Giftify, Inc. Announces $5.0 Million Registered Direct Offering

Rhea-AI Summary

Giftify (NASDAQ: GIFT), owner of CardCash.com and Restaurant.com, has announced a $5.0 million registered direct offering of common stock to individual investors. The offering is expected to close around December 26, 2024, with Craft Capital serving as the exclusive placement agent. The gross proceeds, estimated at $5.0 million before deducting placement agent fees and offering expenses, will be raised through a shelf registration statement previously declared effective by the SEC on October 15, 2024.

Positive

• Secured $5.0 million in additional funding through registered direct offering

Negative

• Potential dilution of existing shareholders' value through new stock issuance
• Additional expenses related to placement agent fees and offering costs will reduce net proceeds

Insights

Investment Banker

This $5.0 million registered direct offering represents a significant capital raise for Giftify, particularly given its market cap of $26.3 million. The offering structure through a shelf registration indicates strategic planning, allowing for quicker execution compared to traditional public offerings. The dilutive impact will be substantial, as this represents approximately 19% of the current market cap.

The choice of a registered direct offering over other financing options suggests a balance between speed of execution and maintaining some pricing control. Working with individual investors rather than institutional ones could indicate institutional interest or a strategic decision to diversify the shareholder base. The timing near year-end might affect the pricing and investor participation dynamics.

The use of Craft Capital as the exclusive placement agent, a smaller boutique firm, aligns with the company's size but might limit the reach to larger institutional investors. The closing conditions and SEC requirements add regulatory certainty but could impact the final execution timeline.

Financial Analyst

The financing terms warrant careful scrutiny. For a company operating digital platforms in the rewards and incentives space, raising capital at roughly 19% of market cap signals potential cash flow pressures or aggressive growth plans. The lack of disclosed pricing terms in this announcement is notable and suggests possible pricing pressure.

The shelf registration's recent effectiveness (October 2024) indicates this capital raise was planned, though the timing and size relative to market cap could suggest urgency. For retail investors, this level of dilution typically pressures short-term share price performance. The structure as a registered direct offering, while more efficient than a traditional public offering, often comes with higher costs and typically indicates limitations in accessing traditional equity markets.

The offering's impact on balance sheet metrics and cash runway will be important to monitor, especially given the current market environment for digital platform companies. The success of CardCash.com and Restaurant.com's operations will need to justify this dilution through accelerated growth or improved profitability metrics.

SCHAUMBURG, IL, Dec. 20, 2024 (GLOBE NEWSWIRE) -- Giftify, Inc. (NASDAQ: GIFT) (the “Company”), the owner and operator of leading digital platforms, CardCash.com and Restaurant.com, with a focus on incentives and rewards in retail, dining & entertainment experiences, today announced that it entered into a securities purchase agreement with certain individual investors to purchase approximately $5.0 million shares of its common stock (or common stock equivalents in lieu thereof) in a registered direct offering.

The gross proceeds to the Company from the registered direct offering are estimated to be approximately $5.0 million, before deducting the placement agent’s fees and other estimated offering expenses. The offering is expected to close on or about December 26, 2024, subject to the satisfaction of customary closing conditions.

Craft Capital LLC is acting as the exclusive placement agent for the offering.

The proposed offering of the securities described above is being offered by the Company pursuant to a “shelf” registration statement on Form S-3 (File No. 333-282322) filed with the Securities and Exchange Commission (SEC) and declared effective by the SEC on October 15, 2024, and the accompanying prospectus contained therein.

The offering is being made only by means of a prospectus supplement and accompanying prospectus. The prospectus supplement describing the terms of the public offering will be filed with the SEC prior to the closing and will form a part of the effective registration statement.

Copies of the prospectus supplement and the accompanying prospectus relating to this offering may be obtained, when available, on the SEC’s website at http://www.sec.gov or by contacting Craft Capital LLC Attention: Syndicate Department, 377 Oak St #402, Garden City NY 11530, or by telephone at (516) 833-1325.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, 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 Giftify, Inc.
Giftify, Inc. is a pioneer in the incentive and rewards industry with a focus on retail, dining & entertainment experiences, as the owner and operator of leading digital platforms, CardCash.com and Restaurant.com. CardCash.com is a leading secondary gift card exchange platform, allowing consumers and retailers to realize value by buying and selling gift cards at various scales. Its Restaurant.com is the nation’s largest restaurant-focused digital deals brand. Restaurant.com and our Corporate Incentives division connect digital consumers, businesses and communities offering thousands of dining, retail and entertainment deals options nationwide at over 184,000 restaurants and retailers. Restaurant.com prides itself on offering the best deal, every meal. Our gift cards and restaurant certificates allow customers to save at thousands of restaurants across the country with just a few clicks.

For more information, visit: www.giftifyinc.com and www.cardcash.com and https://www.restaurant.com.

Forward-Looking Statements
Press Releases may include forward-looking statements. In particular, the words “believe,” “may,” “could,” “should,” “expect,” “anticipate,” “estimate,” “project," "propose," "plan," "intend," and similar conditional words and expressions are intended to identify forward-looking statements. Any statements made in this news release about an action, event or development, are forward-looking statements. Such statements are based upon assumptions that in the future may prove not to have been accurate and are subject to significant risks and uncertainties. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the company. Accordingly, you should not place undue reliance on these forward-looking statements. Although the company believes that the expectations reflected in the forward-looking statements are reasonable, it can give no assurance that its forward-looking statements will prove to be correct. Investors are cautioned that any forward-looking statements are not guarantees of future performance and actual results or developments may differ materially from those projected. The forward-looking statements in this press release are made as of the date hereof. The company takes no obligation to update or correct its own forward-looking statements, except as required by law or those prepared by third parties that are not paid by the company. Statements in this press release that are not historical fact may be deemed 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. Although Giftify, Inc. believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, Giftify, Inc. is unable to give any assurance that its expectations will be attained. Factors that could cause actual results to differ materially from expectations include the company’s ability identify a suitable business model for the corporation.

Investors Contacts:
ClearThink
nyc@clearthink.capital

FAQ

What is the size of Giftify's (GIFT) December 2024 registered direct offering?

Giftify's registered direct offering announced on December 20, 2024, is approximately $5.0 million in common stock.

When is Giftify's (GIFT) December 2024 registered direct offering expected to close?

The offering is expected to close on or about December 26, 2024, subject to customary closing conditions.

Who is the placement agent for Giftify's (GIFT) December 2024 offering?

Craft Capital is acting as the exclusive placement agent for the offering.

What type of registration statement is Giftify (GIFT) using for this offering?

Giftify is using a shelf registration statement on Form S-3 (File No. 333-282322), which was declared effective by the SEC on October 15, 2024.