Molekule Group, Inc. Announces Closing of $10.0 Million Private Placement and Deferral of $6.0 million Principal Amortization Through 2025

PALM BEACH GARDENS, Fla., May 08, 2023 (GLOBE NEWSWIRE) -- Molekule Group, Inc. (“Molekule” or the “Company”) (Nasdaq: MKUL), reported today the closing of its previously-announced approximately $10 million private placement with a single institutional investor.

The transaction consists of (i) 3,400,000 shares of the Company’s common stock, (ii) a Series A Warrant to purchase up to 3,125,000 shares of common stock, (iii) a Series B Warrant to purchase up to 6,250,000 shares of common stock, and (iv) a Pre-Funded Warrant to purchase up to 2,850,000 shares of common stock. The Company received gross proceeds of $9,971,500.

The Series A Warrant has an exercise price of $1.60 per share, a 5% premium to the five-day volume-weighted average price (“VWAP”) per share at signing; the Series B Warrant has an exercise price of $1.84 per share, a 20% premium to the five-day VWAP at signing; and the Pre-Funded Warrant has a nominal exercise price of $0.01 per share. The Series A and Series B Warrants become exercisable following the receipt of stockholder approval and the filing and distribution of an information statement to the Company’s stockholders; and the Pre-Funded Warrant is currently exercisable. The Series A Warrant terminates eight months after it becomes exercisable. The Series B Warrants and the Pre-Funded Warrant terminate five years after they become exercisable.

The Company also agreed to reduce the exercise price of 1,500,000 outstanding warrants owned by the institutional investor to $2.00.

In addition, as previously announced, on May 2, 2023, the Company reached an agreement in principal, subject to final documentation, with Silicon Valley Bank, a division of First Citizens Bank (“SVB”) to amend its mezzanine loan agreement so as to provide for the deferral of principal payments from April 2024 to April 2025. The Company also reached an agreement in principal with SVB, subject to final documentation, to amend our senior term loan agreement so as to extend the maturity date from April 2026 to March 2028. The amendment of its mezzanine loan agreement to defer principal payments and the amendment of its senior term loan agreement to extend the maturity date collectively result in a deferral of approximately $6.1 million of principal payments through Q1 2025. The Company believes that such additional flexibility will support long-term growth as it continues to aggressively market its enterprise Safe Air-as-a-Service platform, conduct research and development and fund operations.