Gaxos.ai Inc. Announces Closing of $3.5 Million Private Placement Priced At-The-Market under Nasdaq Rules

Rhea-AI Summary

Gaxos.ai Inc. (GXAI) closed a private placement offering, selling 628,367 shares of common stock, series A warrants, and short-term series B warrants at $5.57 per share. The gross proceeds were $3.5 million. H.C. Wainwright & Co. acted as the exclusive placement agent. The company plans to use the net proceeds for working capital and general corporate purposes.

Insights

Financial Analyst

The private placement concluded by Gaxos.ai signifies a strategic move to bolster its working capital and support general corporate functions. The decision to issue both common stock and series A and B warrants reveals a multifaceted approach to financing, which could appeal to a diverse pool of investors. The exercise price of $5.50 for the warrants, set below the purchase price, might incentivize early exercise, potentially leading to an influx of funds but also to dilution of existing shares.

It's noteworthy that the gross proceeds stand at $3.5 million. This figure, in relation to the company's market cap and operational burn rate, could offer insights into the sufficiency of the capital raised. Investors should monitor the subsequent deployment of these funds into the company's AI development initiatives to gauge the effectiveness of this capital infusion.

Legal Expert

The offering's compliance with Section 4(a)(2) of the Securities Act and Regulation D is important for legal validity, as it allows the company to bypass the lengthy public offering process. The private placement nature of the deal restricts the sale of securities to accredited investors, which could limit market liquidity and impact the stock's volatility. The commitment to file a resale registration statement is also significant, as it obligates Gaxos to facilitate the future liquidity of these securities, a move that's generally well-received by the market.

Market Research Analyst

Gaxos.ai's focus on AI applications across various sectors positions it within a high-growth industry. However, the relatively modest size of the offering compared to industry giants suggests that Gaxos is still in the growth phase of its business cycle. The market's response to this offering will likely hinge on confidence in Gaxos's future revenue streams and its ability to convert AI research into profitable products. The presence of H.C. Wainwright & Co. as the placement agent adds a layer of credibility to the transaction, which may influence investor sentiment.

Roseland, NJ, March 15, 2024 (GLOBE NEWSWIRE) -- Gaxos.ai Inc. (NASDAQ: GXAI), (“Gaxos” or the “Company”), a company developing artificial intelligence applications across various sectors, announced today that it has closed its previously announced private placement for the purchase and sale of 628,367 shares of common stock (or pre-funded warrant in lieu thereof), series A warrants to purchase up to 628,367 shares of common stock and short-term series B warrants to purchase up to 628,367 shares of common stock at a purchase price of $5.57 per share (or per pre-funded warrant in lieu thereof) and accompanying warrants priced at-the-market under Nasdaq rules. The series A warrants and short-term series B warrants have an exercise price of $5.50 per share and are exercisable immediately upon issuance. The series A warrants expire five and one-half years from the date of issuance and short-term series B warrants expire twenty-four months from the date of issuance.

H.C. Wainwright & Co. acted as the exclusive placement agent for the offering.

The gross proceeds from the offering were $3.5 million, prior to deducting placement agent’s fees and other offering expenses payable by Gaxos. Gaxos intends to use the net proceeds from the offering for working capital and other general corporate purposes.

The securities described above are being offered in a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Regulation D promulgated thereunder and, along with the shares of common stock underlying the warrants, have not been registered under the Securities Act, or applicable state securities laws. Accordingly, the warrants and underlying shares of common stock may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. Pursuant to a registration rights agreement with investors, the Company has agreed to file a resale registration statement covering the securities described above.

This press release shall not constitute an offer to sell or a 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 Gaxos.ai Inc.

Gaxos.ai isn’t just developing applications; it’s aim is to redefine the human-AI relationship. Our offerings are being expanded to include health and wellness, as well as gaming. We’re committed to addressing health, longevity, and entertainment, through AI solutions.

Forward-Looking Statements

All statements other than statements of historical fact in this announcement are forward-looking statements that involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy, and financial needs and are subject to market and other conditions. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. Forward-looking statements include statements regarding the use of proceeds from the private placement. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s filings with the SEC.

Gaxos.ai Inc. Company Contact

Investor Relations
E: ir@gaxos.ai
T: 1-888-319-2499

FAQ

How many shares of common stock were sold in the private placement offering by Gaxos.ai Inc. (GXAI)?

Gaxos.ai Inc. (GXAI) sold 628,367 shares of common stock in the private placement offering.

What was the purchase price per share in the private placement offering by Gaxos.ai Inc. (GXAI)?

The purchase price per share in the private placement offering by Gaxos.ai Inc. (GXAI) was $5.57.

Who acted as the exclusive placement agent for the offering by Gaxos.ai Inc. (GXAI)?

H.C. Wainwright & Co. acted as the exclusive placement agent for the offering by Gaxos.ai Inc. (GXAI).

What are the intended uses of the net proceeds from the private placement offering by Gaxos.ai Inc. (GXAI)?

Gaxos.ai Inc. (GXAI) intends to use the net proceeds from the private placement offering for working capital and other general corporate purposes.

Under which regulations were the securities offered in the private placement by Gaxos.ai Inc. (GXAI)?

The securities offered in the private placement by Gaxos.ai Inc. (GXAI) were under Section 4(a)(2) of the Securities Act of 1933 and/or Regulation D.