TOP Financial issued 360.5 million shares after warrant holders exercised on a cashless basis, diluting existing shareholders by 145% with no cash proceeds.
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TOP Financial Group (NASDAQ: TOP) said Monday that all outstanding warrants to buy 428.9 million Class A ordinary shares were exercised on a cashless basis, producing 360.5 million new shares and zero cash for the company.
The new shares are restricted and subject to a six-month lock-up from the issuance date, the company said in a statement. Before the exercise, about 248 million Class A shares were outstanding. The 360.5 million new shares represent a roughly 145% dilution of the existing equity base. Total Class A shares now stand at 608.5 million. Class B shares remain unchanged at 10 million.
The warrants were issued in connection with a private placement the company recently completed. The cashless exercise means holders surrendered their warrants without paying the exercise price, based on the formula in the warrant agreement.
TOP Financial is an online brokerage based in Singapore and Hong Kong. Its operating subsidiaries hold licenses from the Securities and Futures Commission of Hong Kong and the Monetary Authority of Singapore to deal in securities and futures contracts, and to provide asset management services. The company also has an Australian-licensed subsidiary and a fintech development arm.
The lock-up runs six months from the date of issuance, which the company did not specify in the release. Given the July 21 announcement, the restriction would expire in late January 2027. During that period, the shares cannot be traded, sold, transferred, pledged, or otherwise disposed of, subject to the terms of the warrants.
The stock traded at $0.38 on Friday, down 92% from its 52-week high of $5.00, according to market data. The company did not provide revenue or earnings guidance in the release.
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