Castellum Announces Pricing of $3.7 Million Public Offering of Common Stock

Rhea-AI Summary

Castellum (NYSE-American: CTM), a cybersecurity and federal government services company, has announced the pricing of its public offering of 4,355,000 shares of common stock at $0.85 per share. The offering is expected to generate gross proceeds of approximately $3.7 million before deducting fees and expenses. The company plans to use the net proceeds for working capital and general corporate purposes.

Maxim Group is serving as the sole placement agent for the offering, which is expected to close around December 30, 2024. The offering is being conducted under a shelf registration statement that became effective on December 12, 2023.

Positive

• Secured $3.7 million in gross proceeds through public offering
• Successfully priced offering at $0.85 per share
• Strengthens working capital position

Negative

• Potential dilution of existing shareholders through issuance of 4,355,000 new shares
• Share offering priced at a likely discount to market price

Insights

Financial Analyst

The $3.7 million public offering at $0.85 per share represents significant dilution for existing shareholders, given Castellum's market cap of $32.5 million. The offering price shows a substantial discount to recent trading levels, which is concerning. The dilutive impact of adding 4,355,000 new shares will likely pressure the stock price in the near term. While the capital raise provides needed working capital, the terms reflect challenging market conditions for small-cap government contractors. The use of a shelf registration and placement agent structure, rather than a traditional underwritten offering, suggests institutional demand. The timing, during the holiday period, may also indicate urgency in securing funding.

The focus on "working capital and general corporate purposes" rather than specific growth initiatives raises questions about the company's cash position and burn rate. Small government contractors often face working capital challenges due to long payment cycles on federal contracts. However, the dilutive financing could provide necessary runway for contract execution and business development efforts in the cybersecurity and electronic warfare sectors, which remain priority areas for federal spending.

Legal Expert

The offering's structure and documentation demonstrate full regulatory compliance, with proper S-3 shelf registration and prospectus filings. The use of Maxim Group as placement agent on a best-efforts basis provides necessary intermediary oversight while limiting underwriting risk. The explicit disclaimers regarding state securities laws and offering restrictions properly address regulatory requirements.

The timing of the SEC filings, with the shelf registration becoming effective December 12 and the offering announcement following shortly after, suggests a coordinated capital markets strategy. The detailed disclosure requirements for the final prospectus supplement will provide investors comprehensive information about the offering terms and company outlook. The reasonable best-efforts placement structure gives the company flexibility while potentially limiting execution risk compared to a firm commitment underwriting.

VIENNA, Va., Dec. 27, 2024 (GLOBE NEWSWIRE) -- Castellum, Inc. (the “Company” and “Castellum”) (NYSE-American: CTM), a cybersecurity, electronic warfare, and software services company focused on the federal government, today announced the pricing of its previously announced public offering of 4,355,000 shares of its common stock at a public offering price of $0.85 per share. Gross proceeds from the offering are expected to be approximately $3.7 million before deducting placement agent fees and estimated offering expenses. Castellum intends to use the net proceeds of the offering for working capital and general corporate purposes.

Maxim Group LLC is acting as the sole placement agent, on a reasonable best-efforts basis for the offering.

The closing of the offering is expected to occur on or about December 30, 2024, subject to satisfaction of customary closing conditions.

A shelf registration statement on Form S-3 (File No. 333-275840) relating to the securities being offered was previously filed with the U.S. Securities and Exchange Commission (the “SEC”) and became effective on December 12, 2023. The shares are being offered only by means of a prospectus. A preliminary prospectus supplement and the accompanying prospectus relating to and describing the terms of the public offering have been filed with the SEC. A final prospectus supplement and an accompanying prospectus relating to the offering will be filed with the SEC and will be available on the SEC’s website at www.sec.gov. When available, copies of the final prospectus supplement and accompanying prospectus relating to the public offering may be obtained by contacting Maxim Group LLC, at 300 Park Avenue, 16th Floor, New York, NY 10022, Attention: Prospectus Department, or by telephone at (212) 895-3745 or by email at syndicate@maximgrp.com. Before you invest, you should read the preliminary prospectus supplement and accompanying prospectus, together with the information incorporated by reference therein, for more complete information about the Company and the proposed offering. The final terms of the offering will be disclosed in a final prospectus supplement to be filed with the SEC.

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

About Castellum, Inc.

Castellum, Inc. (NYSE-American: CTM) is a defense-oriented technology company that is executing strategic acquisitions in the cybersecurity, MBSE, and information warfare areas - http://castellumus.com/.

Forward-Looking Statements:

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain, based on current expectations and assumptions concerning future events or future performance of the company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. Words such as “will,” “would,” “believe,” and “expects,” and similar language or phrasing are indicative of forward-looking statements. These forward-looking statements are subject to risks, uncertainties, and other factors, many of which are outside of the Company’s control, that could cause actual results to differ (sometimes materially) from the results expressed or implied in the forward-looking statements, including, among others: the Company’s ability to close the described debt financing; its ability to effectively integrate and grow its acquired companies; its ability to identify additional acquisition targets and close additional acquisitions; the impact on the Company’s revenue due to a delay in the U.S. Congress approving a federal budget; and the Company’s ability to maintain the listing of its common stock on the NYSE American LLC. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in Item 1A. “Risk Factors” section of the Company’s recently filed Form 10-Q, Item 1A. "Risk Factors” in the Company’s most recent Form 10-K, and other filings with the Securities and Exchange Commission which can be viewed at www.sec.gov. These risks and uncertainties, or not closing the described potential debt financing in this press release, could cause the Company's actual results to differ materially from those indicated in the forward-looking statements. Except to the extent required by law, we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, a change in events, conditions, circumstances or assumptions underlying such statements, or otherwise.

Contact:

Glen Ives
President and Chief Executive Officer
Phone: (703) 752-6157
Contact: Info@castellumus.com

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/9ca57eca-ec2f-454f-a734-09118cfbe0e7

FAQ

How much money is Castellum (CTM) raising in its December 2024 public offering?

Castellum is raising approximately $3.7 million in gross proceeds through its public offering of common stock.

What is the price per share for Castellum's (CTM) December 2024 public offering?

The public offering is priced at $0.85 per share.

How many shares is Castellum (CTM) offering in its December 2024 public offering?

Castellum is offering 4,355,000 shares of common stock.

What will Castellum (CTM) use the proceeds from its December 2024 offering for?

Castellum intends to use the net proceeds for working capital and general corporate purposes.

When is the expected closing date for Castellum's (CTM) December 2024 public offering?

The offering is expected to close on or about December 30, 2024.