Shares of Avenue Therapeutics (NASDAQ: ATXI) plunged in morning trading on Wednesday after the specialty pharmaceutical company stated in an SEC filing that it was offering up to 1.8 million units consisting of one share of common stock and one warrant to purchase shares of common stock as a part of its public offering.
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In addition, the company stated that it was offering buyers owning more than approximately 5% of its outstanding shares following this public offering to purchase pre-funded units.
These pre-funded units would be “in lieu of units that would otherwise result in such purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstanding shares of common stock.”
The pre-funded units would be up to 1.8 million units consisting of one pre-funded warrant to buy its common stock and one warrant to purchase its common stock.
The company has priced these pre-funded units as “equal to the price per unit being sold to the public in this offering, minus $0.0001, and the exercise price of each pre-funded warrant included in the pre-funded units will be $0.0001 per share.”
Avenue had announced a 1-for-15 reverse stock split late last month.
