Perma-Fix Announces Pricing of Approximately $20 Million Registered Direct Offering
Perma-Fix Environmental Services (Nasdaq: PESI) announced a definitive agreement for a $20 million registered direct offering. The company will issue 2,051,282 shares at $9.75 each. The funds will support R&D and business development for PFAS destruction technology, cover capex and maintenance costs, and serve general corporate purposes. The offering, managed by Craig-Hallum Capital Group and Wellington Shields & Co., is set to close around May 24, 2024, pending customary conditions. The offering is pursuant to a registration statement declared effective by the SEC on June 1, 2023.
- Perma-Fix is raising approximately $20 million to fund its key initiatives.
- The offering price of $9.75 per share indicates market confidence.
- Funds will support R&D for PFAS destruction technology, a critical environmental need.
- The capital raised will also cover ongoing facility capital expenditures and maintenance.
- General corporate and working capital purposes are also addressed, enhancing financial stability.
- Issuing 2,051,282 shares will dilute existing shareholders' equity.
- The company will incur placement agent fees and other offering expenses, reducing net proceeds.
- Market response to the equity offering could potentially lower the stock price.
Insights
Perma-Fix's announcement of a
The allocation of the proceeds is noteworthy. The focus on continued R&D and business development related to their patent-pending process for PFAS destruction indicates a strategic investment in innovation and compliance with environmental standards. This could position Perma-Fix as a leader in a niche but important segment of environmental services.
However, the mention of facility capex and maintenance costs suggests that part of the funds will be used for ongoing operational expenses, which may not immediately generate new revenue streams. This raises questions about the efficiency of fund allocation and the immediate return on investment. Investors should keep an eye on Perma-Fix's ability to execute these projects within budget and timeframe to gauge the overall impact on the company's financial health.
In summary, while the capital raise presents growth opportunities, it also brings dilution risks and operational challenges. Shareholders and potential investors must weigh these factors carefully.
The decision to direct funds towards R&D for PFAS destruction is particularly relevant in the context of increasing regulatory scrutiny over PFAS chemicals. PFAS, or 'forever chemicals,' have been under the spotlight due to their persistence in the environment and potential health risks. This strategic focus aligns with broader market trends favoring companies that contribute to sustainable and environmentally friendly technologies.
The investment in PFAS destruction technology could give Perma-Fix a competitive edge in the market. As regulatory bodies like the EPA continue to tighten regulations on PFAS, companies with advanced solutions will likely see increased demand. This could translate to long-term revenue growth, albeit contingent on successful R&D outcomes and market adoption.
However, the environmental services industry is highly competitive and technological advancements alone may not guarantee market dominance. The company's ability to commercialize its R&D outcomes and secure contracts will be critical. Investors should monitor industry trends and regulatory changes closely to assess the potential market size and Perma-Fix's positioning within it.
The involvement of Craig-Hallum Capital Group LLC and Wellington Shields & Co. LLC as exclusive placement agents lends credibility to the offering. These firms' reputations suggest a well-vetted and structured capital raise, which can instill confidence in investors regarding the transaction's integrity.
Moreover, the fact that the securities are being offered under an effective registration statement on Form S-3 with the SEC ensures regulatory compliance and transparency. This regulatory alignment is important for maintaining investor trust and mitigating risks associated with securities offerings.
However, it's worth noting that the use of proceeds for 'general corporate and working capital purposes' can sometimes be a red flag for investors, indicating a lack of specific strategic direction. Clearer communication on how these funds will precisely enhance shareholder value would be beneficial. Transparency in fund allocation can assure investors that their capital is being used effectively and not merely for bridging operational gaps.
ATLANTA, May 22, 2024 (GLOBE NEWSWIRE) -- Perma-Fix Environmental Services, Inc. (Nasdaq: PESI) (“Perma-Fix” or the “Company”) today announced that it has entered into a definitive agreement for the issuance and sale of 2,051,282 shares of its common stock at an offering price of
The gross proceeds from the offering, before deducting the placement agent’s fees and other offering expenses, are expected to be approximately
Craig-Hallum Capital Group LLC and Wellington Shields & Co. LLC are acting as exclusive placement agents for the offering. The offering is expected to close on or about May 24, 2024, subject to the satisfaction of customary closing conditions.
The securities described above are being offered pursuant to a registration statement on Form S-3 (File No. 333-272074), which was declared effective by the Securities and Exchange Commission (the “SEC”) on June 1, 2023. The offering is being made only by means of a prospectus which is a part of the effective registration statement. A final prospectus supplement and the accompanying prospectus relating to the registered direct offering will be filed with the SEC and will be available on the SEC’s website at www.sec.gov. Additionally, when available, electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained from (i) Craig-Hallum Capital Group LLC at 222 South Ninth Street, Suite 350, Minneapolis, MN 55402, or by phone at (612) 334-6300 or email at prospectus@chlm.com, or (ii) Wellington Shields & Co. LLC at 140 Broadway New York, NY 10005, or by phone at 212-320-3000 or email at compliance@wellingtonshields.com.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in this offering, 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 Perma-Fix Environmental Services
Perma-Fix Environmental Services, Inc. is a nuclear services company and leading provider of nuclear and mixed waste management services. The Company’s nuclear waste services include management and treatment of radioactive and mixed waste for hospitals, research labs and institutions, federal agencies, including the U.S. Department of Energy (“DOE”), the U.S. Department of Defense (“DOD”), and the commercial nuclear industry. The Company’s nuclear services group provides project management, waste management, environmental restoration, decontamination and decommissioning, new build construction, and radiological protection, safety and industrial hygiene capability to our clients. The Company operates four nuclear waste treatment facilities and provides nuclear services at DOE, DOD, and commercial facilities, nationwide.
Please visit us at http://www.perma-fix.com.
This press release contains “forward-looking statements” which are based largely on the Company’s expectations and are subject to various business risks and uncertainties, certain of which are beyond the Company's control. Forward-looking statements generally are identifiable by use of the words such as “believe”, “expects”, “intends”, “anticipate”, “plan to”, “estimates”, “projects”, and similar expressions. Forward-looking statements include, but are not limited to: the Company’s ability to satisfy the closing conditions related to the registered direct offering transaction and the overall timing and completion of such closing and the use of the net proceeds of the offering; accepting commercial waste for destruction before the end of the year; well positioned; treatment of effluent from DFLAW facility; and cost-effective solution for Hanford site tank waste. While the Company believes the expectations reflected in this news release are reasonable, it can give no assurance such expectations will prove to be correct. There are a variety of factors which could cause future outcomes to differ materially from those described in this release, including, without limitation, future economic conditions; industry conditions; competitive pressures; our ability to apply and market our new technologies; the government or such other party to a contract granted to us fails to abide by or comply with the contract or to deliver waste as anticipated under the contract or terminates existing contracts; Congress fails to provides funding for the DOD’s and DOE’s remediation projects; inability to obtain new foreign and domestic remediation contracts; and the additional factors referred to under “Risk Factors” and “Special Note Regarding Forward-Looking Statements” of our 2023 Form 10-K and Form 10-Q for quarter ended March 31, 2024. The Company makes no commitment to disclose any revisions to forward-looking statements, or any facts, events or circumstances after the date hereof that bear upon forward-looking statements.
Contacts:
David K. Waldman-US Investor Relations
Crescendo Communications, LLC
(212) 671-1021
Herbert Strauss-European Investor Relations
herbert@eu-ir.com
+43 316 296 316
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