Phunware Announces At the Market Equity Distribution Program
Phunware announced an Equity Distribution Agreement with Canaccord Genuity and other agents, allowing the company to sell up to $120 million of its common stock through an at-the-market offering. This move does not add to the existing universal shelf capacity of $200 million. Phunware also amended a prior Securities Purchase Agreement to exclude this new distribution from certain financing participation rights. The agreement aims to provide greater flexibility by involving Canaccord Genuity, Roth MKM, and Benchmark Company as new investment banks.
- Phunware can raise up to $120 million through the equity distribution, enhancing financial flexibility.
- Inclusion of three new investment banks (Canaccord Genuity, Roth MKM, and Benchmark Company) could provide wider market access and investor reach.
- No additional overhang added to the existing $200 million universal shelf.
- Potential for shareholder dilution due to the new equity distribution agreement.
- The announcement may signal cash flow concerns, necessitating new funding.
Insights
Phunware's announcement of the Equity Distribution Agreement with Canaccord Genuity and other investment banks signals a strategic move to bolster its capital. This arrangement allows Phunware to raise up to
From a financial perspective, this move could be seen as a double-edged sword. On one hand, it provides Phunware with the necessary funds to potentially expand its operations, invest in new technologies, or weather economic uncertainties. On the other hand, issuing new shares can result in dilution of existing shareholders' equity, which may pressure the stock price downward in the short term.
It's also noteworthy that Phunware has amended its existing Securities Purchase Agreement to exempt this new offering from participation rights of certain majority purchasers. This implies a strategic choice to streamline the fundraising process without complexities of additional approvals from prior investors. Such amendments usually aim to remove barriers for the new capital raise, showing management's intent to leverage market conditions efficiently.
For retail investors, it's essential to monitor how the funds raised will be utilized. If the capital is deployed effectively towards high-return projects, it could lead to long-term shareholder value creation. However, any misallocation of the raised capital could negatively impact the company’s financial health.
Looking at the market dynamics, Phunware’s choice of engaging multiple investment banks such as Canaccord Genuity, Roth MKM and Benchmark Company appears strategic. The diversified representation can enhance market reach and investor confidence, potentially leading to more successful share placements. It's a clear signal that Phunware aims to optimize the liquidity and flexibility of its capital raising efforts.
Additionally, the timing of this announcement could be crucial. Companies typically opt for ATM offerings when they foresee favorable market conditions, suggesting that Phunware's management is confident in current or upcoming market trends. This confidence can often be a positive signal to investors about future business prospects.
Furthermore, Phunware's emphasis on not adding incremental overhang to the existing $200 million universal shelf registration is noteworthy. It reassures investors that the company is not arbitrarily expanding its share issuance limit but is instead replacing an old agreement with a more flexible and potentially more lucrative arrangement.
For retail investors, understanding the impact of market conditions on ATM offerings is key. If the market environment remains favorable, the additional funds raised can provide a significant boost to Phunware’s growth trajectory with minimal negative impact on the stock price.
AUSTIN, Texas, June 04, 2024 (GLOBE NEWSWIRE) -- Phunware, Inc. (Nasdaq: PHUN, “Phunware”), the leading provider of patented wayfinding and mobile engagement solutions that enables brands to engage, manage and monetize anyone anywhere, today announced that it has entered into an Equity Distribution Agreement with Canaccord Genuity LLC, as representative of the several agents named on Schedule 1 thereto, pursuant to which Phunware may offer and sell, from time to time, shares of its common stock, for aggregate gross proceeds of up to
In connection with any offerings that may from time to time be conducted under the terms of the Equity Distribution Agreement, Phunware entered into an Amendment to Securities Purchase Agreement dated effective June 3, 2024 with certain majority purchasers thereunder, which amends its Securities Purchase Agreement dated January 18, 2024. The amendment provides that the participation rights with respect to subsequent financings shall not apply to, among others, issuances pursuant to the Distribution Agreement with Canaccord.
“To clarify, we are not adding incremental overhang to our original
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. A preliminary prospectus supplement will be filed with the Securities and Exchange Commission.
About Phunware
Phunware’s mission is to achieve unparalleled connectivity and monetization through widespread adoption of Phunware technologies, by leveraging brands, mobile consumers, partners and digital asset holders and market participants. With the activation of Phunware 3.0, Phunware is poised to expand its software products and services audience and verticals, utilize and monetize its patents and other intellectual property rights and interests, and update and reintroduce its digital asset ecosystem for existing holders and new market participants.
Phunware PR & Media Inquiries:
Email: PRESS@phunware.com Phone: (512) 693-4199
Phunware Investor Relations:
Matt Glover and John Yi
Gateway Group, Inc.
Email: PHUN@gateway-grp.com
Phone: (949) 574-3860
Safe Harbor / Forward-Looking Statements
This press release includes forward-looking statements. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations and financial position, business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “expose,” “intend,” “may,” “might,” “opportunity,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions that convey uncertainty of future events or outcomes are intended to identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. For example, Phunware is using forward-looking statements when it discusses the proposed offering and the timing and terms of such offering and its intended use of proceeds from such offering should it occur.
The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors” in our filings with the SEC, including our reports on Forms 10-K, 10-Q, 8-K and other filings that we make with the SEC from time to time. Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward- looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. These risks and others described under “Risk Factors” in our SEC filings may not be exhaustive.
By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in
the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if our results or operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in this press release, those results or developments may not be indicative of results or developments in subsequent periods.
FAQ
What is the total amount Phunware can raise through its new equity distribution agreement?
Which investment banks are involved in Phunware's new at-the-market offering?
Does Phunware's new equity distribution agreement add to the existing universal shelf capacity?
What changes were made to Phunware's Securities Purchase Agreement?
