Atossa Genetics Inc. (NASDAQ: ATOS) is seeking to boost its capital base and the company has announced a secondary public offering of its common stock. The equity fundraiser will adversely impact the value of existing shareholders. However, it provides a low-cost channel for Atossa to raise the additional capital that it needs without burdening its balance sheet with debt.
What’s on offer?
Atossa Genetics Inc. (NASDAQ: ATOS) is selling 1.15 million shares of its common stock at a price of $2.50 apiece. That should generate $2.875 million in gross proceeds for the company before it takes out expenses and commissions related to the offering.
However, the gross proceeds from the offering could be higher considering that Atossa has granted the underwriters to purchase additional shares to cover overallotment. Underwriters can purchase up to 172,500 shares of Atossa within 45 days to cover oversubscription.
When is the closing
Atossa wants to finish the business of offering new shares to be public on September 6. However, the date is tentative because it is subject to customary closing conditions.
Atossa Genetics Inc (NASDAQ: ATOS) has tapped Aegis Capital Corp as the sole book-running manager for its secondary public offering.
What are the funds for?
Atossa didn’t clearly state what need it has for the funds it is seeking to raise through equity offering. However, there is no doubt that the management feels the need to shore up the company’s liquidity position considering that it closed 2Q2016 with cash balance of just $1.19 million. Cash balance at the end of the prior quarter was $2.88 million.
Compensation from Besins Healthcare
Atossa’s fundraiser comes on the heels of a litigation settlement between the company and an entity called Besins Healthcare Luxembourg. As part of the deal, Atossa relinquished rights to AfTG Program and in exchange, Besins agreed to compensate it a little over $1.76 million to cover expenses that Atossa may have incurred in working on AfTG Program.
How Atossa Genetics Inc. (NASDAQ: ATOS) fared in 2Q
Atossa Genetics Inc. (NASDAQ: ATOS) logged EPS loss of $0.05, missing the consensus estimate of a breakeven EPS.