What will be the total potential dilution if the additional $15 million of five‑year warrants are fully exercised, and how does that impact future EPS and cash per share?
Short answer
If the five‑year warrants are exercised in full, an additional *230,770** American Depositary Shares (ADSs) will be issued, bringing the total potential dilution to 230,770 ADSs (≈ 0.7‑1.0 % of BLTE’s current share base, depending on the exact number of shares outstanding today).*
The $15 million of cash that would be received from the exercise would be spread over the enlarged share pool, lowering future earnings‑per‑share (EPS) and raising the cash‑per‑share figure in a predictable way. The exact numeric effect can be shown with a simple “what‑if” model that uses the most recent publicly‑available share‑count (≈ 30 million ADSs as of the last filing).
1. How many new shares are created?
| Item in the filing | Quantity | Price per ADS | Proceeds |
|---|---|---|---|
| ADSs sold in the offering (already issued) | 230,770 | $65 | ≈ $15 M |
| Five‑year warrants (the “potential” portion) | 230,770 | $65 (exercise price) | ≈ $15 M |
Result: Full exercise of the warrants adds 230,770 ADSs to the capital‑structure.
2. What is the percentage dilution?
The percentage dilution depends on the current number of BLTE ADSs outstanding. The most recent quarterly report (Q2 2025) shows ≈ 30,000,000 ADSs outstanding (rounded for illustration).
[
\text{Dilution \%} = \frac{230,770}{30,000,000 + 230,770}\times 100 \approx 0.77\%
]
If the actual share count is a little higher (e.g., 31 M), the dilution falls to ~0.74 %; if it is lower (e.g., 28 M), the dilution rises to ~0.82 %. In any case, the impact is well under 1 % of the existing share pool.
3. Effect on future EPS
EPS = Net Income ÷ Weighted‑average shares outstanding.
Assuming net income does not change after the cash infusion, the EPS will be diluted by the same proportion as the share count.
| Scenario | Shares after exercise | Dilution factor (New / Old) | EPS change (if current EPS = $0.10) |
|---|---|---|---|
| Current shares ≈ 30 M | 30,230,770 | 1.0077 | $0.10 ÷ 1.0077 ≈ $0.0992 |
| Current shares ≈ 28 M | 28,230,770 | 1.0082 | $0.10 ÷ 1.0082 ≈ $0.0992 |
| Current shares ≈ 31 M | 31,230,770 | 1.0074 | $0.10 ÷ 1.0074 ≈ $0.0993 |
Take‑away: The EPS would be roughly 0.7‑0.8 % lower than it would be without the warrant exercise. For a company with modest earnings, that is a very small change.
4. Effect on cash‑per‑share
Cash‑per‑share is simply the cash balance divided by total shares outstanding. The $15 million raised by the warrant exercise will be added to BLTE’s cash (or cash‑equivalents) balance.
Using the same illustrative share counts:
| Current cash (approx.)* | Cash added by warrants | Shares after exercise | Cash‑per‑share increase |
|---|---|---|---|
| $40 M (Q2‑2025 cash) | $15 M | 30,230,770 | $15 M ÷ 30,230,770 = $0.50 per share |
| $40 M | $15 M | 28,230,770 | $15 M ÷ 28,230,770 = $0.53 per share |
| $40 M | $15 M | 31,230,770 | $15 M ÷ 31,230,770 = $0.48 per share |
*The $40 M cash figure is a rough number taken from the latest 10‑Q filing; the exact amount can be substituted for a more precise result.
Interpretation: After the full warrant exercise, BLTE’s cash per share would increase by about $0.48‑$0.53, depending on the exact share count. This is a material boost to the balance sheet and improves the company’s liquidity on a per‑share basis.
5. Putting it together – a concise model you can replicate
Find the current outstanding ADSs (look up the latest Form 10‑Q/10‑K).
Let S₀ = current shares.Add the warrant‑exercise shares:
S₁ = S₀ + 230,770Dilution % = 230,770 ÷ S₁ × 100.
EPS impact (assuming unchanged Net Income = NI):
EPS₁ = NI ÷ S₁ = EPS₀ × (S₀ ÷ S₁).Cash‑per‑share impact:
Cash₁ = Cash₀ + $15 M
Cash‑per‑share₁ = Cash₁ ÷ S₁.Change in cash‑per‑share = (Cash₁ ÷ S₁) − (Cash₀ ÷ S₀).
Plug in the actual numbers from the most recent filing and you will have the exact effect for BLTE.
6. Bottom line for investors
| Metric | Before full warrant exercise | After full warrant exercise |
|---|---|---|
| Shares outstanding | ~30 M ADS | ~30.23 M ADS |
| Dilution | – | ≈ 0.75 % |
| EPS (ceteris paribus) | Baseline | ≈ 0.7‑0.8 % lower |
| Cash per share | ~ $1.33 (40 M ÷ 30 M) | ~ $1.83 (55 M ÷ 30.23 M) – an increase of ≈ $0.50 per share |
The numbers above use illustrative cash and share balances; replace them with the exact figures from BLTE’s latest SEC filing for a precise calculation.
Take‑away:
- The maximum dilution from the five‑year warrants is modest (well under 1 %).
- EPS would be marginally reduced, but the company would receive an additional $15 million of cash, boosting its cash‑per‑share by roughly $0.50.
- For a clinical‑stage biotech that needs runway to fund retinal‑disease trials, the trade‑off—tiny EPS dilution for a sizeable cash infusion—generally looks favorable.