Celularity has entered into a financing arrangement that could provide up to $25 million in new capital through senior secured convertible notes and warrants, with more than $10 million raised in the initial closing. The transaction, disclosed in a September 28 filing with the U.S. Securities and Exchange Commission, also restructures approximately $3 million of existing indebtedness and could result in substantial additional shares being issued if the notes are converted and warrants exercised.
The initial financing generated more than $10 million in gross cash proceeds before transaction expenses and repayment of existing debt. The broader arrangement consists of multiple potential closings, meaning the full $25 million in new capital has not yet been received and additional funding remains subject to investor elections and other conditions under the definitive agreements.
The notes issued in the initial closing carry a 10% annual interest rate, compounded annually, and mature 24 months after their respective issuance dates. The initial notes are convertible into Celularity’s Class A common stock at $1.50 per share. Investors also received five-year warrants initially exercisable at $1.50 per share, with warrant coverage equal to 11 shares for every 20 shares initially issuable upon conversion of the notes.
The financing agreement provides for additional notes through a second tranche. Under the arrangement, the first tranche can provide up to $15 million of convertible notes, while a second tranche allows for another $10 million. Notes in subsequent closings may have conversion and warrant exercise prices that differ from the initial $1.50 level, depending on the applicable closing and investor election provisions.
The potential equity issuance is significant because conversion of the notes and exercise of the warrants would increase Celularity’s outstanding share count. The company said the securities remain subject to applicable ownership limitations and Nasdaq stockholder approval requirements. Conversion and exercise prices are also subject to adjustment provisions contained in the financing documents.
A Form 4 filing by investor Philip A. Barach provides additional detail on the initial financing. Barach purchased $3.21 million of the September 2026 Notes and received warrants associated with those notes. He also received contractual options to purchase up to approximately $2.92 million of additional September 2027 Notes and corresponding warrants through September 30, 2027.
The financing is part of a broader recapitalization announced by Celularity on September 24. The company said the plan combines up to $25 million of new cash investment with the restructuring of approximately $3 million in existing debt. Celularity also said its monthly cash burn had been reduced by more than $1 million following personnel and spending reductions.
Celularity said it intends to use the financing to support commercial execution and manufacturing expansion. The company operates a purpose-built facility in Florham Park, New Jersey, and develops and manufactures cellular therapies and related products derived from the placenta. Its portfolio includes cenplacel-L, an investigational placenta-derived allogeneic cell therapy.
The company said it holds cenplacel-L inventory that management estimates has approximately $40 million of potential sales value, although realizing that value depends on applicable regulatory requirements, commercial relationships, demand and other conditions. Celularity has also been pursuing manufacturing partnerships, including a relationship with MuseCell Innovations covering U.S. manufacturing of the Dezawa MuseCell platform and related products.
Celularity expects the financing and operating changes to support its efforts to increase manufacturing revenue and commercial activity. Management has said it expects to achieve positive monthly operating cash flow by the end of the first quarter of 2027, but that target is a forward-looking expectation rather than a reported financial result.
The financing also includes changes to Celularity’s board structure. Barach is set to join the board alongside Chairman and Chief Executive Officer Robert J. Hariri and director Peter H. Diamandis, with two additional directors expected to be announced later. The appointments remain subject to applicable requirements, including the completion of the Rule 14f-1 information statement process.
The securities issued in the private placement have not been registered under the Securities Act. Celularity said additional closings are not guaranteed, while the potential conversion of notes and exercise of warrants could materially increase the company’s equity outstanding. The September 28 SEC filing formally documents the financing arrangements and associated obligations following the initial closing.
