Ayala Pharmaceuticals Inc (ADXS)

[DewDiligence]

From the grapevine: ADXS tried to raise money approximately one month ago without warrants, but the prospective buyers demanded warrants, so the planned offering was scrapped before it got off the ground.

Next, ADXS filed a new shelf registration, which (unlike the old shelf), included warrants and units.

Meanwhile, the prospective buyers of the failed offering from a month ago, realizing that another offering was coming, shorted the stock. They will cover their short positions (in whole or in part) with shares from today’s offering, clipping the warrants to retain potential upside at zero (in some cases negative) cost.

All perfectly legal.