Castellum Announces Closing of $5.0 Million Public Offering of Common Stock and Warrants

Rhea-AI Summary

Castellum (NYSE-American: CTM), a cybersecurity and federal government services company, has completed its previously announced public offering, raising $5.0 million in gross proceeds. The offering consisted of 4,166,667 Units priced at $1.20 per Unit, with each unit comprising one common stock share and one warrant. The warrants are exercisable immediately at $1.22 per share and expire in 60 days. Maxim Group LLC served as the sole placement agent for the offering. The company plans to use the net proceeds for working capital and general corporate purposes. The offering was conducted under a previously filed and effective shelf registration statement on Form S-3.

Positive

• Successful completion of $5.0 million capital raise to strengthen working capital
• Warrants provide potential for additional near-term capital if exercised at $1.22 per share

Negative

• Offering likely to cause immediate dilution for existing shareholders
• Short 60-day warrant exercise period may create selling pressure
• Offering price of $1.20 per unit may represent a discount to market price

Insights

Financial Analyst

Castellum's $5M offering boosts liquidity but dilutes existing shareholders with significant warrant-driven potential dilution.

Castellum has closed a $5 million public offering through the issuance of 4,166,667 units priced at $1.20 per unit. Each unit contains one common share and one warrant exercisable at $1.22 with a short 60-day exercise window. This capital raise appears aimed at addressing immediate working capital needs rather than specific strategic initiatives.

The offering structure reveals several important dynamics. The 1.7% premium on the warrant exercise price provides minimal upside incentive, suggesting the company prioritized certainty of funds over pricing. The extremely short 60-day exercise period is unusual and indicates urgency in securing additional capital beyond the initial $5 million. If all warrants are exercised, Castellum would receive approximately $5.08 million in additional proceeds, effectively doubling the raise.

This offering creates significant dilution for existing shareholders. The 4.17 million new shares represent substantial dilution to the current float. More concerning is the potential for another 4.17 million shares if warrants are exercised, creating a second dilution wave. The offering's structure suggests Castellum may face liquidity challenges, using this capital primarily for working capital rather than growth initiatives.

Maxim Group's involvement as placement agent on a "reasonable best-efforts" basis (rather than a firm commitment underwriting) further indicates potential market skepticism about Castellum's ability to raise capital under more favorable terms. This financing improves Castellum's immediate liquidity position but comes at a significant cost to existing shareholders through dilution and potential future pressure on share price.

VIENNA, Va., June 16, 2025 (GLOBE NEWSWIRE) -- Castellum, Inc. (the “Company” and “Castellum”) (NYSE-American: CTM), a cybersecurity, electronic warfare, and software services company focused on the federal government, today announced the closing of its previously announced public offering of 4,166,667 Units at a public offering price of $1.20 per Unit. Each unit consists of one share of common stock and one warrant to purchase one share of common stock. The warrants are immediately exercisable at $1.22 per share and will expire 60 days from the date of issuance. The shares of common stock and warrants are immediately separable and were issued separately.

Gross proceeds from the offering are approximately $5.0 million before deducting placement agent fees and offering expenses. Castellum intends to use the net proceeds of the offering for working capital and general corporate purposes.

Maxim Group LLC acted as the sole placement agent on a reasonable best-efforts basis for the offering.

A shelf registration statement on Form S-3 (File No. 333-284205) relating to the securities being offered was previously filed with the U.S. Securities and Exchange Commission (the “SEC”) and became effective on January 24, 2025. The shares of common stock and shares underlying the warrants were offered only by means of a prospectus. A preliminary prospectus supplement and the accompanying prospectus relating to and describing the terms of the public offering have been filed with the SEC. A final prospectus supplement and an accompanying prospectus relating to the offering has been with the SEC and is available on the SEC’s website at www.sec.gov. Copies of the final prospectus supplement and accompanying prospectus relating to the public offering may be obtained by contacting Maxim Group LLC, at 300 Park Avenue, 16th Floor, New York, NY 10022, Attention: Prospectus Department, or by telephone at (212) 895-3745 or by email at syndicate@maximgrp.com.

This press release does not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About Castellum, Inc. (NYSE-American: CTM):

Castellum, Inc. (NYSE-American: CTM) is a cybersecurity, electronic warfare, and software engineering services company focused on the federal government - https://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 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, operating under a prolonged continuing resolution, government shutdown, or breach of the debt ceiling, as well as the imposition by the U.S. government of sequestration in the absence of an approved budget; the ability of the U.S. federal government to unilaterally cancel a contract with or without cause, and more specifically, the potential impact of the U.S. DOGE Service Temporary Organization on government spending and terminating contracts for convenience. 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 equity financing in this press release, could cause the Company's actual results to differ materially from those indicated in the forward-looking statements. Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

Contact:

Glen Ives
President and Chief Executive Officer
Phone: (703) 752-6157
info@castellumus.com
https://castellumus.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/216bfa30-3c99-4e23-a43d-7b58f9f7803b

FAQ

What is the size and structure of Castellum's (CTM) June 2025 public offering?

Castellum's offering consists of 4,166,667 Units at $1.20 per Unit, with each unit containing one common share and one warrant, raising $5.0 million in gross proceeds.

What are the terms of the warrants in Castellum's (CTM) offering?

The warrants are immediately exercisable at $1.22 per share and will expire 60 days from the date of issuance.

How does Castellum (CTM) plan to use the proceeds from the offering?

Castellum intends to use the net proceeds from the offering for working capital and general corporate purposes.

Who was the placement agent for Castellum's (CTM) public offering?

Maxim Group LLC acted as the sole placement agent on a reasonable best-efforts basis for the offering.

What is Castellum's (CTM) main business focus?

Castellum is a cybersecurity, electronic warfare, and software services company focused on serving the federal government.