WallachBeth Capital Announces bioAffinity Technologies Warrant Inducement for Aggregate Gross Proceeds of $1.4 Million

Rhea-AI Summary

bioAffinity Technologies (NASDAQ: BIAF) has secured approximately $1.4 million in gross proceeds through warrant exercise agreements with three existing accredited investors. The investors will exercise warrants to purchase 2,438,473 common shares at a reduced price of $0.58 per share, down from the original $1.50.

As part of the agreement, investors will receive new unregistered warrants to purchase up to 2,926,168 shares (120% of exercised shares) at $0.85 per share. These new warrants will become exercisable upon stockholder approval and expire five years after approval. The transaction, managed by WallachBeth Capital as sole placement agent, is expected to close on February 26, 2025.

Positive

• Immediate cash injection of $1.4M strengthens balance sheet
• Warrant exercise price reduced by 61% to incentivize conversion
• New warrants provide potential for additional future funding

Negative

• Significant dilution from 2.4M new shares issued
• Additional potential dilution from 2.9M new warrants
• 61% reduction in warrant exercise price indicates weak negotiating position

Insights

Financial Analyst

bioAffinity Technologies' $1.4 million warrant inducement transaction represents a critical capital infusion for this small diagnostic company focused on early-stage cancer detection. With a market cap of just $12.7 million, this raise constitutes approximately 11% of the company's current valuation, providing essential working capital at a time when small biotech companies face challenging financing environments.

The structure of this transaction reveals important strategic considerations. By reducing the exercise price of existing warrants from $1.50 to $0.58 (a 61% discount to the original price and 25.6% below the current market price), BIAF has prioritized immediate capital access over potential future proceeds. This suggests management's assessment that near-term operational needs outweigh concerns about pricing optics.

The dilution impact warrants careful analysis. Based on BIAF's approximately 16.3 million outstanding shares, the immediate exercise adds 2.44 million shares, representing a 15% dilution. If the new warrants (2.93 million shares) are eventually exercised, this would result in additional 18% dilution, for a potential total dilution of 33%. This significant ownership restructuring signals management's willingness to accept substantial dilution to secure operational runway.

The requirement for stockholder approval for the new warrants introduces an element of uncertainty. While approval seems likely given the participation of existing investors, this condition creates a contingent aspect to the full transaction. The new warrant exercise price of $0.85 - set at a 9% premium to current trading - suggests a calculated optimism about future value appreciation.

For existing shareholders, this transaction presents a mixed signal - the company has secured vital capital but at terms that reflect financing constraints typical of micro-cap biotechs. For potential investors, the transaction provides transparency about near-term cash runway while highlighting the company's reliance on supportive existing investors willing to provide capital, albeit at favorable terms to themselves.

JERSEY CITY, N.J., Feb. 25, 2025 /PRNewswire/ -- WallachBeth Capital LLC, a leading provider of capital markets and institutional execution services, announced today that bioAffinity Technologies, Inc. (NASDAQ: BIAF and BIAFW) has entered into warrant exercise agreements with three existing accredited investors to exercise certain outstanding warrants to purchase an aggregate of 2,438,473 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 $1.4 million, the exercising holders will receive in a private placement new unregistered warrants (the "New Warrants") to purchase up to an aggregate of 2,926,168 shares of common stock (equal to 120% of the shares of common stock issued in connection with the exercise of the Existing Warrants) with an exercise price of $0.85 per share. The New Warrants 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 $1.50 to $0.58 per share. The exercise of the Existing Warrants and the issuance of the New Warrants are expected to occur on February 25, 2025.

The closing of the offering is expected to occur on or about February 26, 2025, subject to the satisfaction of customary closing conditions. The gross proceeds from the warrant inducement are expected to be approximately $1.4 million, excluding any proceeds that may be received upon the exercise of the  New 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 for the warrant inducement transaction.

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, supporting issuers and investors in achieving their financial goals. The firm's experience includes initial public offerings, follow-on issues, PIPE offerings, and private transactions and ATM's. 

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 the Company's ability to close the offering and 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 did bioAffinity Technologies (BIAF) raise through the warrant exercise agreement?

bioAffinity Technologies raised approximately $1.4 million in gross proceeds through warrant exercise agreements with three existing accredited investors.

What is the new exercise price for BIAF's existing warrants in February 2025?

The exercise price of the existing warrants was reduced from $1.50 to $0.58 per share.

How many new warrants will BIAF issue in the February 2025 agreement?

BIAF will issue new warrants to purchase up to 2,926,168 shares at $0.85 per share, representing 120% of the exercised shares.

When will BIAF's new warrants from the February 2025 agreement become exercisable?

The new warrants will become exercisable upon stockholder approval and will expire five years from the approval date.