Gorilla Announces $10 Million Registered Direct Offering of Convertible Preferred Stock

Rhea-AI Summary

Gorilla Technology Group Inc. announced a registered direct offering of 10,000 Series B convertible preference shares to existing institutional investors at $1,000 per share. Each share is convertible into ordinary shares at $1.10 per share. Additionally, investors will receive Series B warrants to purchase up to 8,250,000 ordinary shares at $1.50 per share, exercisable immediately and expiring in five years.

Insights

Financial Analyst

The announcement by Gorilla Technology Group Inc. of a registered direct offering of Series B convertible preference shares and associated warrants represents a strategic capital raising effort. The conversion price of $1.10 per share for the preference shares and the exercise price of $1.50 for the Series B warrants are critical figures. They suggest a future dilution of equity for current shareholders but also indicate the investors' confidence in the company's prospects, as they are willing to invest at these prices.

From a financial perspective, the immediate impact on the company's balance sheet will be positive, infusing $10 million in capital. This could support Gorilla's expansion plans or strengthen its financial position. However, the long-term implications depend on how effectively the company deploys this capital. If used for growth initiatives that yield a high return on investment, the dilution could be offset by an increase in share value over time.

Market Research Analyst

Analyzing the market reaction to Gorilla's direct offering is essential. The terms of the offering, particularly the conversion and exercise prices relative to current market price, can affect investor sentiment. If the prices are set at a discount, it might indicate the company's need for quick capital at the expense of current shareholders' value, potentially leading to a negative market reaction. Conversely, a premium could signal strength and confidence, potentially leading to a positive reaction.

Moreover, the issuance of warrants alongside preference shares is a strategic move that could incentivize long-term investment and potentially stabilize the stock price. The five-year expiration term of the warrants provides insight into Gorilla's long-term strategic outlook, suggesting that the company is positioning for sustained growth.

Legal Expert

The structure of the securities offering—convertible preference shares and warrants—has legal implications. It is crucial to ensure that the terms comply with securities regulations. The fact that this is a registered direct offering means that Gorilla has filed the necessary documents with the SEC, providing transparency and adhering to regulatory standards. This can instill confidence among investors regarding the legality and governance of the transaction.

It is also important to consider the rights and preferences attached to the Series B preference shares. Typically, these could include dividend preferences or liquidation preferences, which can impact the distribution of assets in case of company liquidation and could be a factor in investors' decision-making.

LONDON, Feb. 15, 2024 (GLOBE NEWSWIRE) -- Gorilla Technology Group Inc. (“Gorilla”) (NASDAQ: GRRR), a global solution provider in Security Intelligence, Network Intelligence, Business Intelligence, and IoT technology, today announced that it has entered into securities purchase agreements with existing institutional investors for the purchase and sale of 10,000 Series B convertible preference shares (the “Series B preference shares”) at a purchase price of $1,000 per share pursuant to a registered direct offering. Each Series B preference share is convertible into ordinary shares of Gorilla at a conversion price of $1.10 per share. Along with the Series B preference shares, Gorilla further agreed to issue to the investors Series B ordinary share purchase warrants (the “Series B warrants”) to purchase up to an aggregate of 8,250,000 ordinary shares of Gorilla. The Series B warrants will have an exercise price of $1.50, will be exercisable immediately and will expire five years from the date of issuance. The closing of the offering is expected to occur on or about February 20, 2024, subject to the satisfaction of customary closing conditions.

A.G.P./Alliance Global Partners is acting as sole placement agent for the offering.

The gross proceeds to Gorilla from this offering are expected to be approximately $10 million, before deducting the placement agents’ fees and other offering expenses. Gorilla intends to use the net proceeds from the offering for working capital needs.

The securities described above are being offered pursuant to a shelf registration statement on Form F-3 (File No. 333-274053) that was filed with the Securities and Exchange Commission (the “SEC”) on August 17, 2023 and declared effective by the SEC on August 29, 2023. The offering is being made by means of a prospectus, including a prospectus supplement, that form part of the registration statement. A final prospectus supplement and accompanying prospectus relating to the offering will be filed with the SEC. Electronic copies of the final prospectus supplement and accompanying prospectus may be obtained, when available, from A.G.P./Alliance Global Partners, 590 Madison Avenue, 28th Floor, New York, NY 10022, or by telephone at (212) 624-2060, or by email at prospectus@allianceg.com.

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 offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Investor Relations Contact:
Cody Fletcher
The Blueshirt Group for Gorilla
+1 (434) 251-7165
gorillair@blueshirtgroup.com

Media Contact:
James McCusker
Canaan Parish Group Inc.
+1 (203) 585-4750
canaanparishgroup@gmail.com

FAQ

What type of shares are being offered in the registered direct offering by Gorilla Technology Group Inc.?

Gorilla Technology Group Inc. is offering 10,000 Series B convertible preference shares in the registered direct offering.

At what price are the Series B preference shares being sold to existing institutional investors?

The Series B preference shares are being sold at a price of $1,000 per share to existing institutional investors.

What is the conversion price of the Series B preference shares into ordinary shares of Gorilla Technology Group Inc.?

The conversion price of the Series B preference shares into ordinary shares of Gorilla Technology Group Inc. is $1.10 per share.

How many ordinary shares can investors purchase with the Series B warrants?

Investors can purchase up to an aggregate of 8,250,000 ordinary shares of Gorilla Technology Group Inc. with the Series B warrants.

What is the exercise price of the Series B warrants?

The exercise price of the Series B warrants is $1.50 per share.

When will the Series B warrants expire?

The Series B warrants will expire five years from the date of issuance.