Steakholder Foods wants to multiply its authorized share count 20,000 times over. Shareholders will vote on September 15 on a proposal to expand the company's authorized ordinary shares from 50 billion to one quadrillion — that is, a thousand trillion — a notice filed with the SEC on August 11 showed.
The scale of the request points to a problem that predates the vote. As of August 5, the company had about 12.2 billion ordinary shares outstanding against a 50 billion authorized cap — leaving apparent room. But total outstanding warrants, including two series issued in the July placement, represent about 72.8 billion ordinary shares, well beyond what the company is currently authorized to issue in full. The two new warrant series cannot be exercised at all until shareholders approve the share increase.
Those warrants came from a $3.5 million private placement that closed August 3. The company issued pre-funded warrants, Series E warrants, and Series F warrants to a single accredited investor, each series exercisable for up to 1,750,000 American depositary shares. Each ADS represents 12,000 ordinary shares. The pre-funded warrants carry an exercise price of $0.01 per ADS and are immediately exercisable. The Series E and F warrants have an exercise price of $2.00 per ADS but remain locked until the authorized share increase takes effect — which requires the September vote. Series E warrants expire 18 months after that date; Series F warrants expire five years out.
Shares closed at $3.60 on August 14, up 25% from a previous close of $2.88, after the company filed the special-meeting notice three days earlier. Dollar volume was about $164.1 million across roughly 377,800 trades. Short volume that session was about 4.8 million shares, representing 52.51% of reported volume.
If both the Series E and Series F warrants are exercised in full for cash, the filing says the company could receive up to $7.0 million in additional gross proceeds. If they are not exercised, the company says it may be unable to fulfill its obligations to the warrant holders and could face claims or be required to negotiate alternative arrangements. H.C. Wainwright & Co. acted as placement agent and received a cash fee equal to 7.5% of gross proceeds, according to the proxy statement.
The board is recommending a vote for both proposals at the September 15 meeting: the share-capital increase and the formal approval of the ADS issuance underlying the pre-funded warrants. Approval of each requires a simple majority of shares present and voting.