WallachBeth Capital Announces bioAffinity Technologies Pricing of Registered Direct Offering and Concurrent Private Placement and Warrant Inducement for Aggregate Gross Proceeds of $1.75 Million

Rhea-AI Summary

WallachBeth Capital announced that bioAffinity Technologies (NASDAQ: BIAF) has entered into warrant exercise agreements and a securities purchase agreement for aggregate gross proceeds of $1.75 million. The transactions include:

1. Exercise of existing warrants by three accredited investors for 1,041,667 shares at $1.25 per share, generating $1,302,083.

2. Issuance of new warrants to purchase 1,302,083 shares at $1.50 per share.

3. A registered direct offering of 360,000 shares and private placement of warrants to purchase 450,000 shares at a combined price of $1.25, generating $450,000.

The transactions are expected to close on August 5, 2024. WallachBeth Capital is acting as the sole placement agent and financial advisor for these transactions.

Positive

• Raised $1.75 million in gross proceeds through warrant exercises and share offerings
• Existing warrant holders exercised their warrants, indicating confidence in the company
• New warrants issued with a higher exercise price of $1.50, potentially generating additional future capital

Negative

• Dilution of existing shareholders due to issuance of new shares and warrants
• Reduction of existing warrant exercise price from $1.64 to $1.25, potentially indicating weak demand
• New share issuance at $1.25, which may be below current market price, suggesting unfavorable terms for the company

Financial Analyst

bioAffinity Technologies' latest financial maneuver is a complex blend of warrant exercises and new offerings that warrants careful scrutiny. The company is set to raise $1.75 million in gross proceeds through a combination of warrant exercises and a new share issuance, which could provide a much-needed cash infusion.

The warrant exercise agreement with existing investors is particularly noteworthy. By reducing the exercise price of existing warrants from $1.64 to $1.25 per share, the company has incentivized the immediate exercise of these warrants, securing $1,302,083 in cash. This strategy, while dilutive, provides immediate liquidity.

The concurrent registered direct offering and private placement of 360,000 shares at $1.25 per share, along with warrants for an additional 450,000 shares, is set to bring in an additional $450,000. However, the effectiveness of this capital raise is tempered by its relatively small size and the potential for further dilution if the new warrants are exercised.

Investors should note that the new warrants' exercise price of $1.50 represents a 20% premium to the current offering price, suggesting some optimism about future share price appreciation. However, the need for stockholder approval for these new warrants adds an element of uncertainty to the timeline and execution of this strategy.

While this financial engineering provides short-term capital, it also signals potential cash flow challenges. The company's reliance on equity-based financing rather than operational cash flow or debt financing may indicate underlying business concerns that investors should investigate further.

Market Research Analyst

bioAffinity Technologies' latest financial move reflects broader trends in the biotech sector, where small-cap companies often struggle to secure traditional financing. This $1.75 million raise, while modest, could be important for the company's near-term operations and research initiatives.

The market's reception to this news will likely be mixed. On one hand, the ability to secure funding, even through complex warrant arrangements, demonstrates some investor confidence. On the other, the need for such financing and the potential dilution could raise concerns about the company's financial health and growth prospects.

It's worth noting that the pricing of the new shares at $1.25 and the warrant exercise price of $1.50 provide insight into how the market currently values bioAffinity. These prices suggest a cautious outlook, with only modest expectations for near-term share price appreciation.

The involvement of WallachBeth Capital as the sole placement agent adds credibility to the transaction but also highlights the challenges bioAffinity faces in attracting larger, more established investment banks. This could limit the company's access to capital markets in the future.

Investors should closely monitor how bioAffinity utilizes this new capital. If it leads to significant progress in the company's product pipeline or market position, it could justify the dilution. However, if the funds are primarily used for general corporate purposes without clear value creation, it may signal deeper financial challenges.

JERSEY CITY, N.J., Aug. 2, 2024 /PRNewswire/ -- WallachBeth Capital LLC, a leading provider of capital markets and institutional execution services, announced today that bioAffinity Technologies, Inc. (NASDAQ: BIAF) (the "Company") has entered into warrant exercise agreements with three existing accredited investors to exercise certain outstanding warrants to purchase an aggregate of 1,041,667 of the Company's shares of common stock (the "Existing Warrants"). In consideration for the immediate exercise in full of the Existing Warrants for gross cash proceeds of approximately $1,302,083, the exercising holders received in a private placement new unregistered warrants (the "New Warrants") to purchase up to an aggregate of 1,302,083 shares of common stock (equal to 125% of the shares of common stock issued in connection with the exercise of the Existing Warrants) with an exercise price of $1.50 per share and are initially exercisable on the date that stockholder approval of the exercise of the New Warrants is obtained and will expire five years from the date of such approval. In connection with the exercise of the Existing Warrants, the Company agreed to reduce the exercise price of the Existing Warrants from $1.64 to $1.25 per share. The exercise of the Existing Warrants and the issuance of the New Warrants are expected to occur on August 5, 2024.

WallachBeth Capital LLC also announced today that the Company has entered into a securities purchase agreement with an institutional investor for the purchase and sale of 360,000 shares of common stock in a registered direct offering and, in a concurrent private placement, common warrants (the "Private Warrants") to purchase up to 450,000 shares of common stock (together with the registered direct offering) at a combined purchase price of $1.25. The Private Warrants will have an exercise price of $ 1.50 per share, are initially exercisable on the date that stockholder approval of the exercise of the warrants is obtained and will expire five years from the date of such approval.

The closing of the offering is expected to occur on or about August 5, 2024, subject to the satisfaction of customary closing conditions. The gross proceeds from the offering are expected to be approximately $450,000, excluding any proceeds that may be received upon the exercise of the Private Warrants and before deducting placement agent fees and other offering expenses payable by the Company.

WallachBeth Capital is acting as sole placement agent for the registered direct offering and private placement and financial advisor for the warrant inducement transaction.

The common stock will be issued in a registered direct offering pursuant to an effective shelf registration statement on Form S-3 (File No. 333-275608) previously filed with the U.S. Securities and Exchange Commission (SEC), under the Securities Act of 1933, as amended (the "Securities Act"), and declared effective by the SEC on Nov. 27, 2023. The Private Warrants to be issued in the concurrent private placement and the shares issuable upon exercise of such warrants were offered pursuant to an exemption from the registration requirements of the Securities Act of under Section 4(a)(2) thereof and Regulation D promulgated thereunder and have not been registered under the Securities Act or applicable state securities laws. A prospectus supplement describing the terms of the proposed registered direct offering will be filed with the SEC and available on the SEC's website located at http://www.sec.gov. Electronic copies of the prospectus supplements may be obtained, when available, from WallachBeth Capital, LLC, via email at cap-mkts@wallachbeth.com, by calling +1 (646) 237-8585, or by standard mail at WallachBeth Capital LLC, Attn: Capital Markets, 185 Hudson St., Suite 1410, Jersey City, NJ 07311, USA.

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

About WallachBeth Capital LLC:

WallachBeth Capital offers a robust range of capital markets and investment banking services to the healthcare community, connecting corporate clients with leading institutions. The firm's experience includes initial public offerings, follow-on issues, PIPE offerings, and private transactions.

Forward-Looking Statements

This press release contains forward-looking statements, including statements regarding the anticipated exercise of warrants, the anticipated gross proceeds from the Company's offering of securities and the expected closing of the offering. Forward-looking statements can be identified by words such as "believes," "expects," "estimates," "intends," "may," "plans," "will" and similar expressions, or the negative of these words. Such forward-looking statements are based on facts and conditions as they exist at the time such statements are made and predictions as to future facts and conditions. Readers of this press release are cautioned not to place undue reliance on any forward-looking statements. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of the Company's control. Many factors could cause actual future events to differ materially from the forward-looking statements in this press release, including but not limited to risks and uncertainties included under the heading "Risk Factors" in the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and other reports filed with the SEC from time to time. The Company does not undertake any obligation to update any forward-looking statement relating to matters discussed in this press release, except as may be required by applicable securities laws.

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SOURCE WallachBeth Capital LLC

FAQ

How much capital did bioAffinity Technologies (BIAF) raise in the recent offering?

bioAffinity Technologies (BIAF) raised aggregate gross proceeds of $1.75 million through warrant exercises, a registered direct offering, and a private placement of warrants.

What is the exercise price of the new warrants issued by bioAffinity Technologies (BIAF)?

The new warrants issued by bioAffinity Technologies (BIAF) have an exercise price of $1.50 per share.

When is the expected closing date for bioAffinity Technologies' (BIAF) recent offerings?

The closing of bioAffinity Technologies' (BIAF) recent offerings is expected to occur on or about August 5, 2024, subject to customary closing conditions.

Who is acting as the placement agent for bioAffinity Technologies' (BIAF) offerings?

WallachBeth Capital is acting as the sole placement agent for the registered direct offering and private placement, and as the financial advisor for the warrant inducement transaction for bioAffinity Technologies (BIAF).