entitled pursuant to the
terms and subject to the conditions set forth in the enclosed Prospectus. However, we urge you to read the Prospectus and other enclosed
materials carefully before instructing us to exercise your Rights.
Your
instructions to us should be forwarded as promptly as possible in order to permit us to exercise Rights on your behalf in accordance
with the provisions of the Rights Offering. The Rights Offering will expire at 5:00 p.m., Eastern Time, on the expiration date. Once
you have exercised your basic subscription right and over-subscription privilege, such exercise may not be revoked, even if you later
learn information that you consider unfavorable to the exercise of your Rights.
If
you wish to have us, on your behalf, exercise the Rights for any shares of common stock to which you are entitled, please so instruct
us by timely completing, executing and returning to us the instruction form attached to this letter.
With
respect to any instructions to exercise (or not to exercise) Rights, the enclosed Beneficial Holder Election Form must be completed and
returned in sufficient time to allow us to process your request and submit your instructions to the subscription agent by 5:00 p.m.,
Eastern Time, on , 2023,
the expiration date of the Rights Offering (which may be extended by the Company).
Additional
copies of the enclosed materials may be obtained from Okapi Partners LLC, the information agent, by telephone at (212) 297-0720 (bankers
and brokers) or (844) 201-1170 (all others) or by email at info@okapipartners.com. Any questions or requests for assistance concerning
the Rights Offering should be directed to the information agent.
Exhibit 99.6
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING
ARE SET FORTH IN LONGEVERON INC.’S PROSPECTUS DATED , 2023 (THE “PROSPECTUS”) AND ARE INCORPORATED HEREIN BY REFERENCE.
COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM OKAPI PARTNERS LLC, THE INFORMATION AGENT, BY CALLING (212) 297-0720 (BANKERS
AND BROKERS) OR (844) 201-1170 (ALL OTHERS) OR BY EMAIL AT INFO@OKAPIPARTNERS.COM.
FORM OF NOMINEE
HOLDER CERTIFICATION
LONGEVERON INC.
The undersigned, a broker, dealer, bank or other
nominee holder of subscription rights (the “Rights”) to purchase shares of Class A common stock, par value $0.001 per
share, of Longeveron Inc., a Delaware corporation (the “Company”), pursuant to the rights offering (the “Rights Offering”)
described in the Company’s Prospectus, hereby certifies to the Company and Colonial Stock Transfer Company, Inc., as subscription
agent for the Rights Offering, that (1) the undersigned has exercised on behalf of the beneficial owners thereof (which may include the
undersigned), Rights for the number of shares specified below pursuant to the basic subscription right (as described in the Prospectus),
and the over-subscription privilege (as described in the Prospectus), and (2) to the extent any beneficial owner has exercised their oversubscription
privilege, each such beneficial owner’s basic subscription right has been exercised in full:
|
Number of shares
(including underlying warrants),
owned on the Record Date |
Number of shares
subscribed for
pursuant to basic subscription right |
Number of shares subscribed
for pursuant to
over-subscription privilege |
1.
2.
3.
4.
5.
Name of Bank, Broker, Trustee, Depository or Other Nominee:
|
By: |
|
|
| |
Authorized Signature |
|
| |
|
|
| Name: |
|
|
| |
(Please print or type) |
|
| |
|
|
| Title: |
|
|
| |
(Please print or type) |
|
Provide the following information, if applicable:
Depository Trust Company (“DTC”) Participant Number:
Participant:
|
By: |
|
|
| |
Authorized Signature |
|
| |
|
|
| Name: |
|
|
| |
(Please print or type) |
|
| |
|
|
| Title: |
|
|
| |
(Please print or type) |
|
DTC Subscription Confirmation Number(s):
Exhibit 99.7
THE TERMS AND CONDITIONS OF THE RIGHTS OFFERING
ARE SET FORTH IN LONGEVERON INC.’S PROSPECTUS DATED , 2023 (THE “PROSPECTUS”)
AND ARE INCORPORATED HEREIN BY REFERENCE. COPIES OF THE PROSPECTUS ARE AVAILABLE UPON REQUEST FROM OKAPI PARTNERS LLC, THE INFORMATION
AGENT, BY CALLING (212) 297-0720 (BANKERS AND BROKERS) OR (844) 201-1170 (ALL OTHERS) OR BY EMAIL AT INFO@OKAPIPARTNERS.COM.
FORM
OF NOTICE OF GUARANTEED DELIVERY FOR
RIGHTS CERTIFICATES
LONGEVERON iNC.
This form, or one substantially equivalent hereto,
must be used to exercise the transferable subscription rights (the “Rights”) pursuant to the rights offering (the “Rights
Offering”) as described in the prospectus dated ,
2023 (the “Prospectus”) of Longeveron Inc., a Delaware corporation (the “Company”), if a holder of Rights cannot
deliver the certificate(s) evidencing the Rights (the “Rights Certificate”), to the subscription agent listed below (the “subscription
agent”) prior to 5:00 p.m., Eastern time, on ,
2023 (as it may be extended, the “expiration date” and the “expiration time”).
This form must be delivered by hand or sent by
first class mail, overnight courier or sent by email transmission to the subscription agent, and must be received by the subscription
agent prior to the expiration time. See “The Rights Offering — Guaranteed Delivery Procedures.”
Payment of the subscription price of $ per
share of the Company’s Class A common stock, par value $0.001 per share, subscribed for upon exercise of such Rights must be received
by the subscription agent in the manner specified in the Prospectus prior to the Expiration time even if the Rights Certificate evidencing
such Rights is (are) being delivered pursuant to the Guaranteed Delivery Procedures thereof. See “The Rights Offering —
Guaranteed Delivery Procedures.”
Failure to pay the subscription price in full
prior to the Expiration time will result in a forfeiture of the Rights.
By First Class Mail, Hand Delivery, Overnight
Courier:
Colonial Stock Transfer Company, Inc.
Attn: Amy Parker
7840 S 700 E.
Sandy, UT 84070
Telephone Number for Confirmation:
(801) 355-5740
If you have other questions or need assistance,
please contact Okapi Partners LLC, the information agent, by telephone at (212) 297-0720 (bankers and brokers) or (844) 201-1170 (all
others) or by email at info@okapipartners.com.
Delivery of this instrument to an address other
than as set forth above does not constitute a valid delivery.
The undersigned, a member firm of the NYSE, NASDAQ
or other national exchange, or bank or trust company, must communicate this guarantee and indicate the number of shares of Class A common
stock subscribed for in connection with this guarantee (separately disclosed as to the basic subscription right and the over-subscription
privilege, subject to proration, as described in the Prospectus) to the subscription agent. The subscription agent must receive this guarantee
and payment in full for all subscribed shares of Class A common stock subscribed for in connection with this guarantee prior to the expiration
time. In addition, the subscription agent must receive a properly completed and signed Rights Certificate no later than the close of business
on the second business day after the expiration date. Failure to comply with these requirements will result in a forfeiture of any Rights
not otherwise validly exercised by the expiration date as set forth in the Prospectus.
Ladies and Gentlemen:
The undersigned, a member firm of the NYSE, NASDAQ
or other national exchange, or a bank or trust company, having an office or correspondent in the United States, guarantees delivery to
the subscription agent (i) prior to 5:00 p.m., Eastern Time, on the second business day after the expiration date ( ,
2023, unless extended, as described in the Prospectus) of a properly completed and executed Rights Certificate and (ii) prior to 5:00 p.m.,
Eastern Time, on the expiration date, payment in full for all subscribed shares of Class A common stock. Participants should notify the
subscription agent prior to covering through the submission of a physical security directly to the subscription agent based on a guaranteed
delivery that was submitted via the PTOP platform of The Depository Trust Company (“DTC”).
Price for shares of Class A common stock subscribed
for under the basic subscription right and for any additional shares of common stock subscribed for pursuant to the over-subscription
privilege, subject to proration, as described in the Prospectus, as subscription for such shares of Class A common stock is indicated
herein or in the Rights Certificate.
Method of delivery of the Notice of Guaranteed Delivery (circle one):
| A. |
Through DTC |
| B. |
Direct to Colonial Stock Transfer Company, Inc., as subscription agent. |
Please reference below the registration of the Rights to be delivered.
| Name of Firm |
|
|
|
| Authorized Signature |
|
|
|
| DTC Participant Number |
|
|
|
| Title |
|
|
|
| Contact Name |
|
|
|
| Address |
|
|
|
| City |
|
|
State |
| Phone Number |
|
|
|
| Date: |
|
|
|
The institution that completes this form must
communicate the guarantee to the subscription agent and must deliver the Rights Certificate to the subscription agent within the time
period shown in the Prospectus. Failure to do so could result in a financial loss to such institution.
Exhibit 107
Calculation of Filing Fee Tables
Form S-1
(Form Type)
Longeveron Inc.
(Exact Name of Registrant as Specified in its Charter)
Table 1: Newly Registered Securities
| | |
Security
Type | |
Security
Class
Title (1) | |
Fee
Calculation
Rule | |
Amount
Registered (4) | | |
Proposed
Maximum
Offering
Price Per
Share (4) | | |
Maximum
Aggregate
Offering
Price(5) | | |
Fee
Rate | | |
Amount of
Registration
Fee (2)(3) | |
| Newly Registered Securities | |
| Fees to Be Paid | |
Other | |
Subscription Rights to purchase Class A common stock, par value $0.001
per share(6) | |
457(g) | |
| — | | |
$ | — | | |
| — | | |
| — | | |
| — | |
| | |
Equity | |
Class A common stock, issuable upon exercise of Subscription Rights
| |
457(o) | |
| — | | |
| — | | |
| | | |
| | | |
| | |
| | |
Equity | |
Class A common stock, subsequent placement | |
457(o) | |
| — | | |
$ | — | | |
$ | 30,000,000 | | |
| 0.00011020 | | |
$ | 3,306 | |
| | |
Total Offering Amounts | |
| | | |
$ | 30,000,000 | | |
| | | |
$ | 3,306 | |
| | |
Total Fee Offset | |
| | | |
| | | |
| | | |
| | |
| | |
Net Fee Due | |
| | | |
| | | |
| | | |
$ | 3,306 | (7) |
| (1) | This registration statement relates to: (a) transferable
subscription rights to purchase Class A common stock of the Registrant and (b) the shares of the Registrant’s Class A common stock
issuable upon the exercise of such transferable subscription rights pursuant to the rights offering. |
| (2) | No separate registration fee is payable with respect to the
subscription rights being offered hereby since the subscription rights are being registered in the same registration statement as the
Class A common stock underlying the subscription rights. |
| (3) | No separate registration fees are payable with respect to the equity
securities offered hereby since the aggregate maximum offering price of all equity securities issued by the Registrant pursuant to this
registration statement from the exercise of transferable subscription rights and any subsequent placement of offered shares will not exceed
$30,000,000. |
| | |
| (4) | The securities registered hereunder include an indeterminate number
of shares of Class A common stock which shall consist of up to $30,000,000 of Class A common stock. In accordance with Rule 416 under
the Securities Act of 1933, as amended, this registration statement shall be deemed to cover an indeterminate number of additional shares
to be offered or issued from stock splits, stock dividends or similar transactions with respect to the shares being registered. |
| (5) | Estimated solely for the purpose of calculating the registration fee. Subject to Rule 462(b) under the
Securities Act, the aggregate maximum offering price of all securities issued by the Registrant pursuant to this registration
statement from the exercise of transferable subscription rights and any subsequent placement of offered shares will not exceed
$30,000,000. |
| (6) | Includes the resale of transferable subscription rights distributed to and that may be resold by the Registrant’s principal stockholders,
and certain of the Registrant’s directors and officers during the period for which the transferable subscription rights may be transferred
in accordance with the terms of the rights offering. |
v3.23.2
Document And Entity Information
|
3 Months Ended |
Mar. 31, 2023 |
|---|
| Document Information Line Items |
|
| Entity Registrant Name |
Longeveron Inc.
|
| Document Type |
S-1/A
|
| Amendment Flag |
true
|
| Amendment Description |
The prospectus accompanying this registration statement is being used to register and offer transferable Subscription Rights to purchase shares of Class A common stock and the shares of Class A common stock issuable upon the exercise of such Subscription Rights, to existing holders of common stock of the registrant (and holders of warrants exercisable for common stock), the placement by R.F. Lafferty, the Dealer Manager of any unsubscribed shares of Class A common stock registered hereunder, for an additional period of up to 45 days following expiration of the offering, as well as the potential resale by our principal stockholders and certain of our directors and executive officers of transferable Subscription Rights during the period for which the transferable Subscription Rights may be transferred in accordance with the terms of the Rights Offering. We will not receive any proceeds from any sale of Subscription Rights undertaken by our principal stockholders and such directors and executive officers.
|
| Entity Central Index Key |
0001721484
|
| Entity Filer Category |
Non-accelerated Filer
|
| Entity Small Business |
true
|
| Entity Emerging Growth Company |
true
|
| Entity Ex Transition Period |
false
|
| Entity Incorporation, State or Country Code |
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