EpicQuest Education Announces Closing of $1.8 Million Offering

Rhea-AI Summary

EpicQuest Education Group International Limited (NASDAQ: EEIQ) has successfully closed a $1.8 million private placement offering on May 27, 2025. The offering consisted of 4,500,000 ordinary shares and warrants to purchase 13,500,000 ordinary shares at a combined purchase price of $0.40 per share. The warrants are immediately exercisable at $0.48 per share and will expire one year after issuance. The company intends to use the proceeds for general corporate purposes and to support its operating and growth objectives. The private placement was conducted under Section 4(a)(2) of the Securities Act and/or Regulation S exemptions, restricting the sale of these securities in the United States unless registered or exempted.

Positive

• Secured $1.8 million in immediate funding for operations and growth
• Warrants provide potential for additional future funding if exercised

Negative

• Significant dilution potential with 4.5M new shares and 13.5M warrant shares
• Low offering price of $0.40 per share indicates weak market position
• Short warrant exercise period of only one year

Insights

Financial Analyst

EpicQuest raised $1.8M through a dilutive offering at a significant discount, with warrants creating potential additional dilution.

EpicQuest Education has closed a $1.8 million private placement offering, selling 4.5 million ordinary shares at $0.40 per share with accompanying warrants to purchase 13.5 million additional shares at $0.48 each. This capital raise structure reveals several key insights:

The $0.40 share price likely represents a significant discount to the current market price, which is common for these types of offerings but indicates the company needed to offer favorable terms to attract investors. More concerning is the warrant structure - each share comes with warrants to purchase 3 additional shares (13.5M ÷ 4.5M), creating a 4:1 ratio that could lead to substantial future dilution if exercised.

The one-year exercise period for these warrants creates a relatively short timeframe for potential dilution. If all warrants are exercised, it would bring in additional capital of $6.48 million (13.5M × $0.48) but at the cost of 300% more shares outstanding from this offering alone.

The unspecified "general corporate purposes" use of proceeds suggests possible cash flow challenges, as companies typically outline specific growth initiatives when raising capital from a position of strength. This financing appears to be primarily about securing operational runway rather than funding specific expansion plans.

This offering structure suggests EpicQuest faces challenges in raising capital on more favorable terms, with the significant warrant coverage indicating investor skepticism that required sweetened terms to complete the deal.

MIDDLETOWN, Ohio, May 30, 2025 /PRNewswire/ -- EpicQuest Education Group International Limited (NASDAQ: EEIQ), ("EpicQuest Education", "EEIQ" or the "Company"), a provider of higher education for domestic and international students in the US, Canada and the UK, today announced that on May 27, 2025, it closed a private placement offering of 4,500,000 ordinary shares and warrants to purchase 13,500,000 ordinary shares at a combined purchase price of $0.40 per share and accompanying warrants for gross proceeds of $1.8 million. The warrants are immediately exercisable at an exercise price of $0.48 per share, and expire one year after the issuance date.

The Company plans to use the proceeds from this offering for general corporate purposes and believes that it will provide it with the financial resources to help it to meet its operating and growth goals.

The private placement of the securities was made in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act and/or Regulation S thereunder. Accordingly, the securities issued in the private placement may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, 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.

More complete information on the offering is set forth in the Form 6-K and its exhibits filed with the Securities and Exchange Commission on May 30, 2025.

About EpicQuest Education Group International Limited

EpicQuest Education Group International Limited ("EpicQuest Education" or the "Company") provides comprehensive education solutions for domestic and international students seeking university and University degrees in the US, Canada and the UK. The Company owns and operates EduGlobal University, based in British Columbia, Canada, which focuses on English proficiency educational programming for students pursuing academic degrees. The Company operates and is a 70% owner of Davis University, a career training University located in Toledo, Ohio. In addition, the Company has a recruiting relationship with the Miami University Regional campuses, where it maintains residential facilities, a full-service cafeteria, recreational facilities, shuttle buses and an office for the regional campuses that provides study abroad and post-study services for its students; these facilities are not owned, maintained, operated or are a part of Miami University. The Company is also a recruiting agent for the University of the West of Scotland (through The Education Group (London) Ltd) and Coventry University, both of which are located in the UK. EpicQuest Education recently established a wholly owned subsidiary, Gilmore Inv LLC, in Ohio, that will offer international educational programs related to kinesiology and recreation education. The Company also established a company in Ohio, SouthGilmore LLC that has been formed to organize sports-related entertainment projects, which is 40% owned by Gilmore. For more information, please visit www.epicquesteducation.com.

Safe Harbor Statement

Certain of the statements made in this press release are "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may," "will," "anticipate," "assume," "should," "indicate," "would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "point to," "project," "could," "intend," "target" and other similar words and expressions of the future.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our most recent Form 20-F and otherwise in our SEC reports and filings. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at http://www.sec.gov. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements otherwise are made.

Contacts:

EpicQuest Education Group International Limited
+1 513-649-8350
info@epicquesteducation.com

Investor Relations:
Precept Investor Relations LLC
David Rudnick
+1 646-694-8538
david.rudnick@preceptir.com

Source: EpicQuest Education Group International Limited

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SOURCE EpicQuest Education Group International Limited

FAQ

What is the size and price of EpicQuest Education's (EEIQ) recent offering?

EpicQuest Education's offering consisted of 4.5 million ordinary shares and warrants to purchase 13.5 million shares at a combined price of $0.40 per share, raising $1.8 million in gross proceeds.

What are the terms of EEIQ's warrant offering in May 2025?

The warrants are immediately exercisable at $0.48 per share and expire one year after the issuance date of May 27, 2025.

How will EpicQuest Education use the proceeds from its $1.8M offering?

The company plans to use the proceeds for general corporate purposes and to help meet its operating and growth goals.

What are the restrictions on the securities issued in EEIQ's private placement?

The securities cannot be offered or sold in the United States except through an effective registration statement or applicable exemption from registration requirements.