Alligator Bioscience's TO 13 Warrant Exercise and Implications for Shareholder Value

Alligator Bioscience AB (publ) is navigating a pivotal period as its TO 13 warrants approach their exercise deadline, with significant implications for liquidity, equity structure, and investor timing. The company's recent renegotiation of its Fenja Capital loan and the subscription intentions of board members add layers of complexity to its capital strategy, creating both opportunities and risks for shareholders.

Warrant Mechanics and Liquidity Potential

The TO 13 warrants, exercisable at SEK 3.12 per ordinary share, represent a potential SEK 30.6 million inflow for Alligator Bioscience if fully exercisedExercise Price Determined for the Exercise of Warrants Series TO 13 in Alligator Bioscience AB^[2]. Each warrant grants the right to subscribe for 0.001 shares, meaning 1,000 warrants are required to acquire one new share. With 9.8 billion warrants outstanding, the exercise period—from 1 September to 15 September 2025—provides a narrow window for investors to actAlligator Bioscience announces that 85% of the warrant programme TO 12 has been secured and that the outstanding loan has been renegotiated^[3]. The last trading day for these warrants is 11 September 2025Alligator Bioscience announces that 85% of the warrant programme TO 12 has been secured and that the outstanding loan has been renegotiated^[3], underscoring the urgency for those seeking to capitalize on the opportunity.

This liquidity infusion could bolster Alligator's balance sheet, particularly as the company faces near-term obligations. However, the potential dilution of existing shareholders—approximately 30.6 million new shares if all warrants are exercised—must be weighed against the benefits of additional capital.

Fenja Capital Loan Renegotiation: A Double-Edged Sword

The renegotiation of Alligator's loan with Fenja Capital, finalized in May 2025, has reshaped the company's financial obligations. Key terms include:
- Waiver of the 50% amortization condition: Previously, 50% of proceeds from warrant exercises were earmarked for loan repayment. This restriction has been lifted, freeing up capital for operational useAlligator Bioscience has renegotiated the outstanding loan from Fenja Capital and received subscription intentions from members of the board of directors and management^[1].
- Extended maturity: The loan's due date was pushed from 30 September to 31 December 2025, providing a bufferAlligator Bioscience has renegotiated the outstanding loan from Fenja Capital and received subscription intentions from members of the board of directors and management^[1].
- Conversion option for Fenja Capital: The lender may convert its loan into shares at SEK 3.74 per share—a price 19.8% higher than the TO 13 exercise priceAlligator Bioscience has renegotiated the outstanding loan from Fenja Capital and received subscription intentions from members of the board of directors and management^[1].

While these changes reduce immediate pressure, they introduce new risks. The company must pay a 5% fee (SEK 1.2 million) and accrued interest to Fenja for the waiverAlligator Bioscience has renegotiated the outstanding loan from Fenja Capital and received subscription intentions from members of the board of directors and management^[1], and the conversion option could lead to further dilution if triggered.

Capital Structure and Investor Timing

The interplay between the TO 13 warrant exercise and Fenja's conversion rights creates a dynamic capital structure. If TO 13 warrants are exercised, the SEK 30.6 million inflow could offset the SEK 1.2 million fee and support operations. However, if Fenja exercises its conversion right, it could issue additional shares at a premium, potentially diluting existing shareholders further.

Investor timing is critical. The 11–15 September 2025 window represents a key inflection point. Investors acting before 11 September—when warrants cease trading—can secure their position in the exercise processAlligator Bioscience announces that 85% of the warrant programme TO 12 has been secured and that the outstanding loan has been renegotiated^[3]. Meanwhile, the board's subscription intentions (SEK 0.2 million) signal confidence in the company's prospectsAlligator Bioscience has renegotiated the outstanding loan from Fenja Capital and received subscription intentions from members of the board of directors and management^[1], which may stabilize sentiment during the exercise period.

Strategic Implications and Risks

The TO 13 warrant exercise offers Alligator Bioscience a lifeline, but its success hinges on execution. The company must balance the need for liquidity with the dilutive effects of new share issuance. For investors, the period ahead presents a high-stakes opportunity:
- Short-term liquidity boost: A successful warrant exercise could fund R&D or debt reduction.
- Dilution risks: Both the TO 13 exercise and Fenja's potential conversion could erode per-share value.
- Market confidence: The board's participation and 85% coverage of TO 12 warrantsAlligator Bioscience announces that 85% of the warrant programme TO 12 has been secured and that the outstanding loan has been renegotiated^[3] suggest institutional support, which may mitigate volatility.

Conclusion

Alligator Bioscience's TO 13 warrant exercise represents a strategic crossroads. The SEK 30.6 million potential inflow, combined with the renegotiated Fenja loan, could stabilize the company's finances but requires careful management of dilution and timing. Investors with a high-risk tolerance may find opportunities in the 11–15 September window, though they must remain vigilant about the interplay between warrant exercises, loan conversions, and equity structure. As the clock ticks toward the 15 September deadline, the market will closely watch how Alligator navigates these challenges.