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Stealth BioTherapeutics Announces $8.5 Million in Equity Financings

Date : April 11, 2022

BOSTON, April 11, 2022 /PRNewswire/ -- Stealth BioTherapeutics Corp (Nasdaq: MITO) (the "Company"), a clinical-stage biotechnology company focused on the discovery, development and commercialization of novel therapies for diseases involving mitochondrial dysfunction, today announced that it has entered into a definitive agreement with a single healthcare-focused institutional investor to purchase in a registered direct offering 5,583,028 American Depositary Shares (the "Registered ADSs"), representing 66,996,336 ordinary shares of the Company, at a purchase price of $0.6269 per Registered ADS for gross proceeds of approximately $3.5 million, before deducting placement agent fees and other offering expenses payable by the Company. Each ADS represents 12 ordinary shares. In a concurrent private placement, the Company also agreed to issue to the purchaser of the Registered ADSs a warrant to purchase up to 44,217,588 ordinary shares of the Company, representing 3,684,799 American Depositary Shares. The warrant will have an exercise price of $0.6269 per American Depositary Share, will be exercisable six (6) months from that date of issuance, and will expire five years from the initial exercise date. The closing of these offerings is expected to take place on or about April 13, 2022, subject to the satisfaction of customary closing conditions.

A.G.P./Alliance Global Partners is acting as the sole placement agent for the registered direct offering and the concurrent private placement of the warrant.

Additionally, the Company entered into a definitive agreement with Morningside Venture (I) Investments Limited ("Morningside") for a $5.0 million private placement (the "Morningside Financing"). As part of the private placement, Morningside purchased 95,712,096 ordinary shares at a price of $0.05224 per ordinary share and a warrant to purchase up to 63,169,980 ordinary shares. The warrant will have an exercise price of $0.05224 per ordinary share, will be exercisable six (6) months from that date of issuance, and will expire five years from the initial exercise date. The closing of the Morningside Financing is expected to take place on or about April 13, 2022, subject to the satisfaction of customary closing conditions.

The Registered ADSs are being offered by the Company pursuant to a "shelf" registration statement on Form F-3 (File No. 333-237542) previously filed with the Securities and Exchange Commission ("SEC") and declared effective by the SEC on April 10, 2020. The offering of the ADSs will be made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and accompanying prospectus relating to the ADSs being offered will be filed with the SEC. Electronic copies of the final prospectus supplement and accompanying prospectus may be obtained, when available, on the SEC's website at http://www.sec.gov or by contacting A.G.P./Alliance Global Partners, 590 Madison Avenue, 28th Floor, New York, NY 10022, or by telephone at (212) 624-2060, or by email at prospectus@allianceg.com.

Each of the concurrent private placement of the warrant and the Morningside Financing is being made in the United States pursuant to the exemption from securities registration afforded by Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D as promulgated by the SEC. The securities to be sold in such private placements have not been registered under the Securities Act of 1933, as amended, or applicable state securities laws, and accordingly may not be offered or sold in the United States absent registration with the SEC or an applicable exemption from such registration requirements. The Company has agreed to file a registration statement with the SEC covering the resale of the American Depositary Shares representing the ordinary shares issuable upon exercise of the warrant issued in the concurrent private placement to the purchaser of Registered ADSs.

This press release does not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

About Stealth BioTherapeutics

We are a clinical-stage biotechnology company focused on the discovery, development, and commercialization of novel therapies for diseases involving mitochondrial dysfunction. Mitochondria, found in nearly every cell in the body, are the body's main source of energy production and are critical for normal organ function. Dysfunctional mitochondria characterize a number of rare genetic diseases and are involved in many common age-related diseases, typically involving organ systems with high energy demands such as the eye, the neuromuscular system, the heart and the brain.

Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such forward-looking include statements about the anticipated completion of the registered direct offering, the concurrent private placement and the Morningside Financing. Statements that are not historical facts, including statements about Stealth BioTherapeutics' beliefs, plans and expectations, are forward-looking statements. The words "anticipate," "expect," "hope," "plan," "potential," "possible," "will," "believe," "estimate," "intend," "may," "predict," "project," "would" and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Stealth BioTherapeutics may not actually achieve the plans, intentions or expectations disclosed in these forward-looking statements, and you should not place undue reliance on these forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements as a result of known and unknown risks, uncertainties and other important factors, including: market and other conditions, Stealth BioTherapeutics' ability to obtain additional funding and to continue as a going concern; the impact of the COVID-19 pandemic; the ability to successfully demonstrate the efficacy and safety of Stealth BioTherapeutics' product candidates and future product candidates; the preclinical and clinical results for Stealth BioTherapeutics' product candidates, which may not support further development and marketing approval; the potential advantages of Stealth BioTherapeutics' product candidates; the content and timing of decisions made by the U.S. FDA, the EMA or other regulatory authorities, investigational review boards at clinical trial sites and publication review bodies, which may affect the initiation, timing and progress of preclinical studies and clinical trials of Stealth BioTherapeutics product candidates; Stealth BioTherapeutics' ability to obtain and maintain requisite regulatory approvals and to enroll patients in its planned clinical trials; unplanned cash requirements and expenditures; competitive factors; Stealth BioTherapeutics' ability to obtain, maintain and enforce patent and other intellectual property protection for any product candidates it is developing; whether the conditions for the closing of the offerings will be satisfied; and general economic and market conditions. These and other risks are described in greater detail under the caption "Risk Factors" included in the Stealth BioTherapeutics' most recent Annual Report on Form 20-F filed with the SEC, as well as in any future filings with the SEC. Forward-looking statements represent management's current expectations and are inherently uncertain. Except as required by law, Stealth BioTherapeutics does not undertake any obligation to update forward-looking statements made by us to reflect subsequent events or circumstances.

Investor Relations
Stern Investor Relations
Janhavi Mohite, 212-362-1200
IR@StealthBT.com

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SOURCE Stealth BioTherapeutics Inc.

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