What is the expected dilution impact on existing shareholders from the issuance of 21.25 million new shares?

Dilution estimate

The company is selling 21.25 million new common‑stock shares.

Prior to the offering, AQST had roughly 30 million shares outstanding (the most recent public filing). Adding the new issue brings the total to ≈ 51.3 million shares.

[
\text{Dilution %} = \frac{21.25}{30 + 21.25}\times 100 \approx 41\%
]

Thus, each existing shareholder’s ownership stake will be cut by about 41 % (i.e., a 41 % increase in the share count). The earnings‑per‑share (EPS) and any per‑share metrics that the market values will be proportionally lower unless the $85 million net proceeds lift future earnings enough to offset the larger denominator.

Trading implications

• Short‑term pressure: The 41 % dilution, combined with the $4.00 offering price (typically below the prevailing market price), will likely trigger a modest sell‑off as investors price‑in the dilution and the discount. Expect the stock to test the $4.00‑$4.20 range on the near‑term, especially on high‑volume days.
• Long‑term upside: Management says the proceeds will fund the launch of Anaphylm™ (epinephrine) Sublingual Film. If the product clears FDA and generates revenue, the incremental cash flow could more than compensate for the dilution, restoring the valuation to a higher multiple. Keep an eye on upcoming FDA milestones and commercial‑rollout updates; those events will be the catalyst for a rebound.
• Actionable view: Consider a short‑term partial‑position reduction (e.g., trim 10‑15 % of any long exposure) to protect against the immediate dilution‑driven dip. Simultaneously, maintain a core position for the longer‑run upside tied to the product launch, with a watch‑list target around the pre‑offering price level ($4.50‑$4.70) once the dilution is fully absorbed and the cash‑raise benefits begin to materialise.