SOBRsafe Announces Pricing of $8.2 Million Private Placement

Rhea-AI Summary

SOBRsafe (NASDAQ:SOBR), a provider of transdermal alcohol detection solutions, has announced the pricing of a $8.2 million private placement with institutional investors. The company plans to issue 2,024,691 units at $4.05 per unit, each consisting of one common stock share (or pre-funded warrant) and multiple warrants. The Series A warrants are exercisable at $3.80 per share, while the Series B warrants have a $0.001 exercise price.

The private placement is expected to close around October 8, 2024, subject to customary conditions. Aegis Capital Corp. is acting as the Exclusive Placement Agent. SOBRsafe intends to use the net proceeds for general corporate purposes and working capital. The company has agreed to file registration statements with the SEC for the resale of the securities issued in this private placement.

Positive

• Secured $8.2 million in gross proceeds through private placement
• Potential for additional capital through warrant exercises
• Strengthened balance sheet for general corporate purposes and working capital

Negative

• Potential dilution of existing shareholders due to new share issuance
• Warrants may lead to further dilution if exercised
• Private placement shares sold at a discount to market price

Insights

Financial Analyst

This $8.2 million private placement is a significant capital raise for SOBRsafe, a company with a market cap of only $2.69 million. The deal structure is complex, involving units consisting of common stock (or pre-funded warrants), Series A warrants and Series B warrants. The effective unit price of $4.05 represents a substantial premium to the current stock price, which is positive.

However, the potential dilution from the warrants is concerning. The Series A warrants have an exercise price of $3.80, while the Series B warrants have a nominal $0.001 exercise price with an adjustable number of shares. This could lead to significant future dilution for existing shareholders.

The company's intent to use proceeds for general corporate purposes and working capital suggests a need for immediate cash infusion. While this funding provides a lifeline, it doesn't necessarily indicate new growth opportunities or product developments. Investors should closely monitor how management utilizes these funds to drive value.

Legal Expert

The private placement's structure raises several legal considerations. First, the issuance of unregistered securities under a Securities Act exemption limits the immediate tradability of these shares. The company's commitment to file registration statements for resale is important for investor liquidity but adds regulatory overhead.

The complex warrant structure, particularly the Series B warrants with adjustable share counts, may invite scrutiny from regulators concerned about potential market manipulation. Additionally, the anti-dilution provisions in the Series A warrants could trigger future legal challenges if they significantly impact existing shareholders' rights.

Investors should note that despite the company's disclosure, this private placement still carries legal risks typical of such transactions, including potential claims of inadequate disclosure or unfair terms. The involvement of reputable legal counsel on both sides may mitigate some of these risks, but doesn't eliminate them entirely.

DENVER, CO / ACCESSWIRE / October 7, 2024 / SOBR Safe, Inc. (NASDAQ:SOBR) ("SOBRsafe"), provider of next-generation transdermal alcohol detection solutions, today announced the pricing of a private placement with certain institutional investors. The aggregate gross cash proceeds are expected to be $8.2 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 general corporate purposes and working capital.

In connection with the private placement, the Company is planning to issue an aggregate of 2,024,691 units. Each unit will be sold at an effective unit price of $4.05 per unit and will consist of one share of common stock (or one pre-funded warrant in lieu thereof), two (2) Series A warrants, each exercisable for one share of common stock at an initial exercise price of $3.80 per share and one Series B warrant at an exercise price of $0.001 to purchase such number of shares of common stock as will be determined on the Reset Date (as defined in the Series B warrant). The Series A warrants and the Series B warrants are exercisable beginning on the date that Stockholder Approval (as defined in the Series A warrant) is obtained. The Series A warrants will have a term of 5 years and the Series B warrants are exercisable until exercised in full. The exercise price and number of shares of common stock issuable upon exercise of the Series A warrants are subject to adjustment upon future dilutive issuances and stock splits, subject to a floor, and the exercise price and number of shares of common stock issuable upon exercise of the Series B warrants are subject to adjustment upon stock splits, subject to a floor, in each case, as described in more detail in the Current Report on Form 8-K to be filed in connection with the private placement.

The closing of the private placement is expected to occur on or about October 8, 2024, subject to the satisfaction of certain customary closing conditions.

Aegis Capital Corp. is acting as the Exclusive Placement Agent for the private placement. Lucosky Brookman LLP is acting as counsel to the Company. Sichenzia Ross Ference Carmel LLP is acting as counsel to Aegis Capital Corp.

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 investor, the Company has agreed to file one or more registration statements with the Securities and Exchange Commission (the "SEC") covering the resale of the common stock sold in the private placement and the common stock issuable upon exercise of the pre-funded warrants and 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 SOBRsafe™
Alcohol misuse is the fourth leading cause of preventable death in America, and the seventh worldwide. Yet prevention and monitoring solutions have not kept pace with this epidemic. Legacy technologies are invasive and inefficient, unhygienic and unconnected. There has to be a better way.

Enter SOBRsafe™. Our advanced transdermal (touch-based) technology detects and instantaneously reports the presence of alcohol as emitted through a user's skin - no breath, blood or urine sample is required. With a powerful backend data platform, SOBRsafe provides next generation, passive detection technology for the behavioral health, judicial and consumer markets, and for licensing and integration.

The SOBRsafe technology is commercially available for point-of-care screening (SOBRcheck) and continuous monitoring (SOBRsure). At SOBRsafe, our mission is to create better outcomes and save lives. To learn more, visit www.sobrsafe.com.

Safe Harbor Statement
Our prospects here at SOBRsafe are subject to uncertainties and risks. This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Act of 1934. The Company intends that such forward-looking statements be subject to the safe harbor provided by the foregoing Sections. These forward-looking statements are based largely on the expectations or forecasts of future events, can be affected by inaccurate assumptions, and are subject to various business risks and known and unknown uncertainties, a number of which are beyond the control of management. Therefore, actual results could differ materially from the forward-looking statements contained in this presentation. The Company cannot predict or determine after the fact what factors would cause actual results to differ materially from those indicated by the forward-looking statements or other statements. The reader should consider statements that include the words "believes", "expects", "anticipates", "intends", "estimates", "plans", "projects", "should", or other expressions that are predictions of or indicate future events or trends, to be uncertain and forward-looking. We caution readers not to place undue reliance upon any such forward-looking statements. The Company does not undertake to publicly update or revise forward-looking statements, whether because of new information, future events or otherwise. Additional information respecting factors that could materially affect the Company and its operations are contained in the Company's filings with the SEC which can be found on the SEC's website at www.sec.gov.

Contact SOBRsafe:
IR@sobrsafe.com

SOURCE: SOBRsafe

View the original press release on accesswire.com

FAQ

What is the total value of SOBRsafe's (SOBR) recent private placement?

SOBRsafe (SOBR) has announced a private placement with expected gross cash proceeds of $8.2 million.

How many units is SOBRsafe (SOBR) planning to issue in the private placement?

SOBRsafe (SOBR) is planning to issue an aggregate of 2,024,691 units in the private placement.

What is the price per unit in SOBRsafe's (SOBR) private placement?

The effective unit price in SOBRsafe's (SOBR) private placement is $4.05 per unit.

When is the expected closing date for SOBRsafe's (SOBR) private placement?

The closing of SOBRsafe's (SOBR) private placement is expected to occur on or about October 8, 2024.

What will SOBRsafe (SOBR) use the proceeds from the private placement for?

SOBRsafe (SOBR) intends to use the net proceeds from the private placement for general corporate purposes and working capital.