Decoy Therapeutics Inc. filed a Current Report on Form 8-K with the SEC on September 23, 2026, disclosing the closing of a warrant inducement transaction that generated approximately $3.85 million in aggregate gross proceeds before deducting placement agent fees and other expenses.

Key Highlights

  • Gross proceeds: The transaction yielded approximately $3.85 million before placement agent fees and other expenses.
  • Warrants exercised: A single holder exercised Series B Milestone Warrants covering 1,184,434 shares of common stock, par value $0.0001 per share.
  • Reduced exercise price: The exercise price of the Existing Warrants was lowered from $5.91 per share to $3.25 per share; the same reduction was applied to the outstanding Series A and Series C Milestone Warrants.
  • New Warrants issued: The company issued new unregistered warrants to purchase up to 2,368,868 shares, representing 200% of the shares underlying the exercised warrants, at an exercise price of $3.25 per share.
  • New Warrant terms: The New Warrants are exercisable immediately upon issuance, expire on the fifth anniversary of issuance, and carry a 9.99% beneficial ownership limitation.
  • Registration commitment: The company agreed to file a resale registration statement covering shares issuable upon exercise of the New Warrants within 15 calendar days of the Inducement Letter date.
  • Use of proceeds: The company disclosed it intends to use net proceeds for working capital and other general corporate purposes.

Decoy Therapeutics Warrant Inducement: Terms and Structure

According to the filing, Decoy Therapeutics Inc. (NASDAQ:DCOY) entered into a warrant inducement letter agreement on September 22, 2026, with a holder of its outstanding Series A, Series B, and Series C milestone-based common warrants, all originally issued on June 29, 2026. Under the agreement, the holder exercised the Series B Milestone Warrants in full for cash, covering 1,184,434 shares of common stock. The transaction closed on September 23, 2026.

The company disclosed that, as an inducement to prompt the immediate cash exercise, it reduced the exercise price on the Existing Warrants from $5.91 per share to $3.25 per share. The filing also notes that the exercise prices of the Series A and Series C Milestone Warrants were reduced from $5.91 per share to $3.25 per share as part of the same transaction, though the other terms of those warrants were not amended. The Existing Warrants' shares were already registered for resale pursuant to the company's effective registration statement on Form S-1 (File No. 333-297381), according to the filing.

As consideration for the immediate exercise, the company issued new unregistered warrants in a private placement on September 23, 2026, to purchase up to 2,368,868 shares of common stock. The filing states these New Warrants contain customary anti-dilution adjustments and cashless exercise provisions, are not subject to stockholder approval, and were offered in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, with the holder representing it is an "accredited investor." The company also agreed, subject to certain exceptions, not to issue shares or Common Stock equivalents for 30 days following the Inducement Letter, and not to enter into any variable rate transaction for 180 days after the effective date of the resale registration statement covering the New Warrant shares.

What Was Disclosed

Decoy Therapeutics disclosed a warrant inducement agreement dated September 22, 2026, under which a single holder exercised Series B Milestone Warrants for 1,184,434 shares at a reduced price of $3.25, generating approximately $3.85 million in gross proceeds, and received new unregistered warrants for up to 2,368,868 shares in return.