Gaia Announces Pricing of Underwritten Offering of $8.0 Million of Common Stock

Rhea-AI Summary

Gaia (NASDAQ: GAIA) has announced the pricing of an underwritten public offering of 1,600,000 shares of its Class A common stock at $5.00 per share, expecting to raise gross proceeds of approximately $8.0 million. The offering is set to close on February 7, 2025, with underwriters having a 45-day option to purchase up to 240,000 additional shares.

The company plans to use the net proceeds for enhancing its AI capabilities, developing the Gaia Community project, and general corporate purposes. Roth Capital Partners and Lake Street Capital Markets are serving as joint book-running managers for the offering.

Positive

• Secured $8.0 million in gross proceeds through stock offering
• Investment in AI capabilities and community development project
• Successful pricing of shares at $5.00 per share

Negative

• Dilution of existing shareholders' value through new share issuance
• Additional 240,000 shares may be issued, causing further dilution

Insights

Financial Analyst

This $8.0 million underwritten public offering represents a significant capital raising event for Gaia, though the pricing at $5.00 per share, below the current market price, warrants careful analysis. The offering structure, involving 1.6M shares with an additional 240K share option for underwriters, will result in approximately 12% dilution for existing shareholders, assuming full exercise of the underwriter's option.

The strategic allocation of proceeds towards AI capabilities and the Gaia Community project signals a decisive pivot towards technological advancement and community engagement. This transformation could potentially create new revenue streams and enhance user engagement, important for subscription-based content platforms. The involvement of established underwriters Roth Capital Partners and Lake Street Capital Markets adds credibility to the offering.

However, the timing and pricing strategy suggest some urgency in raising capital. The discount to market price, while typical for secondary offerings, indicates potential near-term pressure on the stock. The moderate size of the raise ($8.0 million) implies a focused approach to capital deployment, though investors should monitor the burn rate and execution of the stated initiatives.

The shelf registration and structured approach to the offering, including the 45-day option for additional shares, provides flexibility while maintaining market stability. This measured approach to capital raising, combined with the specific focus on AI and community development, suggests a well-planned strategy rather than a mere funding stopgap.

BOULDER, Colo., Feb. 06, 2025 (GLOBE NEWSWIRE) -- Gaia, Inc. (NASDAQ: GAIA) (“Gaia” or the “Company”), a conscious media and community company, announced today that it has priced its underwritten public offering of 1,600,000 shares of its Class A common stock at a public offering price of $5.00 per share.

The Company expects the gross proceeds from the offering to be approximately $8.0 million, before deducting the underwriting discounts and commissions and other estimated offering expenses payable by the Company.

The Company has granted the underwriters in the offering a 45-day option to purchase up to 240,000 additional shares of Class A common stock. The Company expects to close the offering, subject to market and other conditions, on February 7, 2025.

The Company intends to use the net proceeds from the offering primarily for, but not limited to, enhancements of our AI (Artificial Intelligence) capabilities, the development of the Gaia Community project, and for general corporate purposes.

Roth Capital Partners and Lake Street Capital Markets are acting as joint book-running managers for this offering.

A shelf registration statement on Form S-3 (File No. 333-283767) relating to the shares of Class A common stock to be issued in the proposed offering was previously filed with the Securities and Exchange Commission (the “SEC”) and is currently effective. A preliminary prospectus supplement and accompanying prospectus describing the terms of the proposed offering has been filed with the SEC. The shares of Class A common stock may be offered only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. Copies of the final prospectus supplement and the accompanying prospectus relating to the securities being offered may be obtained, when available, from Roth Capital Partners, LLC, 888 San Clemente, Suite 400, Newport Beach, CA 92660, by telephone at (800) 678-9147 or by email at rothecm@roth.com. Electronic copies of the final prospectus supplement and accompanying prospectus will also be available on the SEC’s website at www.sec.gov.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the shares of Class A common stock, nor will there be any sale of the shares of Class A common stock in any state or other jurisdiction in which such offer, solicitation or sale is not permitted.

About Gaia 

Gaia is a member-supported global video streaming service and community that produces and curates conscious media through four primary channels—Seeking Truth, Transformation, Alternative Healing and Yoga—in four languages (English, Spanish, French and German) to its members in 185 countries. Gaia’s library includes over 10,000 titles, over 88% of which is exclusive to Gaia, and approximately 75% of viewership is generated by content produced or owned by Gaia. Gaia is available on Apple TV, iOS, Android, Roku, Chromecast, and sold through Amazon Prime Video and Comcast Xfinity.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws. All statements other than statements of historical fact are forward-looking statements that involve risks and uncertainties. When used in this discussion, we intend the words “anticipate,” “believe,” “contemplate,” “continue,” “could,” “estimate,” “expect,” “future,” “hope,” “intend,” “may,” “might,” “objective,” “ongoing,” “plan,” “potential,” “predict,” “project,” “should,” “strive,” “target,” “will,” “would” and similar expressions as they relate to us to identify such forward-looking statements. Our actual results could differ materially from the results anticipated in these forward-looking statements as a result of certain factors set forth under “Risk Factors” and elsewhere in our filings with the SEC, including in our Annual Report on Form 10-K for the year ended December 31, 2023. Risks and uncertainties that could cause actual results to differ include, without limitation: our ability to attract new members and retain existing members; our ability to compete effectively, including for customer engagement with different modes of entertainment; maintenance and expansion of device platforms for streaming; fluctuation in customer usage of our service; fluctuations in quarterly operating results; service disruptions; production risks; general economic conditions; future losses; loss of key personnel; price changes; brand reputation; acquisitions; new initiatives we undertake; security and information systems; legal liability for website content; failure of third parties to provide adequate service; future internet-related taxes; our founder’s control of us; litigation; consumer trends; the effect of government regulation and programs; the impact of public health threats; our ability to remediate the material weaknesses in our internal control over financial reporting and technical accounting; and other risks and uncertainties included in our filings with the SEC. We caution you that no forward-looking statement is a guarantee of future performance, and you should not place undue reliance on these forward-looking statements which reflect our views only as of the date of this press release. We undertake no obligation to update any forward-looking information.

Company Contact:

Ned Preston
Chief Financial Officer
Gaia, Inc.
Investors@gaia.com

Investor Relations:

Gateway Group, Inc.
Cody Slach
(949) 574-3860
GAIA@gateway-grp.com 

FAQ

How much money is Gaia (GAIA) raising in its February 2025 stock offering?

Gaia is raising approximately $8.0 million in gross proceeds through an offering of 1,600,000 shares of Class A common stock priced at $5.00 per share.

What will Gaia (GAIA) use the proceeds from its 2025 stock offering for?

Gaia plans to use the net proceeds primarily for enhancing AI capabilities, developing the Gaia Community project, and general corporate purposes.

How many additional shares can underwriters purchase in Gaia's (GAIA) February 2025 offering?

Underwriters have a 45-day option to purchase up to 240,000 additional shares of Class A common stock.

Who are the book-running managers for Gaia's (GAIA) 2025 stock offering?

Roth Capital Partners and Lake Street Capital Markets are acting as joint book-running managers for the offering.

When is Gaia's (GAIA) February 2025 stock offering expected to close?

The offering is expected to close on February 7, 2025, subject to market and other conditions.