Laser Photonics Corporation Announces Closing of $3.0 Million Private Placement

Rhea-AI Summary

Laser Photonics (NASDAQ: LASE), a leading developer of industrial laser systems, has closed a $3.0 million private placement with institutional investors. The company issued 1,500,000 units, each consisting of one share of common stock and one common warrant. The warrants are exercisable at $4.34 per share and will expire 5.5 years from issuance. Aegis Capital Corp. acted as the Exclusive Placement Agent. LPC plans to use the net proceeds for working capital and general corporate purposes. The securities are being sold in a private placement exempt from registration requirements and are not registered under the Securities Act of 1933.

Positive

• Secured $3.0 million in funding through private placement
• Potential for additional capital through warrant exercise at $4.34 per share
• Strengthened working capital position for general corporate purposes

Negative

• Potential dilution of existing shareholders due to issuance of 1,500,000 new units
• Additional dilution possible if warrants are exercised
• Securities not registered, limiting their transferability

Insights

Financial Analyst

Laser Photonics 's $3 million private placement is a significant move to bolster its financial position. While the $3 million influx provides immediate working capital, it's important to note the dilutive effect of issuing 1,500,000 new units. The warrant structure, with an exercise price of $4.34 per share, could potentially lead to further dilution if exercised. However, this also represents a 44.67% premium over the current share price, indicating investor confidence in potential upside. The 5.5-year expiration on warrants gives LPC a long runway for growth before potential dilution. Overall, this financing strengthens LPC's balance sheet but comes at the cost of equity dilution, a common trade-off for growing companies in the industrial technology sector.

Market Research Analyst

This private placement highlights investor interest in the industrial laser systems market, particularly for cleaning and material processing applications. LPC's ability to secure funding in the current economic climate suggests confidence in its growth prospects. The involvement of institutional investors adds credibility to LPC's business model. However, the need for additional capital may indicate challenges in achieving profitability or funding expansion through operations alone. The registration rights agreement for resale of shares could lead to increased trading volume and potentially impact share price in the short term. Long-term, LPC's success will depend on its ability to capitalize on the growing demand for laser-based industrial solutions and translate this capital infusion into market share gains and improved financial performance.

Legal Expert

The structure of this private placement adheres to standard practices for non-registered offerings under the Securities Act of 1933. The inclusion of a registration rights agreement is a positive for investors, ensuring future liquidity. However, the current unregistered status of these securities limits their tradability, which is typical for such placements. The 6-month exercise restriction on warrants, unless shareholder approval is obtained earlier, provides a buffer against immediate dilution. The involvement of reputable legal counsel for both parties suggests thorough due diligence and compliance with securities regulations. Investors should note that while this offering provides capital for LPC, it also introduces new obligations, including potential future registration requirements and compliance with the terms of the warrants issued.

ORLANDO, Fla.--(BUSINESS WIRE)-- Laser Photonics Corporation (LPC) (NASDAQ: LASE), a leading global developer of industrial laser systems for cleaning and other material processing applications, today announced that it has closed a securities purchase agreement with institutional investors for aggregate gross cash proceeds of $3.0 million, before deducting fees to the placement agent and other offering expenses payable by the Company. The Company intends to use the net proceeds from the private placement for working capital and general corporate purposes.

In connection with the private placement, the Company issued an aggregate of 1,500,000 units. Each unit will consist of one share of common stock and one common warrant, each exercisable for one share of common stock at an exercise price of $4.34 per share. The common warrant will be exercisable on the earlier of six months after issuance or earlier shareholder approval and will expire 5.5 years from issuance.

Aegis Capital Corp. acted as the Exclusive Placement Agent for the private placement. CM Law PLLC is serving as counsel to the Company for the private placement. Kaufman & Canoles, P.C. is serving as counsel to Aegis Capital Corp. for the private placement.

The securities described above are being sold in a private placement exempt from the registration requirements of the Securities Act of 1933, as amended (the “Act”), and have not been registered under the Act, or applicable state securities laws. Accordingly, the securities 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 Act and such applicable state securities laws. Pursuant to a registration rights agreement with the investors, the Company has agreed to file one or more registration statements with the Securities and Exchange Commission (the “SEC”) covering the resale of the shares of common stock sold in the private placement and the shares of common stock issuable upon exercise of the warrants sold in the private placement.

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 Laser Photonics Corporation

Laser Photonics is a vertically integrated manufacturer and R&D Center of Excellence for industrial laser technologies and systems. Laser Photonics seeks to disrupt the $46 billion, centuries-old sand and abrasives blasting markets, focusing on surface cleaning, rust removal, corrosion control, de-painting and other laser-based industrial applications. Laser Photonics’ new generation of leading-edge laser blasting technologies and equipment also addresses the numerous health, safety, environmental and regulatory issues associated with old methods. As a result, Laser Photonics has quickly gained a reputation as an industry leader in industrial laser systems with a brand that stands for quality, technology and product innovation. Currently, world-renowned and Fortune 1000 manufacturers in the aerospace, automotive, defense, energy, industrial, maritime, space exploration and shipbuilding industries are using Laser Photonics’ "unique-to-industry" systems. For more information, visit https://www.laserphotonics.com.

Cautionary Note Concerning Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 concerning Laser Photonics Corporation and other matters. All statements contained in this press release that do not relate to matters of historical fact should be considered forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. The forward-looking statements in this press release are only predictions. Laser Photonics Corporation has based these forward-looking statements largely on its current expectations and projections about future events and financial trends that it believes may affect its business, financial condition and results of operations. Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. You should carefully consider the risks and uncertainties that affect our business, including those described in our filings with the Securities and Exchange Commission ("SEC"), including under the caption "Risk Factors" in Laser Photonics Corporation's Annual Report on Form 10-K filed for the year ended December 31, 2023 and the Company's other filings with the SEC, which can be obtained on the SEC website at www.sec.gov. These forward-looking statements speak only as of the date of this communication. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements, whether as a result of any new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our public announcements and filings with the SEC.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240819902408/en/

Investor Relations Contact:

laser@haydenir.com

Media Contact:

Karla Kizzort

Marketing Specialist

Laser Photonics Corporation

kkizzort@laserphotonics.com

Source: Laser Photonics Corporation

FAQ

How much funding did Laser Photonics (LASE) raise in its recent private placement?

Laser Photonics (LASE) raised $3.0 million in gross cash proceeds through its recent private placement with institutional investors.

What did Laser Photonics (LASE) issue in the private placement?

LASE issued 1,500,000 units, each consisting of one share of common stock and one common warrant exercisable at $4.34 per share.

How long are the warrants issued by Laser Photonics (LASE) valid?

The common warrants issued by LASE will expire 5.5 years from the date of issuance.

What does Laser Photonics (LASE) plan to use the proceeds for?

LASE intends to use the net proceeds from the private placement for working capital and general corporate purposes.