Better Choice Company Inc. Announces Closing of Public Offering - Updated

Rhea-AI Summary

Better Choice Company Inc. (NYSE American: BTTR) has closed its public offering of 639,000 common stock shares and Pre-funded warrants for 1,028,000 shares. The offering was priced at $3.00 per share, raising approximately $5 million in gross proceeds. ThinkEquity acted as the sole book-running manager. The company plans to use the net proceeds for general corporate purposes, including working capital, sales and marketing, and operating expenses. Better Choice has also granted underwriters a 45-day option to purchase up to an additional 100,000 shares or Pre-Funded Warrants at the public offering price less the underwriting discount.

Positive

• Successful closing of public offering, raising approximately $5 million in gross proceeds
• Funds to be used for general corporate purposes, potentially strengthening the company's financial position
• Additional 45-day option granted to underwriters for up to 100,000 more shares or warrants

Negative

• Potential dilution of existing shareholders' ownership due to the issuance of new shares
• The offering price of $3.00 per share may be lower than the current market price, potentially impacting stock value

Insights

Financial Analyst

Better Choice Company's recent public offering marks a significant capital raise, but it comes with notable implications for investors. The company successfully raised $5 million in gross proceeds, which could provide a much-needed cash injection for operations. However, this comes at the cost of dilution for existing shareholders.

The offering structure is intriguing, combining 639,000 common shares with Pre-Funded Warrants for an additional 1,028,000 shares. This approach suggests a strategy to attract investors who may be hesitant about immediate full equity exposure. The $3.00 per share pricing appears to be at a discount to recent trading levels, which is typical for such offerings but may put downward pressure on the stock in the short term.

The use of proceeds for "general corporate purposes" is quite broad and doesn't provide much insight into specific strategic initiatives. This lack of clarity could be a concern for investors looking for a more defined growth strategy. The involvement of ThinkEquity as the sole book-runner suggests a relatively small-scale offering, which aligns with the company's current market position.

Investors should closely monitor how effectively management deploys this capital, particularly in areas like sales and marketing, which could drive future revenue growth in the competitive pet health and wellness sector. The 45-day option for underwriters to purchase additional shares adds an element of uncertainty and potential further dilution.

Overall, while this offering provides Better Choice with additional financial flexibility, it also raises questions about the company's ability to fund operations through existing revenue streams and may signal challenges ahead.

Market Research Analyst

The pet health and wellness market has been experiencing robust growth and Better Choice Company's move to raise capital through this public offering could be seen as an attempt to capitalize on this trend. However, the relatively modest size of the offering - $5 million in gross proceeds - raises questions about the scale of the company's ambitions and its competitive positioning.

The pet industry has seen increased consumer spending, particularly in premium and health-focused products. Better Choice's focus on this niche aligns with market trends, but the company faces stiff competition from both established players and well-funded startups. The allocation of funds to sales and marketing could be important in building brand awareness and market share.

Interestingly, the use of Pre-Funded Warrants in this offering structure suggests a strategy to appeal to a broader range of investors, potentially including those who see long-term potential but are cautious about current market conditions. This could indicate a level of investor uncertainty about the company's near-term prospects.

The lack of specificity in the use of proceeds is noteworthy. In a market where consumers are increasingly demanding transparency and clear value propositions, Better Choice may need to articulate a more defined strategy to stand out. The general nature of the stated use of funds could be interpreted as a lack of focused growth initiatives, which may concern some investors.

As the pet health and wellness market continues to evolve, Better Choice will need to demonstrate how this capital infusion translates into tangible market advantages and financial performance improvements to justify investor confidence.

Tampa, Florida, July 31, 2024 (GLOBE NEWSWIRE) -- Better Choice Company Inc. (NYSE American: BTTR) (the “Company” or (“Better Choice”), a pet health and wellness company, today announced the closing of its public offering of 639,000 shares of its common stock and Pre-funded warrants to purchase 1,028,000 shares of its common stock (“Pre-Funded Warrants”). Each share of common stock and Pre-Funded Warrant was sold at a public offering price of $3.00 per share (inclusive of the Pre-Funded Warrant exercise price), for gross proceeds of approximately $5 million, before deducting underwriting discounts and offering expenses. In addition, Better Choice has granted the underwriters a 45-day option to purchase up to an additional 100,000 shares of common stock and/or Pre-Funded Warrants at the public offering price less the underwriting discount.

The Company intends to use the net proceeds from this offering for general corporate purposes, including working capital, sales and marketing, and operating expenses.

ThinkEquity acted as sole book-running manager for the offering.

A registration statement on Form S-1 (File No. 333-280714) relating to the offering was filed with the Securities and Exchange Commission (“SEC”) and became effective on July 29, 2024. The offering was made only by means of a prospectus. The final prospectus relating to the offering was filed with the SEC and is available on the SEC's website at http://www.sec.gov. Copies of the final prospectus may also be obtained from ThinkEquity, 17 State Street, 41^st Floor, New York, New York 10004.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Better Choice Company Inc.

Better Choice Company Inc. is a rapidly growing pet health and wellness company committed to leading the industry shift toward pet products and services that help dogs and cats live healthier, happier and longer lives. We take an alternative, nutrition-based approach to pet health relative to conventional dog and cat food offerings and position our portfolio of brands to benefit from the mainstream trends of growing pet humanization and consumer focus on health and wellness. We have a demonstrated, multi-decade track record of success selling trusted pet health and wellness products and leverage our established digital footprint to provide pet parents with the knowledge to make informed decisions about their pet’s health. We sell the majority of our dog food, cat food and treats under the Halo brand, which is focused, respectively, on providing sustainably sourced kibble and canned food derived from real whole meat, and minimally processed raw-diet dog food and treats. For more information, please visit https://www.betterchoicecompany.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “may,” “estimate,” “continue,” “anticipate,” “intend,” “should,” “plan,” “could,” “target,” “potential,” “is likely,” “will,” “expect” and similar expressions, as they relate to us, are intended to identify forward-looking statements. The Company has based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Some or all of the results anticipated by these forward-looking statements may not be achieved. Further information on the Company’s risk factors is contained in our filings with the SEC. Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.

Company Contact:
Better Choice Company, Inc.
Kent Cunningham, CEO

Investor Contact:
KCSA Strategic Communications
Valter Pinto, Managing Director
T: 212-896-1254
Valter@KCSA.com

FAQ

How much did Better Choice Company (BTTR) raise in its recent public offering?

Better Choice Company (BTTR) raised approximately $5 million in gross proceeds from its recent public offering of common stock and Pre-funded warrants.

What was the price per share in Better Choice Company's (BTTR) public offering?

The public offering price was $3.00 per share of common stock and Pre-Funded Warrant (inclusive of the Pre-Funded Warrant exercise price).

How does Better Choice Company (BTTR) plan to use the proceeds from its public offering?

Better Choice Company (BTTR) intends to use the net proceeds for general corporate purposes, including working capital, sales and marketing, and operating expenses.

Who was the book-running manager for Better Choice Company's (BTTR) public offering?

ThinkEquity acted as the sole book-running manager for Better Choice Company's (BTTR) public offering.