TYSONS CORNER, Va. and PETAH TIKVA, Israel - Cellebrite DI Ltd. (NASDAQ:CLBT), a provider of digital investigative solutions, has initiated the redemption of all outstanding warrants for purchasing its ordinary shares at a price of $0.10 per warrant. The redemption covers both public and private placement warrants, with a deadline set for 5:00 p.m. New York City time on September 16, 2024.
The company's decision to redeem these warrants follows the terms of the Warrant Agreement dated August 30, 2021, which was established in connection with Cellebrite's business combination with TWC Tech Holdings II Corp. The redemption is applicable to warrants that were initially issued by TWC and later converted into Cellebrite warrants as part of the business combination.
Warrant holders have the option to exercise their warrants for cash at an exercise price of $11.50 per ordinary share or to opt for a cashless surrender. In the latter case, they will receive a number of ordinary shares based on a formula outlined in the Warrant Agreement, which takes into account the volume-weighted average price of the ordinary shares for the ten trading days following the delivery of the redemption notice.
Cellebrite has secured a ruling from the Israeli Tax Authorities exempting the company from withholding tax obligations for qualified holders who choose the cashless exercise option, provided certain conditions are met. However, warrant holders who exercise for cash and those who are not qualified holders will be subject to Israeli withholding tax unless they meet specific requirements detailed in the Notice of Redemption.
The company will notify holders of the Redemption Fair Market Value on August 30, 2024. It's important to note that the number of ordinary shares issued upon a cashless surrender of warrants will not exceed 0.361 ordinary shares per warrant.
Unexercised warrants after the redemption deadline will become void and holders will only be entitled to the redemption price, subject to any applicable tax withholdings. Cellebrite's ordinary shares and public warrants are traded on the Nasdaq Global Select Market under the symbols "CLBT" and "CLBTW," respectively, with the last trading day for the public warrants set to be September 13, 2024, one day prior to the redemption date.
Cellebrite has made no recommendations to warrant holders regarding the exercise of their warrants. This press release is based on a press release statement and is intended for informational purposes only. Additional details can be found in a Form 6-K that will be filed with the U.S. Securities and Exchange Commission.
In other recent news, Cellebrite, the digital investigative solutions provider, has reported a 27% increase in annual recurring revenue to $331.8 million and a 26% rise in total revenue to $89.6 million. The company expects continued growth in the next quarter, with revenues estimated between $90 million and $94 million. In strategic moves, Cellebrite expanded its reach by acquiring cybersecurity firm CyTech and appointed Sigalit Shavit as its first Chief Information Officer. The company also announced the addition of Troy Richardson to its board of directors and the creation of Cellebrite Federal Solutions to cater to the U.S. federal government's needs. On the analyst front, JPMorgan raised its stock target for Cellebrite to $15.00, maintaining an Overweight rating, while Lake Street Capital Markets adjusted its price target for the company, raising it to $13.50 and reiterating a Buy rating. These are the latest developments for the company.
InvestingPro Insights
As Cellebrite DI Ltd. (NASDAQ:CLBT) approaches its warrant redemption deadline, investors are closely monitoring the company's financial health and market performance. According to InvestingPro, Cellebrite holds more cash than debt on its balance sheet, which is a positive sign of the company's liquidity and financial flexibility. This is particularly relevant as the company navigates through the warrant redemption process, ensuring it has the necessary resources to manage any potential cash outflows.
InvestingPro data shows that Cellebrite has a Market Cap of approximately 2.9 billion USD, reflecting its valuation in the market. The Gross Profit Margin for the last twelve months as of Q1 2024 stands at an impressive 87.79%, indicating strong profitability in its core operations. Moreover, the company has experienced a significant Revenue Growth of 16.53% over the last twelve months, which may instill confidence in investors looking at the company's growth trajectory.
Investors should note that Cellebrite's stock is trading near its 52-week high, with the Price % of 52 Week High at 98.8%. This could suggest market optimism about the company's future prospects or reflect the company's recent performance milestones. For those interested in exploring further insights and metrics, InvestingPro lists an additional 13 InvestingPro Tips, which could provide more in-depth analysis and guidance on the company's investment potential.
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