Castellum Announces Pricing of $2.7 Million Registered Direct Offering
- None.
- None.
The strategic move by Castellum, Inc. to engage in a registered direct offering and concurrent private placement is a significant financial maneuver, indicative of the company's need to raise capital. The issuance of over 8 million shares and warrants at a combined effective offering price of $0.32 is a critical detail. This pricing suggests a valuation angle that investors should closely evaluate, especially considering the exercise price of the warrants at $0.35, which is slightly above the offering price.
From a financial perspective, the gross proceeds of approximately $2.7 million, before fees and expenses, is relatively modest for a company operating in the high-cost domains of cybersecurity and electronic warfare. This could imply either a strategic move to fund a specific initiative or a signal of a more pressing need for liquidity. The impact on existing shareholders might be dilutive and the market's response to such offerings could reflect in the company's stock performance in the short term.
Examining the broader market implications, Castellum's decision to raise funds through equity rather than debt highlights current market conditions and investor sentiment. In the cybersecurity sector, where rapid innovation and competitive positioning are key, such capital infusions are often necessary to stay relevant. However, the relatively low offering price might raise questions about investor confidence and the company's growth prospects.
Furthermore, the fact that the warrants become exercisable only upon shareholder approval is a governance aspect that investors should not overlook. It serves as a checkpoint, potentially affecting the timeline of fund utilization and project execution. In the long-term, the success of these investments will be measured by the company's ability to leverage the raised capital into profitable ventures that enhance its competitive edge in the cybersecurity landscape.
From a legal standpoint, the nature of the transaction involving both a registered direct offering and a private placement warrants attention. The need for shareholder approval for the warrants to become exercisable is not only a regulatory compliance matter but also a reflection of corporate governance practices. Investors should be aware of the legal nuances of such transactions, including the rights and restrictions associated with the pre-funded warrants and the implications of the five-year expiration period of the warrants.
Additionally, the legal framework governing the offering, including the registration requirements and exemptions, plays a crucial role in the execution of the offering and the rights of the stakeholders involved. It is essential for investors to understand the legal parameters that the company operates within, as they can have material implications on the timing and success of the capital raise.
BETHESDA, Md., Jan. 25, 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 that it has entered into a securities purchase agreement with an institutional investor to purchase 8,437,501 shares of common stock (or pre-funded warrants in lieu thereof) in a registered direct offering. 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 is
The gross proceeds to the Company from the registered direct offering and concurrent private placement are estimated to be approximately
Maxim Group LLC is acting as the sole placement agent in connection with the offering.
The shares of common stock (or pre-funded warrants in lieu thereof) are being 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) will be made only by means of a prospectus supplement that forms a part of such registration statement. The warrants to be 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 will there be 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 will be filed by the Company with the SEC. When available, 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/81f6c2c4-1435-4068-a7c2-53f0bc428dce
FAQ
What is the registered direct offering and concurrent private placement announced by Castellum, Inc. (CTM)?
How many shares of common stock will Castellum, Inc. issue in the offering?
What is the effective price per share in the offering?
When will the warrants become exercisable?
What is the exercise price of the warrants?
