CENTENNIAL, CO - Nuburu, Inc. (NYSE American: BURU), a manufacturer of miscellaneous electrical machinery, announced today a comprehensive financial strategy following its entry into several agreements with Liqueous LP on October 1, 2024, aimed at bolstering the company's short-term and long-term capital.
The strategic financing framework, as outlined in the Master Transaction Terms Agreement, includes an initial $3 million capital infusion from the Investor at the current market price. Additionally, Nuburu has arranged for weekly capital injections of $1.25 million at market price until an extra $10 million is invested. This move is part of a broader financial strategy that also involves the conversion of certain outstanding notes into common stock at twice their value and the adjustment of the current market price for pre-funded warrants held by the Investor.
Furthermore, the companies have agreed upon a $50 million equity line of credit (ELOC), which allows Nuburu to sell common stock to the Investor periodically, subject to certain conditions including stockholder consent for share issuance beyond 19.99% of the company's common stock as of the ELOC date, and registration of the shares for resale.
The initial investments under this framework were executed through two Securities Purchase Agreements. The first agreement saw the Investor acquiring pre-funded warrants for approximately 6.8 million shares of common stock at an effective price of $0.438 per share, totaling around $3 million. The second agreement sets forth the terms for the subsequent weekly investments of $1.25 million.
In connection with the ELOC, a Common Stock Purchase Agreement was signed, which includes a provision for a $2.5 million advance to Nuburu in the form of a convertible note, bearing an 8% annual interest rate, upon the filing of the relevant registration statement.
To facilitate the resale of common stock issued under these financing arrangements, a registration rights agreement was also established. The agreement stipulates that the company is committed to registering the common stock for resale, while also ensuring that the Investor does not exceed a 4.99% ownership threshold at any given time, and that issuances do not surpass 19.9% of the company's outstanding common stock without prior stockholder approval as per NYSE American rules.
The shares of common stock to be offered and sold have not been registered under the Securities Act, relying on the exemption provided in Section 4(a)(2).
This strategic financing initiative is based on a press release statement and aims to provide Nuburu, Inc. with the necessary capital to support its ongoing operations and future growth.
In other recent news, NUBURU, Inc. has announced a 1-for-40 reverse stock split, a strategic move aimed at increasing its stock trading price and attracting larger investors. However, the implementation of this split has been delayed due to a backlog at the Financial Industry Regulatory Authority (FINRA). NUBURU has also launched the AO-650 laser and the BLTM series, with a focus on manufacturing and shipping the BL250 model in the second half of 2024. The company secured an $850,000 Phase II contract from NASA to enhance its high-power industrial blue laser technology for lunar and Martian missions. Furthermore, NUBURU has received a $3 million investment in its common stock from strategic investors, led by Alessandro Zamboni, Chairman of the AvantGarde Group S.p.A. These are all recent developments, highlighting the company's ongoing efforts to expand operations and increase market presence.
InvestingPro Insights
Nuburu's recent financial strategy announcement comes at a critical time for the company, as revealed by InvestingPro data. With a market capitalization of just $1.66 million, Nuburu is operating in a challenging financial environment. The company's revenue for the last twelve months as of Q2 2024 stood at a modest $0.7 million, with a staggering revenue decline of 75.09% over the same period.
InvestingPro Tips highlight several concerns for investors. The company is operating with a significant debt burden and may have trouble making interest payments. Additionally, Nuburu is quickly burning through cash, which explains the urgency of their recent financing agreements with Liqueous LP.
The stock's performance has been particularly troubling, with InvestingPro data showing a 96.11% price decline over the past year. This aligns with the InvestingPro Tip indicating that the stock has taken a big hit over the last six months, further emphasizing the company's precarious financial position.
These insights from InvestingPro provide crucial context to Nuburu's recent financing strategy, underscoring the company's need for capital infusion to address its financial challenges. Investors considering Nuburu should be aware that InvestingPro offers 18 additional tips for this stock, providing a more comprehensive analysis of the company's financial health and market position.
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