What are the terms and conditions of the pre‑funded warrants, and how might they impact future share count and liquidity?

Terms & Conditions of the Pre‑Funded Warrants

The offering gives the investor the right to receive up to 60 million shares of NXTT either as “ordinary” common stock or as pre‑funded warrants that are functionally equivalent to shares. The warrant purchase price is set at the same $0.15 per‑share price paid for common stock minus an exercise price of $0.001 per share. In practice, the investor pays $0.149 per warrant; when the warrant is exercised, an additional $0.001 cash is required per share to convert the warrant into ordinary stock. The warrants are therefore “pre‑funded” – the bulk of the purchase price is paid up‑front, and the tiny exercise amount is a procedural hurdle that prevents the investor from receiving the shares outright at the time of the offering. The agreement does not disclose any lock‑up, anti‑dilution or early‑exercise restrictions, but typical market practice for such instruments includes a 30‑ to 90‑day lock‑up on the warrants and a “full‑rate” anti‑dilution clause that adjusts the exercise price if the company issues additional securities at a lower price.

Impact on Future Share Count & Liquidity

If the warrants remain unexercised, the company’s basic share count stays at the current level, preserving existing ownership percentages and avoiding immediate dilution. However, the warrants represent a potential increase of up to 60 million shares (the “diluted” share base) once the $0.001 exercise is satisfied. Because the exercise price is essentially negligible, the warrants are expected to be converted relatively quickly—especially if the market price stays above the $0.15 issuance price—adding a sizable block of shares to the float. This influx will expand the free‑float and improve liquidity, which can narrow bid‑ask spreads and support higher trading volumes. Conversely, the sudden addition of 60 M shares could put downward pressure on the stock price if the market cannot absorb the extra supply, and it will dilute earnings per share on a diluted‑EPS basis. Traders should watch for any filing‑based lock‑up expirations or company announcements that might trigger mass exercise, and factor the diluted share count into valuation models (e.g., price‑to‑sales, EV/EBITDA) and risk‑adjusted position sizing.