Decoy Therapeutics Inc. (NASDAQ: DCOY), a clinical-stage biotech, carries 5.80 million shares of pending supply across warrants, convertible preferred stock, and an undrawn equity line — roughly nine times its entire 636,498-share public float. The company earns an 8-out-of-10 dilution risk score from ShareStructure, reflecting what amounts to a multi-layered expansion pipeline against one of the smallest floats on the Nasdaq Capital Market.
The Pre-Funded Warrant Overhang
The most immediate supply source is straightforward. Armistice Capital Master Fund holds 469,000 pre-funded warrants — warrants whose purchase price has been almost entirely prepaid, leaving a token $0.0001 exercise cost — equal to 73.7% of the current float. These require no stockholder vote, no clinical milestone, and no company action to convert into common stock. A resale registration statement (S-1 333-297381) went effective on July 17, 2026, so every exercised share is immediately free-trading.
Armistice has already been working through the position. Between early May and mid-August, approximately 123,217 pre-funded warrants were exercised, expanding shares outstanding by 23.2% in roughly fourteen weeks — from 531,968 to 655,185. A 9.99% beneficial ownership blocker does not cap total supply; it caps only the instantaneous position, resetting each time shares are distributed. The practical effect is a steady exercise-and-sell drip rather than a single block conversion.
That mechanism alone means effective near-term supply is approximately 1.11 million shares — 74% more than the headline float reported by standard data services.
What Reactivates in December
Two dormant facilities come back online around December 23, 2026, when a 180-day standstill imposed by the Armistice PIPE expires.
The first is a C/M Capital equity line of credit — a standby equity purchase agreement, meaning the company can force a counterparty to buy newly issued shares at a formula price — with roughly $5.0 million still undrawn. It prices at 95% of the lesser of the prior day's close or the volume-weighted average price, meaning the buyer always pays at least a 5% discount to the weaker of two market benchmarks. There is no floor price and no exchange cap on the number of shares issuable. The company's own prospectus concedes the 808,000 registered resale shares would represent approximately 60.3% of post-issuance shares outstanding.
Compounding the dilutive math: the company's merger agreement requires that 50% of net proceeds from the equity line be diverted to redeeming Series B Preferred Stock. The company must therefore issue roughly twice the shares to retain a given dollar of operating cash.
The second is a Ladenburg Thalmann at-the-market facility — a program allowing continuous, unannounced share sales into the open market — with no disclosed capacity limit.
The Gated Overhang
Beyond the live channels, a larger but more distant supply sits behind defined gates. A September 14, 2026 stockholder vote would unlock 2,961,085 milestone warrants exercisable at $5.91 and begin removing the first of two barriers on 401,126 shares underlying convertible preferred stock. The milestone warrants are struck 94% above the recent market and carry no price-reset provision, so they pose near-zero current exercise risk. But their trigger design means the very clinical catalysts that could push the stock above $5.91 would simultaneously open a compressed 90-day exercise window on a block equal to 4.65 times the entire float.
Separately, 213,198 placement agent warrants — held by Curvature Securities and affiliates including Ladenburg Thalmann — become exercisable around December 29 when a FINRA Rule 5110 lock-up lapses. Their $7.3875 strike is 142% above market.
Scale and History
The company has 100 million shares authorized against 655,185 outstanding. Five reverse stock splits since 2019 — cumulative compression exceeding 1-for-360,000 — have repeatedly compressed the count, only for new issuances to refill the structure. Split-adjusted twelve-month dilution stands at approximately 1,442%. Only 16 holders of record existed as of March 2026, concentrating nearly all supply among financing counterparties.
The company's quarterly cash burn of approximately $2.3 million against $8.3 million on hand implies a runway of roughly two and a half quarters — landing squarely on the December date when the equity line and ATM reactivate.