Shares of DEFSEC Technologies Inc. (NASDAQ:DFSC) dropped 17.7% on Wednesday after the cybersecurity company revealed plans for a registered direct share offering alongside a concurrent private placement involving shares and warrants.
Under the terms of the transaction, DEFSEC intends to issue 566,040 common shares at a price of CAD$3.64 (US$2.65) per share through the registered direct offering. In addition, the company will issue unregistered warrants in a private placement that allow the purchase of up to an additional 566,040 common shares at an exercise price of CAD$4.27 per share. The warrants will be exercisable immediately upon issuance and will remain valid for a period of five years.
The combined offerings are expected to generate gross proceeds of approximately CAD$2.1 million, before accounting for placement agent commissions and other related expenses. DEFSEC said the funds will be used to support working capital needs and for general corporate purposes.
H.C. Wainwright & Co. has been appointed as the exclusive placement agent for the transaction, which is anticipated to close on or about December 18, 2025, subject to standard closing conditions.
The sharp pullback in DEFSEC’s share price reflects a common market response to equity offerings, which can dilute existing shareholders. DEFSEC’s shares are listed on both the TSX Venture Exchange and the Nasdaq.