Cemtrex, Inc. Announces Pricing of $10 Million Upsized Underwritten Public Offering

Rhea-AI Summary

Cemtrex, Inc. announced the pricing of an upsized underwritten public offering, expecting gross proceeds of approximately $10 million. The Company plans to use the net proceeds for operations, marketing efforts, investment in existing initiatives, partial debt repayment, and potential acquisition of complementary businesses. The offering consists of Common Units and Pre-Funded Units, with Aegis Capital Corp. as the sole book-running manager. The closing is expected on May 3, 2024.

Insights

Financial Analyst

Cemtrex's public offering represents a significant infusion of $10 million into the company, which indicates a strategic move to bolster its operations and market position. The upsizing from $9 million suggests robust investor interest or a higher than anticipated demand for the company's securities. For investors, the critical element here is the intended use of proceeds which includes operational funding, marketing and potentially debt repayment. The inclusion of acquiring complementary businesses or technologies highlights a potential expansion strategy. However, investors should be wary of dilution, as the issue of additional shares typically leads to existing shares losing value. The exercise price of $0.85 for both Series A and B Warrants is another focal point, as it sets a future benchmark for the company's performance aspirations.

Market Research Analyst

Cemtrex's decision to invest in marketing and existing business initiatives suggests a push to capture larger market share or enter new markets. Moreover, the potential investment in complementary businesses or technologies may provide the company with a competitive edge or diversify its revenue streams. For retail investors, evaluating such public offerings involves a close look at the company's market positioning, the growth prospects of its industry and the historical performance of similar investments. The timing and pricing of the offering can also influence the company's stock volatility in the short term.

Legal Expert

The legal framework surrounding this public offering is pivotal. With Aegis Capital Corp. as the book-running manager and legal counsel engaged, the offering's compliance with SEC regulations is assured. The 45-day over-allotment option granted to Aegis Capital Corp. is a common hedge against market fluctuations. Investors should review the Final Prospectus for legal contingencies and rights associated with the Warrants to fully understand their investment. It's important to recognize that such offerings are subject to regulatory scrutiny and any deviation from legal protocols can have dire consequences for the company and its investors.

Hauppauge, NY, May 01, 2024 (GLOBE NEWSWIRE) --  – Cemtrex, Inc. (Nasdaq: CETX) (the “Company”), an advanced security technology and industrial services company, today announced the pricing of a firm commitment underwritten public offering with gross proceeds to the Company expected to be approximately $10 million, before deducting underwriting discounts and other estimated expenses payable by the Company. The offering was upsized from $9 million. The base offering consists of 11,764,705 Common Units or Pre-Funded Units, each consisting of one share of common stock (“Common Share”) or one Pre-Funded Warrant, one Series A Warrant to purchase one Common Share at an exercise price of $0.85 per share or pursuant to an alternative cashless exercise option, which warrant will expire two-and-a-half years from the closing date of this offering (the “Series A Warrant”) and one Series B Warrant to purchase one Common Share at an exercise price of $0.85 per share, which warrant will expire on the five-year anniversary of the closing date of this offering (the “Series B Warrants” and together with the Series A Warrants, the “Warrants”). The purchase price of each Common Unit is $0.85, and the purchase price of each Pre-Funded Unit is $0.849 (which is equal to the public offering price per Common Unit minus $0.001). The Pre-Funded Warrants will be immediately exercisable and may be exercised at any time until all the Pre-Funded Warrants are exercised in full.

The Company intends to use the net proceeds from this offering to conduct operations, increase marketing efforts, investment in existing business initiatives and products, and for the partial repayment of indebtedness. The Company may also use a portion of the net proceeds of this offering to acquire or invest in complementary businesses, products, or technologies, or to obtain the right to use such complementary technologies.

In addition, the Company has granted Aegis Capital Corp. a 45-day option to purchase additional Common Shares and/or Warrants, representing up to 15% of the number of securities sold in the offering, solely to cover over-allotments, if any.

The closing of the offering is expected to occur on May 3, 2024, subject to customary closing conditions.

Aegis Capital Corp. is acting as the sole book-running manager for the Offering. The Doney Law Firm is serving as counsel to the Company for the offering. Kaufman & Canoles, P.C. is serving as counsel to Aegis Capital Corp. for the offering.

The offering was made pursuant to an effective registration statement on Form S-1 (No. 333-276556) previously filed with the U.S. Securities and Exchange Commission (the “SEC”) and declared effective by the SEC on April 30, 2024. A preliminary prospectus (the “Preliminary Prospectus”) describing the terms of the proposed offering was filed with the SEC and is available on the SEC’s website located at www.sec.gov. A final prospectus (the “Final Prospectus”) relating to and describing the terms of the offering will be filed with the SEC and will be available on the SEC’s website located at www.sec.gov. Electronic copies of the Preliminary Prospectus and Final Prospectus, when available, may be obtained by contacting Aegis Capital Corp., Attention: Syndicate Department, 1345 Avenue of the Americas, 27th floor, New York, NY 10105, by email at syndicate@aegiscap.com, or by telephone at (212) 813-1010. Before investing in this offering, interested parties should read in their entirety the registration statement and the Preliminary Prospectus and the other documents that the Company has filed with the SEC that are incorporated by reference in such registration statement and the Preliminary Prospectus, which provide more information about the Company and the offering.

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

About Cemtrex

Cemtrex Inc. (CETX) is a company that owns two operating subsidiaries: Vicon Industries, Inc. (“Vicon”) and Advanced Industrial Services, Inc. (“AIS”).

Vicon is a global leader in advanced security and surveillance technology to safeguard businesses, schools, municipalities, hospitals and cities. Since 1967, Vicon has delivered mission-critical security surveillance systems, specializing in engineering complete security solutions that simplify deployment, operation and ongoing maintenance. Vicon provides security solutions for some of the largest municipalities and businesses in the U.S. and around the world, offering a wide range of cutting-edge and compliant security technologies, from AI-driven video analytics to fully integrated access control solutions. For more information visit www.vicon-security.com.

AIS is a premier provider of industrial contracting services including millwrighting, rigging, piping, electrical, welding. AIS installs high precision equipment in a wide variety of industrial markets including automotive, printing & graphics, industrial automation, packaging, and chemicals. AIS owns and operates a modern fleet of custom-designed specialty equipment to assure safe and quick installation of production equipment. AIS staff participates in recurring instructional training, provided to ensure that the most current industry methods are being utilized to provide an efficient and safe working environment. For more information visit www.ais-york.com.

For more information visit www.cemtrex.com.

Forward-Looking Statements

The information contained herein may contain “forward-looking statements.” Forward-looking statements reflect the current view about future events. When used in this press release, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions, as they relate to the Company or its management, identify forward-looking statements. Such statements include, but are not limited to, statements contained in this press release relating to the closing of the offering. Forward-looking statements are based on the Company’s current expectations and assumptions regarding its business, the economy, and other future conditions. In this press release, such forward-looking statements include statements regarding the anticipated use of proceeds from the offering. Because forward–looking statements relate to the future, they are subject to inherent uncertainties, risks, and changes in circumstances that are difficult to predict, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Preliminary Prospectus. The Company’s actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees of assurance of future performance. Readers are cautioned against relying on any of these forward-looking statements. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible for the Company to predict all of them. The Company cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, including the securities laws of the United States, the Company does not intend to update any of the forward-looking statements. References and links to websites have been provided as a convenience, and the information contained on such websites is not incorporated by reference into this press release.

FAQ

What is the purpose of Cemtrex, Inc.'s public offering?

Cemtrex, Inc. announced the public offering to raise funds for operations, marketing, investments, debt repayment, and potential acquisitions of complementary businesses.

How much is the gross proceeds expected from the public offering?

The gross proceeds from the public offering are anticipated to be around $10 million.

Who is the sole book-running manager for the offering?

Aegis Capital Corp. is acting as the sole book-running manager for the offering.

When is the closing of the offering expected to occur?

The closing of the offering is anticipated to happen on May 3, 2024.

Where can interested parties obtain the Final Prospectus?

Interested parties can obtain the Final Prospectus by contacting Aegis Capital Corp. via email or telephone, or by visiting the SEC's website.