NEW YORK, July 25, 2026, 13:15 EDT — Shares of Nuburu OTCMKTS:BURU dropped 39% after investors raised alarm over the dilution risk posed by the company’s floating preferred issuance.
- Nuburu shares finished Friday at 4.44 cents, marking a 39% decline since July 17.
- The new Series B preferred totals $73.4 million in stated value, which is 4.5 times greater than Nuburu’s approximate $16.3 million market value for its common shares.
- 47% of the projected net proceeds from the offering went towards repaying debt.
Nuburu OTCMKTS:BURU closed Friday at 4.44 cents, falling 39% week on week. Based on the most recently reported number of shares, the company’s common equity stood at roughly $16.3 million. That figure is under a quarter of the face value assigned to its recently issued preferred stock.
The comparison is significant, as the preferred conversion rate is tied to Nuburu’s share price. When the price drops, it results in the issuance of more common shares.
The stated value of each preferred share is $100. This figure is divided by the lesser of two closing bid prices for conversion purposes. Holders may start converting after 45 days, constrained by a 9.99% ownership limit.
Nuburu distributed 733,853 Series B shares as part of its $38 million raise. The aggregate stated value totals $73.385 million, equating to 1.93 times the gross funds raised. This value is used as a conversion numerator and does not represent cash held by Nuburu. The instruments lack liquidation rights.
The table details the impact of price fluctuations on the initial conversion calculations.
| Assumed conversion price | Illustrative common shares | Multiple of current 366.4 million shares |
|---|---|---|
| $0.1555 | 471.9 million | 1.29 times |
| $0.1000 | 733.9 million | 2.00 times |
| $0.0444 | 1.653 billion | 4.51 times |
For demonstration only, not predictive. This calculation presumes each listed price matches the contractual conversion value and does not factor in timing, registration, ownership, or authorized-share limits.
Even the lowest scenario surpasses Nuburu’s 900 million authorized common shares. The purchase deal anticipates an additional increase in authorized shares, pending stockholder approval.
At the closing of the offering, just 205.6 million conversion shares were registered. Nuburu committed to register the additional conversion shares at a later date. As a result, the initial registration does not represent the total possible economic maximum.
A filing released Thursday detailed the extent of concentration in those securities. Esousa Group Holdings disclosed holding 45.34 million common shares, accounting for a limited 9.9% interest. This figure does not include 127.01 million pre-funded shares or conversion rights associated with 517,559 preferred shares.
The filings suggest that Esousa was allocated all of the pre-funded warrants, according to the offering amounts. Esousa also appears to have obtained around 70.5% of the preferred shares, inferred from the details in the two disclosures.
Esousa stated the ownership restriction subsequently halted all warrant exercises and preferred share conversions. The cap limits issuance to a single investor at a time, but it does not eliminate the overall possible supply.
Nuburu holds a contractual right to defend against conversion at reduced prices. The company may demand a cash payment upon share conversion, but only under specific conditions. These stipulations cover complete registration, availability of enough authorized shares, and the stock trading above about 31.1 cents for ten consecutive sessions. Friday’s price did not satisfy that market requirement.
The funding additionally cleared immediate debt. Nuburu reported paying back $15.5 million in debenture principal along with $1.25 million of Lyocon notes. Executive Chairman Alessandro Zamboni stated the repayments “decisively simplified our capital structure.” Stock Titan
The payments accounted for 47% of the projected net proceeds from the offering. Subtracting that figure, $18.85 million remains prior to allocations for acquisition commitments, working capital, and other intended uses. This is not an up-to-date figure for cash on hand.
The funding still far exceeds Nuburu’s operating capacity. The company posted unaudited revenue of $407,644 for the first quarter, while its net loss reached $459,898. The total funds raised amounted to roughly 93 times the sales for the quarter.
Risks: OTC trading can still be unstable and lack liquidity. Existing cash reserves might fall short, possibly requiring further fundraising or issuing additional shares. The Tekne deal is subject to approval under Italy’s Golden Power regulations, and the NYSE review might not be completed successfully.
U.S. markets resume trading Monday, July 27. Investors await Nuburu’s anticipated NYSE review filing and details on the planned reverse split. Any developments regarding Tekne approval would be considered significant. The preferred share conversion window is set to remain shut for the entire upcoming week.
Debt relief has improved Nuburu’s short-term liquidity. Investor attention during the week stayed on the floating conversion formula and the potential shares it could generate.
