CIMG Inc. (NASDAQ:IMG), a Nevada-based retail company with a market capitalization of $5.85 million and whose stock has declined 71% year-to-date, announced on Monday that it has entered into a material definitive agreement with non-U.S. investors for a private placement of convertible promissory notes and warrants totaling $10 million.
According to InvestingPro analysis, the company's financial health score currently stands at 1.46, indicating significant challenges ahead. The transaction involves the issuance of convertible notes bearing a 7% annual interest rate and maturing one year from the issue date, accompanied by warrants to purchase up to 19,230,767 shares of the company's common stock.
With analysts projecting 97% revenue growth for the current fiscal year, this financing could prove crucial for the company's expansion plans. For deeper insights into IMG's growth prospects and 15+ additional key metrics, consider subscribing to InvestingPro.
The conversion of the notes and exercise of the warrants are contingent upon CIMG Inc. obtaining shareholder approval for the issuance of shares underlying these financial instruments. Once approval is secured, the notes can be converted into shares of common stock at a conversion price of $0.52 per share.
In conjunction with the agreement, CIMG Inc. also entered into a Registration Rights Agreement with the investors, committing to file a Registration Statement with the SEC for the resale of all registrable securities, which includes shares arising from the conversion of the notes and exercise of the warrants.
This filing is expected to follow the submission of the company's Form 10-K for the fiscal year ended September 30, 2024, or within five business days post-shareholder approval of the transactions, whichever occurs later.
The closing of the sale and purchase of the notes and warrants is set to occur on a date agreed upon by CIMG Inc. and the investors, with the final closing scheduled no later than January 14, 2025, unless the company decides to extend or terminate the offering period prior to this date.
This financing move, executed through instruments that bypass the need for immediate cash outlays, provides CIMG Inc. with additional capital to potentially expand its operations or invest in new projects. With negative EBITDA of $7.99 million and a concerning cash burn rate, this capital injection appears timely for the company's sustainability. The transaction details were sourced from a press release statement and the company's SEC filing.
In other recent news, CIMG Inc., formerly known as NuZee Inc., has been involved in a series of significant developments. The company has settled a lawsuit with a former employee without admitting wrongdoing, thus resolving a dispute that had moved to arbitration. On the financial front, CIMG Inc. has raised $2 million through an equity sale to non-U.S. investors and seen warrant holders exercise a cashless option to acquire 55,973 shares of common stock.
In a strategic move to boost its market presence, the company has entered a one-year endorsement agreement with five renowned sports figures to promote its Macanuoli beverage. This marks the product's inaugural marketing campaign.
Additionally, the company has undergone a corporate identity change, now operating under the name CIMG Inc. Changes in the executive ranks have also occurred, with the appointment of Zhanzhan Shi as the new Acting Chief Financial Officer and Jianshuang Wang as the Chairman of the Board of Directors and Co-Chief Executive Officer. These developments are a testament to CIMG Inc.'s commitment to strategic growth and strong financial leadership.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.