ToolGen Announces 70 Billion Won Rights Offering to Fund Patent Litigation and R&D
ToolGen decided on a rights offering of 777,000 shares (8.64% dilution) at a planned price of 90,200 won, raising approximately 70 billion won.
Proceeds will be used for operating funds: legal fees (patent interference and lawsuits) 26.3 billion won, R&D expenses 29.0 billion won, and SG&A 14.8 billion won.
Largest shareholder Genexine plans to subscribe only about 10% of its 96,602 share allotment, reducing its stake from 12.43% to an estimated 11.54%.
The company has sustained operating losses (2025 consolidated operating loss of 23.3 billion won) and negative operating cash flow (2025: -20.2 billion won), with cash dropping from 34.5 billion (end 2023) to 5.7 billion (Q1 2026).
Key business risks: US CRISPR-Cas9 patent interference where ToolGen is Senior Party but final outcome uncertain; ongoing CRISPR RNP patent infringement lawsuits; most pipelines are preclinical, leading to potential delays in licensing and commercialization.
Financial stability: current ratio 1,093.6% and debt ratio 7.7% appear healthy but are partly due to asset revaluation; accumulated deficit reached 170.5 billion won at end of Q1 2026.
New shares are not subject to lock-up, posing risk of price decline upon listing. Discount rate of 23% applied; planned offering price is 90,200 won.
The company has shown significant divergence from IPO projections (2023 estimated revenue 87.1 billion vs actual 1.1 billion) and may be subject to intensive scrutiny for the rights offering.