SuperCom Announces Pricing of $6.0 Million Registered Direct Offering

Rhea-AI Summary

SuperCom (NASDAQ: SPCB), a provider of e-Government, IoT, and Cybersecurity solutions, has announced a $6.0 million registered direct offering of 545,454 ordinary shares priced at $11.00 per share. The offering is expected to close around January 31, 2025, with Maxim Group serving as the sole placement agent.

The company plans to utilize the net proceeds for working capital, research and development, potential acquisitions, and other general corporate purposes. The offering is being conducted under SuperCom's shelf registration statement on Form F-3, which became effective on January 21, 2025.

Positive

• Secured $6.0 million in additional funding through registered direct offering
• Strategic capital allocation for R&D and potential acquisitions
• Successfully executed offering at $11.00 per share

Negative

• Potential dilution of existing shareholders' value through new share issuance
• Additional shares in market may create downward pressure on stock price

Insights

Financial Analyst

The $6.0 million registered direct offering by SuperCom reveals both opportunities and challenges for the e-Government and IoT solutions provider. The $11.00 per share pricing, representing an approximate 18% discount to current market value, signals significant pressure to secure immediate funding, while the 545,454 new shares will result in notable dilution for existing shareholders.

The offering's structure as a registered direct placement to institutional investors, rather than a traditional public offering, suggests a strategic decision to expedite the capital raise while minimizing market impact. However, the substantial discount required to attract institutional investors raises questions about market perception of the company's risk profile and near-term prospects.

The stated use of proceeds for working capital, R&D and potential acquisitions presents a mixed narrative. While investment in R&D could strengthen SuperCom's competitive position in the rapidly evolving IoT and cybersecurity markets, the inclusion of working capital in the use of proceeds may indicate underlying operational cash flow challenges. The mention of potential acquisitions suggests an opportunistic growth strategy, though the relatively modest size of the raise may limit transformative deals.

The timing of this offering, following closely after the January 21st effectiveness of SuperCom's shelf registration, indicates careful preparation and suggests the company may have additional financing flexibility through the shelf registration if needed. The engagement of Maxim Group as placement agent provides institutional credibility, though investors should monitor the final allocation of shares to gauge institutional confidence in SuperCom's growth strategy.

TEL AVIV, Israel, Jan. 30, 2025 /PRNewswire/ -- SuperCom (NASDAQ: SPCB), a global provider of secured solutions for the e-Government, IoT, and Cybersecurity sectors, announced today that it has entered into securities purchase agreements with certain institutional investors to purchase 545,454 ordinary shares in a registered direct offering at a purchase price of $11.00 per ordinary share.

The gross proceeds to SuperCom from the offering are estimated to be approximately $6.0 million before deducting the placement agent's fees and other estimated offering expenses. The offering is expected to close on or about January 31, 2025, subject to the satisfaction of customary closing conditions. SuperCom intends to use net proceeds from this offering for working capital, research and development, potential acquisitions and other general corporate purposes.

Maxim Group LLC is acting as the sole placement agent in connection with the offering.

The ordinary shares are being offered pursuant to SuperCom's shelf registration statement on Form F-3 (File No. 333-284219), which was declared effective by the U.S. Securities and Exchange Commission (the "SEC") on January 21, 2025. The offering will be made only by means of a prospectus supplement that forms a part of such registration statement.

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 offering will be filed by SuperCom with the SEC. When available, copies of the prospectus supplement, 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) 895-3745.

About SuperCom

Since 1988, SuperCom has been a global provider of traditional and digital identity solutions, providing advanced safety, identification, and security solutions to governments and organizations, both private and public, worldwide. Through its proprietary e-Government platforms and innovative solutions for traditional and biometrics enrollment, personalization, issuance, and border control services, SuperCom has inspired governments and national agencies to design and issue secure Multi-ID documents and robust digital identity solutions to its citizens and visitors. SuperCom offers a unique all-in-one field-proven RFID & mobile technology and product suite, accompanied by advanced complementary services for various industries, including healthcare and homecare, security and safety, community public safety, law enforcement, electronic monitoring, and domestic violence prevention. For more information, please visit SuperCom's website: www.supercom.com

Forward-Looking Statements

This press 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. Statements preceded or followed by or that otherwise include the words "believes", "expects", "anticipates", "intends", "projects", "estimates", "plans", and similar expressions or future or conditional verbs such as "will", "should", "would", "may" and "could" are generally forward-looking in nature and not historical or current facts. These forward-looking statements are subject to risks and uncertainties that could cause our actual results to differ materially from the statements made. Examples of these statements include, but are not limited to, statements regarding business and economic trends, the levels of consumer, business and economic confidence generally, the adverse effects of these risks on our business or the market price of our ordinary shares, and other risks and uncertainties described in the forward looking statements and in the section captioned "Risk Factors" in Amendment No. 1 to our Annual Report on Form 20-F/A for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (the "SEC") on August 14, 2024, our reports on Form 6-K filed from time to time with the SEC and our other filings with the SEC. Except as required by law, we not undertake any obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this press release.

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SuperCom Investor Relations: ir@supercom.com

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SOURCE SuperCom

FAQ

What is the size and price of SuperCom's (SPCB) January 2025 registered direct offering?

SuperCom's registered direct offering consists of 545,454 ordinary shares at $11.00 per share, totaling approximately $6.0 million in gross proceeds.

How will SuperCom (SPCB) use the proceeds from its January 2025 offering?

SuperCom plans to use the net proceeds for working capital, research and development, potential acquisitions, and other general corporate purposes.

When is SuperCom's (SPCB) January 2025 registered direct offering expected to close?

The offering is expected to close on or about January 31, 2025, subject to customary closing conditions.

Who is the placement agent for SuperCom's (SPCB) January 2025 offering?

Maxim Group is acting as the sole placement agent for the offering.

What is the registration status of SuperCom's (SPCB) January 2025 offering?

The offering is being conducted under SuperCom's shelf registration statement on Form F-3 (File No. 333-284219), which was declared effective by the SEC on January 21, 2025.