Soligenix (NASDAQ: SNGX) stock skyrocketed during intraday trading Tuesday after the company announced it would receive $4.2 million in new funding through a warrant inducement agreement.
Soligenix, a biopharmaceutical company, has announced a strategic agreement that could provide up to about $4.2 million in funding. The deal involves the exercise of existing warrants for cash and additional warrants issuance to participating holders.
Agreement Details
On Monday, Soligenix inked a warrant inducement agreement with certain holders of its existing warrants. These holders have committed to exercising warrants to purchase up to 703,125 shares of the company’s common stock at $6.00 per share. This exercise could generate approximately $4.2 million in gross proceeds, excluding financial advisory fees and other associated costs.
In exchange for their commitment, Soligenix will issue new unregistered warrants to the holders. These new warrants will allow the purchase of additional shares equal to 150% of the shares acquired through the exercise of the existing warrants. These new warrants are immediately exercisable and valid for five years.
In addition, Soligenix has pledged to file a registration statement by July 25, 2024, to facilitate the resale of the new warrant shares. This statement will remain effective until investors exercise or sell all new warrants and shares.
The company plans to use the net proceeds from this transaction to support the clinical development of its product candidates, fund working capital, and cover other general corporate purposes.
Soligenix has engaged A.G.P./Alliance Global Partners (NYSE: GLP) to provide financial advisory services for this transaction. As part of the agreement, A.G.P. will receive an advisory fee equivalent to 6.0% of the gross proceeds from exercising the existing warrants, and reimbursement of up to $40,000 for legal expenses.
It is important to note that this transaction involves the sale of securities not registered under the Securities Act of 1933, relying on exemptions from registration requirements. This implies that selling these securities in the United States requires either registration or an applicable exemption.
Soligenix (NASDAQ: SNGX) Stock Reaction
SNGX stock soared 271% on Tuesday, closing at $7.42, marking a 200.40% increase for the week. The trading volume was 134,220,864 shares, significantly higher than the average daily volume of 2.38 million.
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