Zosano Pharma (ZSAN) Prices Common Stock, Warrants Private Placement at $1.57/Unit

August 16, 2016 8:44 AM EDT

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Zosano Pharma Corporation (Nasdaq: ZSAN) announced that it has entered into a securities purchase agreement to sell shares of its common stock and warrants to purchase shares of its common stock at a price of $1.57 per unit in a private placement. This financing will generate aggregate gross proceeds at closing of approximately $7.5 million from the sale of the units, before deducting placement agent fees and estimated offering expenses. The Company may also receive up to an additional $14.4 million upon exercise of the warrants. The investors have no obligation to exercise the warrants, which are exercisable in whole or in part in their sole discretion. A select group of qualified institutional buyers, institutional accredited investors, accredited investors and certain members of management and board of directors participated in the private placement.

At the closing, Zosano Pharma will sell 4.8 million shares of common stock and warrants to purchase 9.6 million shares of common stock for aggregate gross proceeds of approximately $7.5 million. The consolidated closing bid price for the common stock on the Nasdaq Capital Market on the day of pricing, August 15, 2016 was $1.32.

The Company will issue two types of warrants to purchase its common stock in connection with the private placement, Series A warrants and Series B warrants. The Series A warrants will have an exercise price of $1.45 per share of common stock underlying the Series A warrant and will expire twelve (12) months and one (1) week from the date of issuance. The Series B warrants will have an exercise price of $1.55 per share of common stock underlying the Series B warrant and will expire five (5) years from the date of issuance. The transaction is expected to close on or about August 19, 2016, subject to customary closing conditions. Zosano Pharma expects to use the proceeds from the private placement to advance the company’s M207 program towards FDA registration and for general corporate purposes.

Guggenheim Securities, LLC served as sole lead placement agent and Roth Capital Partners, LLC served as co-placement agent for the transaction.

The securities being sold in the private placement have not been registered under the Securities Act of 1933, as amended, or state securities laws and may not be offered or sold in the United States absent registration with the Securities and Exchange Commission (SEC) or an applicable exemption from such registration requirements. Zosano Pharma has agreed to file a registration statement with the SEC covering the resale of the shares of common stock issued in the private placement, as well as the shares of common stock issuable upon exercise of the warrants issued in the private placement.

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