Lantern Pharma Inc. (NASDAQ: LTRN) entered into a definitive agreement for a registered direct offering expected to raise $4.4 million upfront, with potential additional proceeds of $4.85 million if warrants are fully exercised.

The clinical-stage oncology company will sell 2,135,923 shares of common stock at $2.06 per share. The offering includes unregistered warrants to purchase an equivalent number of shares at $2.27 per share, exercisable six months after issuance and expiring five years after the initial exercise date.

The transaction involves existing shareholders and one institutional investor, with closing expected around May 14, 2026, subject to customary conditions. Rodman & Renshaw LLC serves as the exclusive placement agent.

Lantern Pharma announced plans to spin off its AI platform, withZeta.ai, into an independent business entity under CEO Panna Sharma's leadership. The company intends for this entity to become a publicly listed company on a national exchange.

Ryan Lane from Empery Asset Management, whose funds led the financing, stated: "We started using the AI platform shortly after its public release and have found the prompt results exceptionally useful for our in-house compound viability analysis versus generic LLM models."

The company plans to use net proceeds for working capital and general corporate purposes. The shares are being offered under a shelf registration statement filed with the Securities and Exchange Commission that became effective June 10, 2024.

Lantern Pharma develops targeted cancer therapies using artificial intelligence and machine learning platforms, with multiple clinical-stage drug programs focused on oncology treatments.