Business
Lifecore Biomedical Raises Capital with Private Placement of Convertible Preferred Stock; Amends Credit Facilities
$38.75 million Private Placement of Series A Convertible Preferred Stock to Support Working Capital and Capital Expenditures While Pursuing Ongoing Divestment
About this update from Lifecore Biomedical, Inc.
[{"type":"text","content":"$38.75 million Private Placement of Series A Convertible Preferred Stock to Support Working Capital and Capital Expenditures While Pursuing Ongoing Divestment Process of non-CDMO Assets Credit Facilities Amended to Increase Liquidity and Provide Financial Covenant Relief Nathaniel Calloway, PhD and Christopher Kiper Appointed to the Board of Directors CHASKA, Minn., Jan. 09, 2023 (GLOBE NEWSWIRE) -- Lifecore Biomedical, Inc. (“Lifecore” or the “Company”), a fully integrated contract development and manufacturing organization (“CDMO”), today announced that it has entered into a securities purchase agreement with a select group of institutional investors, pursuant to which the Company issued and sold 38,750 shares of newly designated Series A convertible preferred stock in a private placement for total gross proceeds of $38.75 million before deducting offering expenses. The private placement was led by Legion Partners and 22NW Fund, LP, with participation by existing and new investors including Wynnefield Capital, Cove Street Partners and 325 Capital. The Company expects to use the proceeds to support its working capital requirements and help address strong demand it is experiencing for sterile injectable pharmaceutical products while it pursues the final phases of its divestment process of non-CDMO assets, as well as for capital expenditures, repayment of the Company’s indebtedness and general corporate purposes. The Company also announced the amendment of its credit facilities to provide for increased overall liquidity and amended financial covenants to allow Lifecore to achieve its growth potential. In connection with the issuance of the Series A convertible preferred stock, Nathaniel Calloway, PhD and Christopher Kiper were appointed to the Company’s Board of Directors. The Company also amended its credit facilities to provide for, among other things, increased overall liquidity, including the deferral of $2.2 million of quarterly debt repayments until the first quarter of calendar year 2025, and relief from certain financial covenants. “We are extremely excited for 2023 and remain fully focused on taking advantage of the strong market tailwinds that are generating a myriad of opportunities within our development pipeline with some of the world’s leading pharmaceutical companies,” commented James G. Hall, President and Chief E...