Houston American Energy Corp. Announces $4,420,000 Registered Direct Offering.

Rhea-AI Summary

Houston American Energy Corp (NYSE American: HUSA) has announced a registered direct offering of 2,600,000 shares of common stock at $1.70 per share, expected to generate gross proceeds of approximately $4,420,000. The transaction is anticipated to close on January 23, 2025.

The offering is being conducted under a shelf registration statement on Form S-3 previously filed and declared effective by the SEC on November 4, 2024. Univest Securities, is serving as the sole placement agent for the offering.

Positive

• Secured immediate capital raise of $4.42 million
• Offering completed through registered direct offering, typically more efficient than public offering
• Quick execution with next-day closing timeline

Negative

• Share dilution through issuance of 2.6 million new shares
• Offering price of $1.70 may represent a discount to market price

Insights

Financial Analyst

Houston American Energy Corp's $4.42 million registered direct offering marks a substantial capital raise that warrants careful analysis. The offering price of $1.70 per share for 2.6 million shares represents approximately 18.8% dilution to the existing share base, considering the company's current market capitalization of about $23.4 million.

The timing and structure of this offering reveal several critical points:

• The use of a registered direct offering, while more streamlined than a traditional public offering, suggests urgency in securing funding
• The involvement of Univest Securities as the sole placement agent indicates a focused approach to institutional investors
• The offering's size relative to the company's market cap suggests a significant strategic move, potentially for operational expansion or debt management

For existing shareholders, this financing event presents a double-edged sword. While the additional capital could strengthen the company's financial position and fund growth initiatives, the substantial dilution will likely pressure the stock price in the near term. The success of this offering will ultimately depend on management's ability to deploy the capital effectively to generate returns that offset the dilutive impact.

HOUSTON, TX, Jan. 22, 2025 (GLOBE NEWSWIRE) -- Houston American Energy Corp. (NYSE American: HUSA) (the “Company”) today announced that it has entered into a definitive agreement with several investors for the purchase and sale of an aggregate of 2,600,000 shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) at a purchase price of $1.70 per share in a registered direct offering.

The aggregate gross proceeds to the Company of this offering are expected to be approximately $4,420,000. The transaction is expected to close on or about January 23, 2025, subject to the satisfaction of customary closing conditions.

Univest Securities, LLC is acting as the sole placement agent.

The registered direct offering is being made pursuant to a shelf registration statement on Form S-3 (File No. 333-282778) previously filed by the Company and declared effective by the U.S. Securities and Exchange Commission (“SEC”) on November 4, 2024. A final prospectus supplement and accompanying prospectus describing the terms of the proposed offering will be filed with the SEC and will be available on the SEC's website located at http://www.sec.gov. Electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, by contacting Univest Securities, LLC at info@univest.us, or by calling +1 (212) 343-8888.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sales of such securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Copies of the prospectus supplement relating to the registered direct offering, together with the accompanying base prospectus will be filed by the Company and, upon filing, can be obtained at the SEC's website at www.sec.gov.

Cautionary Note Regarding Forward-Looking Information:

This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) within the meaning of applicable securities laws. Forward-looking information is based on management’s current expectations and beliefs and is subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Forward-looking information in this news release includes, but not limited to, statements about the gross proceeds to the Company from the offering and the anticipated closing of the offering.

With respect to the forward-looking information contained in this news release, the Company has made numerous assumptions. While the Company considers these assumptions to be reasonable, these assumptions are inherently subject to significant business, economic, competitive, market and social uncertainties and contingencies. Additionally, there are known and unknown risk factors which could cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. A complete discussion of the risks and uncertainties facing our business is disclosed in our Annual Report on Form 10-K and other filings with the SEC on www.sec.gov.

All forward-looking information herein is qualified in its entirety by this cautionary statement, and the Company disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.

For additional information, view the company’s website at www.houstonamerican.com or contact Houston American Energy Corp. at (713) 222-6966.

FAQ

How much money will HUSA raise in its January 2025 offering?

Houston American Energy Corp will raise approximately $4,420,000 in gross proceeds through this registered direct offering.

How many shares is HUSA offering in the January 2025 registered direct offering?

HUSA is offering 2,600,000 shares of common stock in this registered direct offering.

What is the share price for HUSA's January 2025 registered direct offering?

The purchase price is $1.70 per share of common stock.

When will HUSA's January 2025 registered direct offering close?

The offering is expected to close on or about January 23, 2025, subject to customary closing conditions.

Who is the placement agent for HUSA's January 2025 offering?

Univest Securities, is acting as the sole placement agent for the offering.