ARMLOGI HOLDING CORP. CLOSES ON $5 MILLION SECOND TRANCHE OF PRE-PAID ADVANCE UNDER A STANDBY EQUITY PURCHASE AGREEMENT

Rhea-AI Summary

Armlogi Holding Corp (Nasdaq: BTOC) has closed on a $5 million second tranche of a Pre-Paid Advance under its Standby Equity Purchase Agreement (SEPA) with YA II PN, , managed by Yorkville Advisors Global. This follows a previous $5 million tranche, as part of a total $21 million Pre-Paid Advance to be received in three tranches. The SEPA, announced on November 25, 2024, allows Armlogi to require YA to purchase up to $50 million of common stock until December 1, 2026, subject to certain conditions. The funding will support the company's growth initiatives in warehousing and logistics services.

Positive

• Secured $5 million in additional funding through second tranche
• Access to total potential funding of $50 million through SEPA until December 2026
• Flexible capital structure for strategic growth initiatives

Negative

• Potential shareholder dilution through future stock issuance
• Convertible promissory notes may lead to additional dilution

Insights

Financial Analyst

The closing of the $5 million second tranche under the SEPA represents a critical financial milestone for Armlogi. This is part of a larger $21 million Pre-Paid Advance structured through convertible promissory notes, with $10 million now secured. The arrangement provides significant operational flexibility through a $50 million equity purchase agreement extending until December 2026.

The financing structure merits careful analysis: While it provides immediate capital access, the convertible nature of the promissory notes suggests potential future dilution for existing shareholders. For a company with a market cap of $183.6 million, the total facility size of $50 million represents approximately 27% of current market value, indicating substantial financing capacity relative to size.

In simpler terms: Think of this like a credit card with a $50 million limit, where the company has already received $10 million upfront. They can use more of this credit line by issuing new shares to the lender. While this gives them ready access to cash, it could decrease the value of existing shares when new ones are created.

Corporate Finance Strategist

The structured financing approach through Yorkville Advisors reveals strategic capital management. The Pre-Paid Advance mechanism, split into three tranches, indicates a measured approach to capital deployment while maintaining flexibility. The SEPA structure allows Armlogi to control the timing and size of future equity issuances, providing a balance between immediate capital needs and long-term dilution management.

Breaking it down for retail investors: This deal is like having a financial safety net that can be accessed as needed, rather than taking all the money at once. The $5 million incremental funding approach suggests disciplined capital management and helps avoid overwhelming the market with new shares all at once. However, investors should monitor the conversion terms and timing of future draws, as these will impact share price dynamics.

WALNUT, CA, Dec. 20, 2024 (GLOBE NEWSWIRE) -- Armlogi Holding Corp. (“Armlogi” or the “Company”) (Nasdaq: BTOC), a U.S.-based warehousing and logistics service provider that offers a comprehensive package of supply-chain solutions related to warehouse management and order fulfillment, today announced that it has closed on the $5 million second tranche of the Pre-Paid Advance (as defined below) pursuant to a Standby Equity Purchase Agreement (the “SEPA”) the Company entered into with YA II PN, Ltd. (“YA”), a fund managed by Yorkville Advisors Global, LP.

As previously announced on November 25, 2024, Armlogi entered into the SEPA, where, pursuant to the terms of the SEPA, Armlogi will have the right, from time to time, until December 1, 2026, to require the Investor to purchase up to $50 million of shares of common stock of the Company, subject to certain limitations and conditions set forth in the SEPA, by delivering written notice to YA (an “Advance Notice”). Pursuant to the SEPA, YA will advance to the Company, subject to the satisfaction of certain conditions as set forth therein, the principal amount of $21 million (the “Pre-Paid Advance”), which will be evidenced by convertible promissory notes (the “Promissory Notes”, together with the “SEPA”, the “Offering”) in three tranches. The Company has now received two tranches of the Pre-Paid Advance of $5 million each.

“This second tranche closing represents another important milestone in strengthening Armlogi’s financial position and advancing our growth initiatives,” said Aidy Chou, Chairman and Chief Executive Officer of Armlogi. “The continued support from Yorkville Advisors through our SEPA arrangement provides us with flexible capital to execute our strategic plans and enhance our comprehensive supply-chain solutions platform. We remain focused on delivering value to our customers and shareholders as we continue to expand our warehousing and logistics capabilities.”

About Armlogi Holding Corp.

Armlogi Holding Corp., based in Walnut, CA, is a fast-growing U.S.-based warehousing and logistics service provider that offers a comprehensive package of supply-chain solutions relating to warehouse management and order fulfillment. The Company caters to cross-border e-commerce merchants looking to establish overseas warehouses in the U.S. market. With ten warehouses covering over three million square feet, the Company offers comprehensive one-stop warehousing and logistics services. The Company’s warehouses are equipped with facilities and technology for handling and storing large and bulky items. For more information, please visit www.armlogi.com.         

Safe Harbor Statement
This press release contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions. The forward-looking events discussed in this press release and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties, and assumptions about us.

Company Contact:
info@armlogi.com

Investor Relations Contact:
Matthew Abenante, IRC
President
Strategic Investor Relations, LLC
Tel: 347-947-2093

Email: matthew@strategic-ir.com

FAQ

How much funding did Armlogi (BTOC) receive in its second SEPA tranche?

Armlogi received $5 million in the second tranche of the Pre-Paid Advance under the Standby Equity Purchase Agreement.

What is the total value of Armlogi's (BTOC) SEPA agreement with Yorkville Advisors?

The SEPA agreement allows Armlogi to require YA to purchase up to $50 million of common stock until December 1, 2026.

How many tranches will Armlogi (BTOC) receive in the Pre-Paid Advance?

Armlogi will receive the $21 million Pre-Paid Advance in three tranches, with two $5 million tranches already received.

When does Armlogi's (BTOC) Standby Equity Purchase Agreement expire?

The SEPA agreement expires on December 1, 2026.