SOBRsafe Announces Closing of $8.2 Million Private Placement

Rhea-AI Summary

SOBRsafe (NASDAQ:SOBR), a provider of transdermal alcohol detection solutions, has closed a private placement with institutional investors, raising $8.2 million in gross proceeds. The company issued 2,024,691 units at $4.05 per unit, each consisting of one share of common stock (or pre-funded warrant) and multiple warrants. The Series A warrants are exercisable at $3.80 per share with a 5-year term, while the Series B warrants have a nominal exercise price. Both warrant series are subject to adjustments. Aegis Capital Corp. acted as the exclusive placement agent. The funds will be used for general corporate purposes and working capital. SOBRsafe has agreed to file registration statements for the resale of the securities.

Positive

• Raised $8.2 million in gross proceeds through private placement
• Issued 2,024,691 units at $4.05 per unit, including common stock and warrants
• Funds to be used for general corporate purposes and working capital

Negative

• Potential dilution of existing shareholders due to new share issuance
• Warrants subject to future dilutive issuances and adjustments
• Securities not registered under the Securities Act, limiting immediate resale options

Insights

Financial Analyst

SOBRsafe's $8.2 million private placement is a significant capital raise for a company with a market cap of just $2.26 million. This substantial infusion represents over 363% of their current market value, potentially transforming their financial position. The structure of the deal, including common stock and various warrants, is complex and dilutive.

The $4.05 unit price is notably higher than the current stock price, suggesting investor confidence. However, the $3.80 Series A warrant exercise price and the unique structure of the Series B warrants could lead to significant future dilution. The company's commitment to file registration statements for resale indicates a path to liquidity for investors but may put downward pressure on the stock price.

While the capital infusion is positive for near-term operations, the potential dilution and complexity of the deal structure warrant careful consideration. Investors should closely monitor how effectively management deploys this capital to drive growth and achieve profitability.

Legal Expert

This private placement raises several legal considerations. First, the use of a private placement exempts SOBRsafe from the rigorous registration requirements of a public offering under the Securities Act, allowing for a faster capital raise but with restrictions on resale. The company's agreement to file registration statements for resale is important for investor liquidity.

The complex warrant structure, particularly the Series B warrants with a $0.00001 exercise price, may face scrutiny from regulators concerned about potential market manipulation. The adjustable nature of the warrants based on future events adds another layer of complexity that could lead to disputes.

Stockholder approval requirements for warrant exercises indicate potential corporate governance implications. Investors should be aware that this deal may significantly impact their voting power and equity stake. The company must navigate carefully to ensure compliance with NASDAQ listing requirements and avoid triggering change of control provisions in existing agreements.

DENVER, CO / ACCESSWIRE / October 9, 2024 / SOBR Safe, Inc. (NASDAQ:SOBR) ("SOBRsafe"), provider of next-generation transdermal alcohol detection solutions, today announced the closing of a private placement with certain institutional investors. The aggregate gross cash proceeds were $8.2 million, before deducting fees to the placement agent and other offering expenses payable by the Company. The Company intends to use the net proceeds from the private placement for general corporate purposes and working capital.

In connection with the private placement, the Company issued an aggregate of 2,024,691 units. Each unit sold at an effective unit price of $4.05 per unit and consisted of one share of common stock (or one pre-funded warrant in lieu thereof), two (2) Series A warrants, each exercisable for one share of common stock at an initial exercise price of $3.80 per share and one Series B warrant at an exercise price of $0.00001 to purchase such number of shares of common stock as will be determined on the Reset Date (as defined in the Series B warrant). The Series A warrants and the Series B warrants are exercisable beginning on the date that Stockholder Approval (as defined in the Series A warrant) is obtained. The Series A warrants have a term of 5 years and the Series B warrants are exercisable until exercised in full. The exercise price and number of shares of common stock issuable upon exercise of the Series A warrants are subject to adjustment upon future dilutive issuances and stock splits, subject to a floor, and the exercise price and number of shares of common stock issuable upon exercise of the Series B warrants are subject to adjustment upon stock splits, subject to a floor, in each case, as described in more detail in the Current Report on Form 8-K to be filed in connection with the private placement.

The closing of the private placement occurred on October 9, 2024.

Aegis Capital Corp. acted as the Exclusive Placement Agent for the private placement. Lucosky Brookman LLP served as counsel to the Company. Sichenzia Ross Ference Carmel LLP served as counsel to Aegis Capital Corp.

The securities described above were sold in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the "Act"), and have not been registered under the Act, or applicable state securities laws. Accordingly, the securities 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 Act and such applicable state securities laws. Pursuant to a registration rights agreement with the investor, the Company has agreed to file one or more registration statements with the Securities and Exchange Commission (the "SEC") covering the resale of the common stock sold in the private placement and the common stock issuable upon exercise of the pre-funded warrants and the warrants sold in the private placement.

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 jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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About SOBRsafe™

Alcohol misuse is the fourth leading cause of preventable death in America, and the seventh worldwide. Yet prevention and monitoring solutions have not kept pace with this epidemic. Legacy technologies are invasive and inefficient, unhygienic and unconnected. There has to be a better way.

Enter SOBRsafe™. Our advanced transdermal (touch-based) technology detects and instantaneously reports the presence of alcohol as emitted through a user's skin - no breath, blood or urine sample is required. With a powerful backend data platform, SOBRsafe provides next generation, passive detection technology for the behavioral health, judicial and consumer markets, and for licensing and integration.

The SOBRsafe technology is commercially available for point-of-care screening (SOBRcheck) and continuous monitoring (SOBRsure). At SOBRsafe, our mission is to create better outcomes and save lives. To learn more, visit www.sobrsafe.com.

Safe Harbor Statement

Our prospects here at SOBRsafe are subject to uncertainties and risks. This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. The Company intends that such forward-looking statements be subject to the safe harbor provided by the foregoing Sections. These forward-looking statements are based largely on the expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond the control of management. Therefore, actual results could differ materially from the forward-looking statements contained in this presentation. The Company cannot predict or determine after the fact what factors would cause actual results to differ materially from those indicated by the forward-looking statements or other statements. The reader should consider statements that include the words "believes", "expects", "anticipates", "intends", "estimates", "plans", "projects", "should", or other expressions that are predictions of or indicate future events or trends, to be uncertain and forward-looking. We caution readers not to place undue reliance upon any such forward-looking statements. The Company does not undertake to publicly update or revise forward-looking statements, whether because of new information, future events or otherwise. Additional information respecting factors that could materially affect the Company and its operations are contained in the Company's filings with the SEC which can be found on the SEC's website at www.sec.gov.

Contact SOBRsafe:

IR@sobrsafe.com

SOURCE: #SOBR Safe, Inc.

View the original press release on accesswire.com

FAQ

How much did SOBRsafe (SOBR) raise in its recent private placement?

SOBRsafe (SOBR) raised $8.2 million in gross proceeds through its recent private placement with institutional investors.

What was the price per unit in SOBRsafe's (SOBR) private placement on October 9, 2024?

The effective unit price in SOBRsafe's (SOBR) private placement was $4.05 per unit.

What does each unit in SOBRsafe's (SOBR) private placement consist of?

Each unit consists of one share of common stock (or pre-funded warrant), two Series A warrants, and one Series B warrant.

What is the exercise price of the Series A warrants issued by SOBRsafe (SOBR)?

The initial exercise price of the Series A warrants is $3.80 per share.