Castellum Announces Closing of $2.7 Million Registered Direct Offering
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Castellum, Inc.'s recent capital raise through a registered direct offering and concurrent private placement is a strategic move aimed at improving the company's financial position. The issuance of over 8 million shares and similar warrants at a combined effective offering price of $0.32 is a critical step for the company. It is essential to note that the gross proceeds of approximately $2.7 million, before expenses, indicate a relatively small scale capital infusion, which suggests that the company may be targeting specific short-term financial goals rather than a broad expansion strategy.
Investors should consider the dilutive effect of such offerings on existing shareholders. The addition of 8,437,501 shares (or pre-funded warrants) and the same number of warrants at a slightly higher exercise price of $0.35 could potentially dilute the value of current shares. However, the impact on share price can vary depending on investor perception of the company's growth prospects and the use of the raised funds. The stated intention to use the proceeds for reducing net leverage and increasing liquidity is positive, as it may lead to an improved credit profile and financial flexibility. This could be beneficial for the company's ability to secure new contracts and support business growth.
The cybersecurity sector is highly competitive and companies like Castellum, Inc. must continuously invest in innovation and customer acquisition to maintain and enhance their market position. The capital raised may enable Castellum to invest in these areas, which could be crucial for long-term success. The CEO's forward-looking statement about landing new contract wins in 2024 indicates a focus on revenue growth, which is a fundamental driver of stock performance in this industry.
It is also worth noting the role of Maxim Group LLC as the sole placement agent, which can be a testament to the company's network and ability to facilitate such financial transactions. The effectiveness of the shelf registration statement and the subsequent prospectus supplement filing with the SEC demonstrate regulatory compliance and transparency, which are key factors in maintaining investor confidence.
From a legal perspective, the offering's structure, involving both registered direct offerings and concurrent private placements, is designed to comply with the Securities Act of 1933. The reliance on Section 4(a)(2) and Regulation D for the private placement is a common approach for transactions that are not intended for a general public offering, enabling the company to raise capital from selected investors. The absence of registration for the private placement warrants underlines the importance for investors to understand the limitations and rights associated with these securities.
Furthermore, the company's adherence to SEC regulations by filing a prospectus supplement provides a layer of legal protection for both the company and the investors, ensuring that all material information is disclosed. The clear disclaimer that the press release is not an offer to sell or a solicitation of an offer to buy is a standard precaution to avoid potential legal issues related to securities offerings.
BETHESDA, Md., Jan. 29, 2024 (GLOBE NEWSWIRE) -- Castellum, Inc. (the “Company”) (NYSE-American: CTM), a cybersecurity, electronic warfare, and software services company focused on the federal government today announced the closing of its previously announced registered direct offering, consisting of the sale of 8,437,501 shares of common stock (or pre-funded warrants in lieu thereof). In a concurrent private placement, the Company also agreed to issue and sell to the investor warrants to purchase up to 8,437,501 shares of common stock. The combined effective offering price for each share of common stock (or pre-funded warrant in lieu thereof) and accompanying warrant was
The gross proceeds to the Company from the registered direct offering and concurrent private placement were approximately
“Today’s announcement represents another important milestone for Castellum,” said Mark Fuller, President and CEO. “We have strengthened our balance sheet by reducing our net leverage while increasing our liquidity to support the growth of our business. We now look forward to landing some new contract wins in 2024 to improve our income statement and further improve our net leverage ratios.”
Maxim Group LLC acted as the sole placement agent in connection with the offering.
The shares of common stock (or pre-funded warrants in lieu thereof) were offered pursuant to a shelf registration statement on Form S-3 (File No. 333-275840), which was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on December 12, 2023. The offering of shares of common stock (or pre-funded warrants in lieu thereof) were made only by means of a prospectus supplement that forms a part of such registration statement. The warrants issued in the concurrent private placement and the shares issuable upon exercise of such warrants were offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Act”), and Regulation D promulgated thereunder and have not been registered under the Act or applicable state securities laws.
This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor were there any sales of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. A prospectus supplement relating to the shares of common stock and pre-funded warrants was filed by the Company with the SEC on January 29, 2024. Copies of the prospectus supplement relating to the registered direct offering, together with the accompanying prospectus, can be obtained at the SEC's website at www.sec.gov or from Maxim Group LLC, 300 Park Avenue, New York, NY 10022, Attention: Syndicate Department, or via email at syndicate@maximgrp.com or telephone at (212) 895-3500.
About Castellum, Inc.
Castellum, Inc. (NYSE-American: CTM) is a defense-oriented technology company that is executing strategic acquisitions in the cybersecurity, MBSE, and information warfare areas - http://castellumus.com/.
Forward-Looking Statements:
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain, based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Words such as “will,” “would,” “believe,” and “expects,” and similar language or phrasing are indicative of forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and other factors, many of which are outside of the Company’s control, that could cause actual results to differ (sometimes materially) from the results expressed or implied in the forward-looking statements, including, among others: the Company’s ability to close the described debt financing; its ability to effectively integrate and grow its acquired companies; its ability to identify additional acquisition targets and close additional acquisitions; the impact on the Company’s revenue due to a delay in the U.S. Congress approving a federal budget; and the Company’s ability to maintain the listing of its common stock on the NYSE American LLC. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in Item 1A. “Risk Factors” section of the Company’s recently filed Form 10-Q, Item 1A. "Risk Factors” in the Company’s most recent Form 10-K, and other filings with the Securities and Exchange Commission which can be viewed at www.sec.gov. These risks and uncertainties, or not closing the described potential debt financing in this press release, could cause the Company's actual results to differ materially from those indicated in the forward-looking statements.
Contact:
Mark Fuller, President & CEO
info@castellumus.com
301-961-4895
A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/fae4ce7f-93ba-4053-ba6d-f753f16e4245
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