U.S. GOLD CORP. ANNOUNCES $4.9 MILLION REGISTERED DIRECT OFFERING

Rhea-AI Summary

U.S. Gold Corp. announced a $4.9 million registered direct offering, selling 1,400,000 shares of common stock at $3.50 per share. Additionally, unregistered warrants to purchase 1,400,000 shares at $4.48 per share were included, totaling gross proceeds of $4.9 million. The warrants will be exercisable after six months and expire five years after the initial exercise date.

Financial Analyst

U.S. Gold Corp's recent registered direct offering presents both opportunities and challenges for the company and its stakeholders. The offering price of $3.50 per share aligns with the company's need to raise capital efficiently, bypassing the expenses associated with underwriters typical in traditional public offerings. This strategic move should be considered within the context of the company's market valuation, liquidity requirements and overall financing strategy. The concurrent private placement of warrants is a commonly used incentive to sweeten the deal for investors, potentially increasing future capital inflow if the warrants are exercised at the $4.48 price.

However, the impact on existing shareholders should not be underestimated. The immediate effect might be a dilution of the share value, as more shares are introduced into the market without an increase in underlying asset value. In the long term, if the capital raised is deployed effectively towards exploration or development, this could enhance the company's profitability and thus, share value. It's essential to assess the company's track record in managing past capital raises and their resulting returns on investment.

Market Research Analyst

The mining sector is highly sensitive to both commodity prices and the cost of exploration and production. U.S. Gold Corp's decision to engage in a registered direct offering needs to be viewed in light of the current gold market environment and the company's operational needs. The fact that the company is raising nearly $5 million suggests a targeted strategy, likely earmarked for specific projects or to strengthen the balance sheet. Investors might view this as a positive signal that the company has concrete plans for growth or stabilization.

Additionally, it's important to note the investor sentiment around issuing warrants. While it can be seen as a vote of confidence from investors willing to bet on the company's future performance, it can also imply expectations of considerable growth necessary to justify exercising the warrants at a higher price. Market response to such financial moves will depend on the broader market sentiment, investor risk appetite and gold price forecasts.

ELKO, Nev., April 15, 2024 /PRNewswire/ -- U.S. Gold Corp. ("U.S. Gold," the "Company," "we," "our" or "us") (NASDAQ: USAU) today announced that it has entered into a securities purchase agreement with certain investors, providing for the purchase and sale of 1,400,000 shares of common stock at a price of $3.50 per share in a registered direct offering and, in a concurrent private placement transaction, unregistered warrants to purchase 1,400,000 shares of our common stock at an exercise price of $4.48 per share, resulting in total gross proceeds of approximately $4.9 million. The warrants will be exercisable six months following the issuance and will expire five years following the initial exercise date. The closing of the sale of the offered securities is expected to take place on or about April 19, 2024, subject to the satisfaction of customary closing conditions.

The shares of common stock (but not the shares of common stock underlying such warrants) are being offered and sold by the Company in a registered direct offering pursuant to a "shelf" registration statement on Form S-3 (File No. 333-262415), including an accompanying prospectus, previously filed, and declared effective by the United States Securities and Exchange Commission ("SEC") on May 12, 2022. The offering of common stock will be made only by means of a prospectus, including a prospectus supplement, that forms a part of the registration statement. A final prospectus supplement and accompanying prospectus relating to the registered direct offering will be filed with the SEC and will be available on the SEC's website located at www.sec.gov.

The warrants are being offered and sold by the Company in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the "Securities Act"), and/or Regulation D promulgated thereunder and, along with the shares of common stock underlying the warrants, have not been registered under the Securities Act, or applicable state securities laws. Accordingly, the warrants and underlying shares of common stock 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 a 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 U.S. Gold Corp.

U.S. Gold Corp. is a publicly traded, U.S. focused gold and copper exploration and development company. U.S. Gold Corp. has a portfolio of exploration properties. Our CK Gold Project is located in Southeast Wyoming and has a Preliminary Feasibility Study technical report, which was completed by Gustavson Associates, LLC. Our Keystone exploration property is on the Cortez Trend in Nevada. Our Challis Gold Project is located in Idaho. For more information about U.S. Gold Corp., please https://www.usgoldcorp.gold/.

Forward-Looking Statements

Certain statements in this press release are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words such as "anticipate," "believe," "forecast," "estimated," and "intend," among others. These forward-looking statements are based on U.S. Gold Corp.'s current expectations, and actual results could differ materially from such statements. There are a number of factors that could cause actual events to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks arising from: market and other conditions; the satisfaction of customary closing conditions related to the registered direct offering and the concurrent private placement transaction, the prevailing market conditions for metal prices and mining industry cost inputs, environmental and regulatory risks, risks faced by junior companies generally engaged in exploration activities, whether U.S. Gold Corp. will be able to raise sufficient capital to develop the CK Gold Project and implement future exploration programs, the success or failure of future drilling programs, and other factors described in the Company's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K filed with the Securities and Exchange Commission, which can be reviewed at www.sec.gov. The Company has based these forward-looking statements on its current expectations and assumptions about future events. While management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory, and other risks, contingencies, and uncertainties, most of which are difficult to predict and many of which are beyond the Company's control. The Company undertakes no duty to correct or update any information contained herein.

For additional information, please contact:

U.S. Gold Corp. Investor Relations:
+1 800 557 4550
ir@usgoldcorp.gold
www.usgoldcorp.gold

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SOURCE U.S. Gold Corp.

FAQ

What is the total amount raised in U.S. Gold Corp.'s registered direct offering?

U.S. Gold Corp. raised approximately $4.9 million in their registered direct offering.

How many shares of common stock were sold in the offering?

1,400,000 shares of common stock were sold at $3.50 per share in the offering.

What is the exercise price of the unregistered warrants included in the offering?

The unregistered warrants included in the offering have an exercise price of $4.48 per share.

When will the warrants be exercisable?

The warrants will be exercisable six months following the issuance.

How long will the warrants be valid for?

The warrants will expire five years following the initial exercise date.