8-K: Celularity Inc. Secures Convertible Note Financing

Celularity Inc. announces a $25 million senior secured convertible promissory note financing, alongside warrants, and a settlement agreement with Helena Global.

Summary

• Celularity Inc. has entered into a Securities Purchase Agreement to issue up to $25 million in senior secured convertible promissory notes and warrants.
• An initial closing on September 24, 2026, resulted in the issuance of approximately $11.01 million in notes and warrants for approximately 4,037,000 shares.
• The notes bear interest at 10% per annum, compounding annually, with a maturity of 24 months from their issue date.
• Upon an event of default, the interest rate increases to 15% per annum.
• The notes are convertible into Class A Common Stock at varying prices ($1.50, $1.60, or $2.00) depending on the tranche and closing period.
• Warrants are also issued, with exercise prices matching the conversion prices, and are exercisable for five years.
• A settlement agreement with Helena Global Investment Opportunities 1 Ltd. was reached on September 18, 2026, resolving disputes and involving the issuance of shares.
• The company has agreed to become current in its Exchange Act reporting obligations by October 20, 2026.

Sentiment

Score: 4

Explanation: StockSavvy.ai views this as a neutral to slightly negative development, as it involves significant debt financing with potentially dilutive conversion features and warrants, alongside a settlement that resolves disputes but involves share issuance.

Positives

• Secured significant financing through convertible notes and warrants, potentially up to $25 million.
• Initial closing successfully raised approximately $11.01 million in gross proceeds.
• The settlement with Helena Global resolves outstanding obligations and disputes, providing a path forward.
• The company has a clear path to become current in its Exchange Act reporting by October 20, 2026.

Negatives

• The convertible notes and warrants represent future potential dilution for existing shareholders.
• The conversion prices and warrant exercise prices are subject to adjustments, including potential reductions if stockholder approval is not obtained by December 19, 2026.
• The Helena settlement involved the issuance of 2,000,000 shares of common stock, with potential for more shares depending on performance conditions.
• The company is subject to various covenants and restrictions under the new financing agreements.

Risks

• Potential for significant future dilution to existing shareholders due to the conversion of notes and exercise of warrants.
• The company's ability to meet its Exchange Act reporting obligations by the October 20, 2026 deadline is critical.
• Failure to obtain required stockholder approval by December 19, 2026, will result in a 10% reduction in conversion and exercise prices, increasing potential dilution.
• The Helena settlement's make-whole provision could lead to further share issuance if performance conditions are not met.
• The notes are senior secured convertible promissory notes, indicating a level of financial distress or need for capital.

Future Outlook

The company plans to issue up to $25 million in convertible notes and warrants, with potential for additional closings. The company is also focused on becoming current in its Exchange Act reporting by October 20, 2026, and has agreed to seek stockholder approval for issuances related to Nasdaq rules.

Management Comments

• The Company has agreed to become current in its reporting obligations under the Exchange Act, by October 20, 2026.
• If the Company satisfies the performance conditions specified in the settlement agreement, on November 16, 2026 Helena will return the portion of the 2,000,000 additional shares that it is not entitled to retain under a share-based make-whole provision tied to the closing price of the Common Stock on that date.

Industry Context

StockSavvy.ai notes that convertible note financings are common for companies seeking capital, especially those in development stages or facing financial pressures. The inclusion of warrants and the potential for price adjustments upon failure to secure stockholder approval are standard features designed to incentivize investors while also creating potential dilution risks for existing shareholders. The settlement with Helena Global indicates a resolution of past financial disputes, which can be a positive step for operational stability.

Comparison to Industry Standards

• The interest rate of 10% on the notes is within the typical range for secured convertible debt, though the 15% default rate is higher, reflecting increased risk.
• The conversion price of $1.50 and warrant exercise price of $1.50 for the initial tranche are common for such offerings, aiming to align investor returns with potential stock appreciation.
• The anti-dilution provisions and minimum conversion/exercise prices ($1.25) are standard mechanisms to protect investors from significant dilution in the event of future equity issuances at lower prices.
• The requirement for stockholder approval under Nasdaq Listing Rule 5635 is a standard compliance measure for significant share issuances on major exchanges.

Management Changes

Corporate Governance

Legal Proceedings

• Settlement, Release and Termination Agreement with Helena Global Investment Opportunities 1 Ltd. to resolve outstanding obligations and disputes.
• The Helena settlement involved the conversion of debt, issuance of shares, and waiver of certain claims and installment payments.

Related Party Transactions

• The financing involves the Philip & Daniele Barach Family Trust, which has an amended and restated note and warrant, and Philip A. Barach was appointed to the Board.
• The Helena Global settlement involved the assignment to Celularity Inc. of a promissory note issued by NEXGEL, Inc. to Helena.

Stakeholder Impact

• Shareholders: Potential for significant dilution due to convertible notes and warrants; potential for share price impact based on financing success and future performance.
• Creditors: The new notes are senior secured, potentially impacting the priority of other creditors.
• Board of Directors: Composition changed with the appointment of Philip A. Barach, representing financing interests.
• Helena Global: Resolved disputes and received shares as settlement, with potential for further share retention based on performance.

Next Steps

• Celularity Inc. must become current in its Exchange Act reporting obligations by October 20, 2026.
• The company needs to seek stockholder approval for issuances related to Nasdaq Listing Rule 5635 by December 19, 2026.
• Potential for additional closings under the Securities Purchase Agreement.
• Helena Global will assess share retention on November 16, 2026, based on stock price performance.
• The company may need to file an initial resale registration statement within 45 days of September 23, 2026.

Key Dates

Recommendation

The financing provides necessary capital but comes with significant potential dilution and covenants. The settlement resolves past issues but also involves share issuance. The company's ability to execute on its reporting obligations and manage future dilution will be key. A 'hold' recommendation reflects the mixed nature of the news, balancing the capital infusion against the inherent risks and dilution.

Keywords

convertible notes, warrants, financing, securities purchase agreement, settlement agreement, Helena Global, Celularity Inc., Nasdaq