Carmell Therapeutics selling Axolotl Biologix subsidiary

Carmell executed a definitive agreement to sell its wholly owned subsidiary, Axolotl Biologix, to the initial sellers of AxoBio for 3,845,337 shares of Carmell common stock, 4,243 shares of Carmell preferred stock and notes payable to the initial sellers in the aggregate amount of $8M. In August 2023, Carmell acquired AxoBio for $65M, which consisted of unsecured promissory notes in the aggregate amount of $8M and $57M in CTCX common and preferred stock – 8.09 million fully diluted shares at $7.05 per share – issued by Carmell to the initial sellers. AxoBio’s product portfolio consists of a commercial-stage amnion graft for use in clinics, a pre-commercial stage hospital use product, and pre-clinical and clinical stage products under development. Following the sale of AxoBio, Carmell’s financial position is expected to improve as follows: $4M drop in annualized cash burn net of revenue based on AxoBio’s actual January 2024 financials: $15.6M reduction in debt: $7.6M of AxoBio subsidiary level debt plus $8M note payable related to the AxoBio acquisition; $7M increase in tangible equity due to elimination of AxoBio’s negative tangible equity; 29% reduction in EPS dilution due to the return of 8.09 million CTCX common shares on a fully diluted basis. After closing, Carmell will have 19.25 million common shares outstanding.