What is the size of the underwriting discount and overall offering expenses, and how do they impact net proceeds to the company?
Short answer
- Gross proceeds: ≈ $12 million (the amount raised before any deductions).
- Underwriting discount & overall offering expenses: The press release excerpt you provided does not give the exact dollar‑or‑percentage figures for these items.
- Impact on net proceeds: Both the underwriting discount (the compensation the underwriters receive for selling the units) and the other offering expenses (legal, accounting, printing, filing, etc.) are subtracted from the $12 million gross amount, so the net cash that BioVie actually receives will be lower than $12 million. The precise net‑proceeds figure can only be calculated once the discount and expense amounts are disclosed.
Why the exact numbers aren’t available in the excerpt
The news summary cuts off after the sentence:
“The gross proceeds to the Company from this offering are expected to be approximately $12 million, before deducting underwriting discounts an …”
The phrase “before deducting underwriting discounts and” is the typical lead‑in to a sentence that would normally read something like:
“… before deducting underwriting discounts and commissions of X% (or $Y) and other estimated offering expenses of $Z, resulting in net proceeds of approximately $W.”
Since the continuation of the press release is not included, we cannot quote the exact discount rate, dollar amount, or total expense figure. Therefore, any answer must be based on what is explicitly stated: gross proceeds of $12 million and the acknowledgement that deductions will be taken.
What typically composes those deductions (for context)
| Item | Typical range (for a $12 M public offering) | How it affects net proceeds |
|---|---|---|
| Underwriting discount (or “discount & commission”) | 4 %–6 % of gross proceeds (≈ $480 k – $720 k) | Directly reduces cash received |
| Legal fees | $100 k–$250 k (often a flat fee) | Subtracted from gross proceeds |
| Accounting/audit fees | $50 k–$150 k | Subtracted |
| Filing & SEC registration fees | $100 k–$200 k (based on offering size) | Subtracted |
| Printing, marketing & road‑show costs | $50 k–$150 k | Subtracted |
| Miscellaneous expenses (e.g., transfer agent, listing fees) | $30 k–$80 k | Subtracted |
If BioVie’s underwriting discount were, for example, 5 % ($600 k) and total other offering expenses were $300 k, the net proceeds would be:
$12,000,000 (gross)
‑ $600,000 (underwriting discount)
‑ $300,000 (other expenses)
= $11,100,000 (net proceeds)
Again, those figures are illustrative only; the actual numbers will be disclosed in the full filing (Form S‑1 or S‑3) or in the complete press release.
How the deductions impact BioVie’s financing
- Liquidity: The net cash that BioVie can deploy for its clinical programs, working capital, and other corporate purposes will be the gross amount less the underwriting discount and expenses.
- Dilution: Because each unit consists of one share of common stock plus a warrant, the company will issue 6 million shares (plus warrants). The net‑proceed reduction does not affect the number of shares issued—it only reduces the cash per share the company actually receives.
- Cost of capital: The underwriting discount is effectively part of the cost of raising equity. A higher discount means a higher cost of capital for the company.
- Reporting: BioVie will report the net proceeds in its Form 8‑K and in the “Use of Proceeds” section of the registration statement, which investors can review to see the exact figures once the filing is public.
Bottom line
- Gross proceeds: ≈ $12 million.
- Exact underwriting discount and total offering expenses: Not disclosed in the excerpt you provided.
- Effect: Both are subtracted from the $12 million, so the net proceeds will be some amount below $12 million. The precise net‑proceeds number will be published in the full press release or accompanying SEC filing.
If you need the exact discount percentage, dollar amount, and resulting net‑proceeds figure, you can locate the complete press release on BioVie’s investor‑relations website or check the SEC filing (Form S‑1 or S‑3) that announced this public offering. Those documents will list the underwriting discount (often expressed as a percent of gross proceeds) and a tabular summary of all estimated offering expenses.