aibioLipella Pharmaceuticals files to register 5,617,259 shares for resale, then sets up ATM
Tickers LIPO
The shares come from Series B and Series C preferred stock and placement agent warrants tied to its private offerings. On April 4, 2025 Lipella added an at-the-market program of up to $2,641,881.
Key facts
- Company
- Lipella Pharmaceuticals Inc. (OTC: LIPO)
- News type
- Financings
- Primary source
- Lipella Pharmaceuticals Inc. S-3 (2025-03-28)
Lipella Pharmaceuticals Inc. (Nasdaq: LIPO) has filed a Form S-3 shelf registration with the Securities and Exchange Commission to cover the resale of up to 5,617,259 shares of common stock. The preliminary prospectus is dated March 27, 2025. Lipella will not receive money from sales of these shares. The selling stockholders would sell them.
Where the shares come from
The shares fall into three groups: 4,921,483 shares issuable when Series B non-voting convertible preferred converts, 536,959 shares issuable when Series C voting convertible preferred converts, and 158,817 shares issuable when placement agent warrants are exercised.
The Series B shares came from a best efforts private offering of up to $7,200,000 that began in December 2024. Lipella sold 25,975 shares at $100 each that month, then 46,025 more at $100 each in closings between February 25, 2025 and March 12, 2025. Conversion prices for those shares ranged from $2.18 to $3.13 per share.
Spartan Capital Securities, LLC was the placement agent. Its $1,200,000 over-allotment option was exercised in full, and Spartan and its designee received the Series C preferred shares and the placement agent warrants. At each closing Lipella owed Spartan a placement fee of ten percent of gross proceeds and a non-accountable fee of two percent, plus a $360,000 consulting fee paid pro rata across closings.
A subsequent offering followed on March 17, 2025, in which Lipella sold warrants to buy up to 72,000 shares of Series B preferred at $0.125 per warrant. Spartan was the exclusive placement agent again. The warrants can be exercised for nine months at $100 per share, and the prospectus says they may expire unexercised, in which case the company receives no cash.
The at-the-market program
On April 4, 2025, Lipella signed an at-the-market sales agreement with H.C. Wainwright & Co., LLC, which acts as sales agent for up to $2,641,881 of common stock. Wainwright receives a 3.0% commission on gross sales, and Lipella agreed to reimburse Wainwright's legal fees up to $100,000 in the aggregate. Lipella is not obligated to sell any shares.
The prospectus supplement says Sullivan & Worcester LLP of New York will pass on the validity of the shares for Lipella, and that Ellenoff Grossman & Schole LLP of New York is counsel to Wainwright.
An SEC rule limits the program. Lipella put its non-affiliate market value at $10,819,396.80. Because public float is below $75 million, primary offerings are capped at one-third of public float in any 12-month period. The prospectus supplement says Lipella had already sold approximately $964,590 of securities under that rule in the prior 12 months.
The business and the trial record
Lipella reformulates existing generic drugs. Its lead candidate, LP-10, is a liposomal form of tacrolimus for radiation cystitis, a bleeding condition in cancer survivors who had pelvic radiation. The company says no FDA-approved drug treats it.
The phase 2a trial enrolled 13 subjects in an open-label, dose-escalation design, and results were reported in the first quarter of 2023. Because the study was open-label, it did not compare LP-10 with a placebo. After a type-C meeting with the FDA on November 7, 2023, the company agreed to a placebo-controlled phase 2b trial. It says that submission is complete. No phase 2b data exist yet.
The LP-310 program, an oral formulation for oral lichen planus, began a phase 2a dose escalation in 2024. Lipella says eight participants received 0.25 mg in the first cohort, with promising initial results and no product-related serious adverse events. That trial is expected to finish in the second quarter of 2025.
The money
Lipella reported revenue of $536,357 for 2024, up from $449,617 in 2023. The net loss was $5.0 million in 2024, up from $4.6 million in 2023. Cash used in operations was $4.0 million in 2024, against $3.2 million a year earlier.
That operating outflow was larger than the $3.3 million of cash and cash equivalents the company held at the end of 2023. The warrant cash and the sales program are therefore important to it, but neither is assured. Warrant holders must choose to exercise, and Lipella need not sell any shares under the sales agreement.