Modalis is not doing a plain equity raise. The biotech plans to allot 240,000 stock acquisition rights to EVO FUND, equal to up to 24,000,000 shares, and pair them with an unsecured private bond of up to ¥300 million. The company presents the package as a ¥1,331,640,000 fundraising plan, but the cash arrives in two very different ways: the bond is scheduled to be paid in on June 26, while the larger equity-linked piece only turns into cash if the warrants are exercised between June 15, 2026 and March 15, 2027.
The warrant pricing is the eye-catching part. The initial exercise price is ¥56, then, starting two trading days after the June 12 allotment, it resets every trading day to 100% of the previous trading day's closing price, subject to a floor of ¥28. Modalis says the structure carries no discount to the reference market price, which is unusual for reset warrants. The company also built in some pacing controls: after one month it can designate periods when EVO FUND cannot exercise, and the agreement tracks Tokyo Stock Exchange rules that, in principle, block exercises above 10% of the listed share count at the payment date in a single calendar month.
That does not make dilution disappear. The supplemental materials put maximum dilution at 24.91%, based on 24,000,000 potential shares against the company's share count as of April 27. The bond, meanwhile, functions as bridge liquidity: it carries a 0.0% coupon, matures on March 15, 2027, and can be reduced in ¥7.5 million blocks if warrants are exercised before June 25. While any of the bond remains outstanding, warrant exercise proceeds are expected to be used for early repayment, so part of the later equity cash first goes to paying back the earlier bridge money.
The near-term payoff is extra liquidity during a spending-heavy stretch. Modalis said it had ¥2,812 million in cash and deposits at March 31, yet also reported a first-quarter operating loss of ¥342 million and said MDL-101 is entering a phase of GMP manufacturing, GLP toxicology, quality work and regulatory preparation ahead of an IND filing and clinical start. The company put the funding need through clinical proof of concept at roughly ¥2 billion to ¥3 billion. In the current raise, it earmarked ¥700 million for R&D on MDL-101 and other internal programs, ¥331 million for stronger R&D staffing and other working capital, and ¥300 million for bond repayment. That means the deal thickens the cash cushion now, but most of the headline ¥1.33 billion still depends on market conditions and actual warrant exercise.