Annovis Bio priced a public offering expected to raise about $21 million before fees, selling common stock or pre-funded warrants along with warrants to buy additional shares. The company plans to use the proceeds to advance its lead drug candidate, buntanetap, in Alzheimer’s and Parkinson’s disease studies, and for working capital and other corporate needs.
The offering is expected to close around November 6, subject to customary conditions. A company director is buying $5 million of the offering on the same terms as other investors.
Key details
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What is being sold: The offering covers 19 million shares of common stock, with pre-funded warrants available instead of shares for certain investors to purchase up to 2 million shares. Each share or pre-funded warrant package comes with a warrant to buy one additional share, for warrants covering up to 21 million shares in total.
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Pricing: A share bundled with its warrant costs $1. A pre-funded warrant bundled with its warrant costs $0.9999; the pre-funded warrant has an exercise price of $0.0001 per share.
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Terms of the additional warrants: Each accompanying warrant is exercisable immediately at $1 per share and expires five years after issuance. If all 21 million accompanying warrants are exercised, they would bring in up to $21 million more, although exercise is not guaranteed.
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Potential dilution: The offering will add shares to Annovis’s outstanding stock, either at closing or when pre-funded warrants are exercised. Exercise of the accompanying warrants could add further shares. The disclosure does not provide a percentage dilution estimate.
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Director participation: One director is purchasing 5 million shares and accompanying warrants for $5 million, at the same per-share package price as other investors.
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Use of proceeds: Annovis expects to direct net proceeds to clinical development of buntanetap in Alzheimer’s and Parkinson’s disease, as well as working capital and general corporate purposes.
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Ownership limits on warrant exercises: Warrant holders generally cannot exercise if doing so would push their ownership above 4.99% of Annovis’s common stock, or 9.99% if they elect that limit. Holders may seek a higher limit, subject to a 61-day waiting period and a maximum stated in the warrant terms.
Plain-English implications
The financing brings in capital now in exchange for newly issued shares and rights to buy more shares later. The warrants give Annovis a potential additional source of cash if exercised, while creating the possibility of further dilution.