Athersys Extends Near Term Liquidity with Proceeds from Warrant Inducement and Global ARDS License with Healios to Explore Strategic Alternatives

Athersys, Inc. (Nasdaq: ATHX), (“Athersys” or the “Company”) a cell therapy and regenerative medicine company developing MultiStem (invimestrocel) for critical care indications, announces it has entered into a warrant exercise inducement offer letter to raise gross proceeds of up to approximately $3.9 million from the exercise of 28,124,590 warrants and received the first tranche payment of $1.5 million from HEALIOS K.K. (“Healios”) under the acute respiratory distress syndrome (“ARDS”) global license.

On October 11, 2023, Athersys entered into a warrant exercise inducement offer letter (the “Inducement Letter”) with a holder of certain existing warrants (“Holder”) to receive new warrants to purchase up to a number of shares of common stock equal to 200% (the “Inducement Warrants”) of the number of warrant shares issued pursuant to the exercise of such certain existing warrants to purchase shares of common stock (the “Existing Warrants”) pursuant to which the Holder agreed to exercise for cash their Existing Warrants to purchase up to 28,124,590 shares of the Company’s common stock, at a reduced exercise price of $0.1395 per share (the “Reduced Exercise Price”). The closing of this transaction occurred on October 16, 2023. The Company engaged A.G.P./Alliance Global Partners (“AGP”) to act as its financial advisor in connection with the transactions summarized above and will pay AGP a fee of $275,000.

On October 12, 2023, the Company received a payment of $1.5 million per the recently executed Memorandum of Understanding (“MOU”) with Healios for global rights to develop and commercialize MultiStem for the treatment of ARDS. Under the terms of the MOU, Athersys expects to receive additional near-term payments totaling between $1.5 million and $3 million and may receive up to $150 million in potential development and sales milestones and additional royalties.

Net proceeds from the exercise of the Existing Warrants and the ARDS license with Healios will extend the Company’s liquidity to continue to explore strategic alternatives.

Athersys has engaged Outcome Capital (“Outcome”), a life sciences and healthcare advisory and strategic investment banking firm, to assist the Company with evaluating strategic alternatives, which could include, without limitation, exploring the potential for a possible merger, business combination, investment into the Company, or a purchase, license, or other acquisition of assets with the goal of maximizing shareholder value. This process may not result in any transaction and the Company does not intend to disclose additional details unless and until it has entered into a specific transaction. However, in the event Athersys is unable to enter into a strategic transaction or obtain adequate financing, it expects to have to file for protection under the bankruptcy laws to allow the Company to conduct an orderly wind down of operations.