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

Rhea-AI Summary

bioAffinity Technologies (NASDAQ: BIAF) has completed a warrant inducement transaction, raising $1.4 million in gross proceeds. The deal involved four existing accredited investors exercising warrants to purchase 2,438,473 shares of common stock. The company reduced the exercise price of existing warrants from $1.50 to $0.58 per share.

As part of the agreement, investors received new unregistered warrants to purchase up to 2,926,166 shares (120% of exercised shares) with an exercise price of $0.85 per share. These new warrants will become exercisable upon stockholder approval and expire five years after approval. WallachBeth Capital served as the sole placement agent for the transaction.

Positive

• Immediate cash injection of $1.4M strengthens balance sheet
• Potential for additional future capital through new warrant exercises

Negative

• Significant dilution with 2.44M new shares issued
• Additional potential dilution of 2.93M shares from new warrants
• 66% reduction in existing warrant exercise price from $1.50 to $0.58

Insights

Financial Analyst

bioAffinity Technologies (BIAF) has secured $1.4 million in immediate capital through a strategic warrant inducement transaction with existing investors, representing a significant 11.5% of the company's $12.2 million market capitalization.

The structure of this financing reveals important insights about BIAF's current position. The company reduced the exercise price of existing warrants by 61% (from $1.50 to $0.58) to incentivize immediate exercise, suggesting urgent capital needs. In exchange, investors received new warrants for 2.93 million additional shares at $0.85 per share - a 30.8% premium to the current share price.

This transaction creates an immediate dilution of approximately 13% to existing shareholders, with potential for additional 15.6% dilution if the new warrants are fully exercised after stockholder approval. The requirement for shareholder approval on the new warrants indicates governance constraints, likely related to Nasdaq listing requirements limiting non-preemptive share issuances.

For microcap biotech companies like BIAF, this type of creative financing often represents a balancing act between securing necessary operating capital and minimizing dilution at depressed share prices. The $1.4 million infusion likely extends the company's operational runway while it pursues development milestones that could potentially drive value creation.

The premium pricing on the new warrants suggests investors maintain some optimism about BIAF's future prospects, despite the company's apparent near-term capital constraints. However, the significant discount required to induce immediate warrant exercise indicates investors held considerable leverage in negotiations.

JERSEY CITY, N.J., Feb. 26, 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) announced today it has closed its previously announced warrant exercise agreements with four 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 2,926,166 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 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 comprehensive 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 in the February 2025 warrant inducement?

bioAffinity Technologies raised $1.4 million in gross proceeds through the warrant inducement transaction.

What is the exercise price of BIAF's new warrants issued in February 2025?

The new warrants have an exercise price of $0.85 per share.

How many new warrants did BIAF issue in the February 2025 transaction?

BIAF issued new warrants to purchase 2,926,166 shares, representing 120% of the exercised shares.

What was the reduced exercise price of BIAF's existing warrants in the February 2025 transaction?

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