DENVER – authID Inc. (NASDAQ:AUID), a Colorado-based software services company, has made significant changes to its corporate framework and capital structure, as revealed in a recent SEC filing. The company has decreased its authorized shares of common stock and secured additional funding through a registered stock offering.
On Monday, authID entered into a securities purchase agreement with accredited investors, agreeing to issue and sell 1,464,965 shares of common stock. The shares were priced at $7.50 for general investors and $8.16 for company insiders such as directors, officers, employees, or consultants. This transaction included participation from Stephen J. Garchik and one company director.
The offering was made under a shelf registration statement, utilizing a base prospectus dated November 10, 2021, and a prospectus supplement dated Tuesday. Madison Global Partners (NYSE:GLP), LLC served as the placement agent, earning a 7% commission on the gross proceeds and receiving warrants to purchase additional shares.
In conjunction with the offering, authID has amended its Certificate of Incorporation to reduce the number of authorized shares from 250 million to 150 million. This amendment was approved by shareholders during the Annual Meeting of Stockholders held on Tuesday.
During the Annual Meeting, shareholders also ratified the appointment of Cherry Bekaert LLP as the company's independent auditors for the fiscal year ending December 31, 2024, and approved the adoption of the 2024 Equity Incentive Plan, authorizing 395,000 shares for issuance under the plan. Additionally, shareholders voted on executive compensation and the frequency of future advisory votes on the matter.
The company's SEC filing, which provides a comprehensive overview of these corporate actions, ensures transparency and compliance with regulatory requirements. This filing does not constitute an offer to sell the securities mentioned and is solely for informational purposes. The changes to authID's corporate structure reflect its ongoing efforts to optimize its capital and governance strategies.
In other recent news, authID Inc. announced a registered direct offering of its common stock, expecting to raise approximately $11 million before deductions. The company intends to use these funds to expand its sales and operations, especially into new industry sectors where it has recently secured accounts. Madison Global Partners, LLC, is the sole placement agent for this offering.
In addition to this, authID reported a significant increase in its Q1 2024 revenue, reaching $0.16 million, up from $0.04 million in the same period last year. However, the company reported a net loss of $3.06 million, primarily due to increased operating expenses and non-cash charges.
Furthermore, the company aims to achieve a booked Annual Recurring Revenue (bARR) of $9 million in 2024 and anticipates total revenue for the year to be between $1.4 million to $1.6 million. These recent developments reflect authID's strategic positioning in the growing authentication market, with a focus on eliminating authentication fraud and protecting against emerging threats.
InvestingPro Insights
As authID Inc. navigates through strategic changes in its corporate structure, it's important for investors to consider the financial health and market performance of the company. According to InvestingPro data, authID holds a market capitalization of $105.39 million, demonstrating its scale in the software services sector. Despite a challenging financial performance with a negative P/E ratio of -3.66 and an adjusted P/E ratio for the last twelve months as of Q1 2024 at -5.08, authID has shown a strong return over the last year with a price total return of 60.02%. This may highlight the market's optimism about the company's future prospects.
InvestingPro Tips suggest that authID is a niche player in its industry and has more cash than debt on its balance sheet, which could be a sign of financial stability. Additionally, authID has liquid assets that exceed its short-term obligations, providing some comfort in terms of its liquidity position. This is particularly relevant as the company secures additional funding and amends its capital structure. However, the company is not profitable over the last twelve months, and it trades at a high Price / Book multiple of 8.89, which could indicate that its stock is priced optimistically relative to its book value.
For investors looking for a deeper dive into authID's financials and market performance, InvestingPro offers additional insights and analytics. The platform has 9 more InvestingPro Tips available for authID, which can be accessed by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. These insights can help investors make more informed decisions by analyzing the company's valuation, financial health, and market sentiment.
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