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Investing.com -- BriaCell Therapeutics Corp (NASDAQ:BCTX) stock plunged 22% following the announcement of a public offering that could significantly dilute existing shareholders.
The clinical-stage biotechnology company revealed plans to offer up to 6,825,938 common units on a best efforts basis. Each unit, priced at $2.93, consists of one common share and one warrant to purchase an additional common share at an exercise price of $5.25, with the warrants set to expire on April 28, 2030.
BriaCell is also offering pre-funded units as an alternative for purchasers whose acquisition would result in them owning more than 4.99% (or optionally 9.99%) of the company’s outstanding shares. These pre-funded units include a pre-funded warrant exercisable at $0.001 per share and one regular warrant, with the purchase price being $0.001 less than the common unit price.
The significant stock decline reflects investor concerns about potential share dilution. While the offering will provide capital for the company’s operations, the issuance of new shares and potential future exercise of warrants could substantially increase the number of outstanding shares.
The components of both the common units and pre-funded units will be immediately separable upon issuance and will trade separately. The offering comes as BriaCell continues development of its immunotherapy candidates for cancer treatment.
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