DENVER - SOBR Safe, Inc. (NASDAQ:SOBR), a provider of alcohol detection solutions, has finalized a private placement with institutional investors, raising $8.2 million in gross proceeds, the company announced on Wednesday. The funds, which are subject to fees and other offering expenses, are earmarked for general corporate purposes and working capital.
The private placement consisted of issuing 2,024,691 units at $4.05 each, which included one share of common stock or a pre-funded warrant, two Series A warrants, and one Series B warrant. The Series A warrants are exercisable at $3.80 per share and come with a five-year term, while the Series B warrants have an exercise price of $0.00001, with the number of shares to be determined on a future date.
These newly issued securities were not registered under the Securities Act of 1933 but were sold under an exemption, limiting their resale unless they are subsequently registered or qualify for an exemption. In line with a registration rights agreement, SOBR Safe has committed to file registration statements for the resale of the common stock and the stock issuable upon the exercise of the warrants.
Aegis Capital Corp. served as the exclusive placement agent for the transaction, while Lucosky Brookman LLP and Sichenzia Ross Ference Carmel LLP provided legal counsel to SOBR Safe and Aegis Capital Corp, respectively.
This financial move comes as part of SOBR Safe's efforts to expand its reach in providing non-invasive alcohol detection technologies. The company's touch-based detection systems, SOBRcheck and SOBRsure, are aimed at various markets, including behavioral health and judicial sectors, offering a modern alternative to traditional methods that require breath, blood, or urine samples.
The closing of the private placement, as reported in the company's press release statement, signals SOBR Safe's ongoing pursuit of growth and its commitment to addressing alcohol misuse with innovative solutions. The press release also includes forward-looking statements regarding the company's future prospects, which are subject to uncertainties and risks.
In other recent news, SOBR Safe, Inc. has announced a 1-for-110 reverse stock split, aimed at increasing the company's per-share market price to meet Nasdaq's minimum bid price requirement for continued listing. As part of this strategic move, every 110 shares of SOBR Safe's common stock will be combined into one share, with fractional shares rounded up to the nearest whole number.
In related developments, SOBR Safe has launched a campaign to promote its alcohol detection technology, targeting behavioral health, judicial, and consumer sectors. The campaign is projected to reach over 45,000 decision-makers and garner more than 4,000,000 views within a year.
The company has also been granted an extension by the Nasdaq Hearings Panel to meet the Nasdaq's listing requirements by October 23, 2024. This follows SOBR Safe's successful efforts to improve its financial position, having secured approximately $2.8 million in gross proceeds through the exercise of outstanding warrants and debt conversion, which led to the elimination of $2.6 million in debt.
Furthermore, SOBR Safe shareholders have approved the issuance of up to 20,638,326 shares of common stock upon the exercise of a warrant. Lastly, the company has expanded its product portfolio by selling its SOBRcheck and SOBRsure devices to Lake Erie Interlock, Inc., marking an expansion of their alcohol detection technology services in Ohio. These are the recent developments in the company's ongoing efforts to improve its financial health and maintain its Nasdaq listing.
InvestingPro Insights
SOBR Safe's recent $8.2 million private placement comes at a critical time for the company, as revealed by InvestingPro data. With a market capitalization of just $2.17 million, this capital injection significantly bolsters the company's financial position. The funding is particularly crucial given that SOBR Safe is not currently profitable, with a negative operating income of $8.04 million over the last twelve months.
Despite the challenging financial landscape, there are some positive indicators. An InvestingPro Tip highlights that SOBR Safe holds more cash than debt on its balance sheet, which could provide some financial stability as it seeks to expand its alcohol detection technology business. Additionally, analysts anticipate sales growth in the current year, aligning with the company's efforts to penetrate new markets with its SOBRcheck and SOBRsure systems.
However, investors should note the company's stock volatility. Another InvestingPro Tip indicates that the stock generally trades with high price volatility, which is evident in its significant price movements. For instance, while the stock has seen a 7.5% return over the last week, it has experienced a substantial decline of 93.46% over the past year.
For those interested in a deeper analysis, InvestingPro offers 13 additional tips for SOBR Safe, providing a more comprehensive view of the company's financial health and market position.
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