Aileron Therapeutics, Inc. (ALRN) signed a common share purchase agreement with Lincoln Park Capital Fund (LPC).
The Purchase agreement signed by clinical-stage bio-pharmaceutical company that is discovering and developing novel medicines to improve the outcomes and the quality of life of cancer patients with Chicago-based institutional investor and also its current shareholder was for an amount of up to $15 million.
LPC purchased $500,000 of ALRN’s common stock at a per share price of $1.36 as an initial move related to execution of the purchase agreement. After that transaction Aileron will have a non-obligatory option of selling shares of its common stock to LPC. The option will be exercisable up to an additional amount of $14.5 million and will be valid through next thirty six month, but subject to fulfillment of certain conditions. Those also include a registration statement being filed and declared effective by the SEC.
The price of additional shares to be sold in future will be on the prevailing market prices at the time of each sale to LPC. And there should be no upper limit to the price at which LPC may be purchasing common stocks from Aileron.
As part of the purchase agreement, LPC also agreed not to create or involve by any mean, in any hedging or direct or indirect short selling of Aileron’s shares of common stock. There have been no derivatives, other class shares or warrants associated with the current agreement between Aileron and LPC. Aileron also issued LPC with shares of its common stock as a commitment fee to consider entering into this agreement. Aileron will have the right to terminate the agreement any time, and it will not have to pay any penalty or additional costs to exercise that sole discretionary power.
Aileron will be utilizing the net proceeds of the transaction for general corporate purposes and also to extend funding to support clinical strategy of developing its ALRN-6924.