Effector Therapeutics, Inc. (EFTR) has disclosed a new risk, in the Share Price & Shareholder Rights category.
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Effector Therapeutics, Inc. faces a significant business risk due to the limitations imposed by the Lincoln Park Purchase Agreement on its common stock issuance. The agreement stipulates an Exchange Cap that restricts the company from exceeding an issuance of 325,357 shares, which constitutes approximately 19.99% of the pre-agreement outstanding stock, adjusted post-reverse stock split. As of the end of 2023, with 29,221 shares already issued under the agreement, the cap on available shares for future issuance has diminished to 296,136. This constraint may hinder Effector Therapeutics’ ability to fully capitalize on the $50.0 million offering, potentially necessitating alternative funding avenues that could adversely impact the firm’s liquidity and financial stability.
Overall, Wall Street has a Strong Buy consensus rating on EFTR stock based on 3 Buys.
To learn more about Effector Therapeutics, Inc.’s risk factors, click here.