InVivo Therapeutics Holdings Corp (NVIVQ)

[Seminole Red]

dilution

InVivo Therapeutics Holdings Corp. (NVIV) today announced that it had exchanged certain outstanding warrants that were issued as part of a financing in 2014 (the “2014 Warrants”) for shares of the company’s common stock.
The 2014 Warrants have anti-dilution features such that the exercise price of the warrants decreases if the company sells shares of its common stock for consideration below the exercise price of the 2014 Warrants, and upon certain other events. In addition, the number of warrants increases inversely to the exercise price decrease. These features can lead to extreme levels of dilution to existing shareholders and can be a significant barrier for potential new investors.
The company negotiated individual exchange agreements with certain of the holders of the 2014 warrants, whereby warrants representing the vast majority of the existing 2014 Warrants were exchanged for 2,021,419 new shares of common stock. As a result of the issuance of the shares of common stock, the exercise price and number of shares subject to the remaining 2014 Warrants were adjusted.
Mark Perrin, InVivo’s Chief Executive Officer and Chairman, said, “We believe that these exchange agreements benefit our shareholders and the company by creating a substantially cleaner balance sheet for the company and removing a significant financial overhang. This puts us in a much stronger financial position as we work toward reopening enrollment in The INSPIRE Study and delivering on our mission for spinal cord injury patients.”