ToughBuilt Industries, Inc. Announces Closing of $5 Million Registered Direct Offering

Rhea-AI Summary

ToughBuilt Industries, Inc. (NASDAQ: TBLT; TBLTW) has successfully closed a registered direct offering with institutional investors, raising $5 million through the sale of 2,500 shares of Series F and Series G Convertible Preferred Stock. Each series has a stated value of $1,000 and can convert into a total of 25 million shares of common stock at a price of $0.20 each. Additionally, the company issued unregistered warrants that could allow the purchase of up to 18.75 million shares. The funds will primarily support working capital needs.

Positive

• Raised $5 million through a registered direct offering.
• Potential conversion of preferred stock into 25 million common shares, which can support growth.

Negative

• Issuance of preferred stock may dilute existing shareholders.
• Dependence on future shareholder approval for stock increase or reverse split.

LAKE FOREST, Calif., Feb. 15, 2022 (GLOBE NEWSWIRE) --  ToughBuilt Industries, Inc. (“ToughBuilt” or the “Company”) (NASDAQ: TBLT; TBLTW), today announced that it has closed its previously announced registered direct offering with certain institutional investors for the issuance and sale of an aggregate of 2,500 shares of Series F Convertible Preferred Stock and 2,500 shares of Series G Convertible Preferred Stock for gross proceeds of $5 million, before deducting placement agent fees and other offering expenses. The shares of Series F Convertible Preferred Stock have a stated value of $1,000 per share and are convertible into an aggregate of 12,500,000 shares of common stock at a conversion price of $0.20 per share. The shares of Series G Convertible Preferred Stock have a stated value of $1,000 per share and are convertible into an aggregate of 12,500,000 shares of common stock at a conversion price of $0.20 per share.  

H.C. Wainwright & Co. acted as the exclusive placement agent for the offering.

ToughBuilt currently intends to use the net proceeds from the offering for working capital purposes.

The Company also issued such investors unregistered warrants to purchase up to an aggregate of 18,750,000 shares of our common stock, at an exercise price of $0.251 per share, which are exercisable on the later of (i) the date of shareholder approval to increase the authorized shares of common stock or effect a reverse stock split of the common stock and (ii) six months following the date of issuance, and will expire five years from the initial exercise date.

The Series F and Series G Preferred Stock described above and the underlying shares of Common Stock were offered pursuant to a “shelf” registration statement on Form S-3 (Registration No. 333-252630) (the “Registration Statement”), which was declared effective by the Securities and Exchange Commission (the “SEC”) on February 8, 2021. The prospectus supplement to the prospectus contained in the Registration Statement relating to the offering was filed with the SEC. Electronic copies of the prospectus supplement and the accompanying prospectus relating to the offering may be obtained from H.C. Wainwright & Co., LLC, 430 Park Avenue 3rd Floor, New York, New York 10022, or by calling (212) 856-5711 or by emailing placements@hcwco.com or at the SEC’s website at http://www.sec.gov.
  
About ToughBuilt Industries, Inc.

ToughBuilt is an advanced product design, manufacturer and distributor with emphasis on innovative products. Currently focused on tools and other accessories for the professional and do-it-yourself construction industries. We market and distribute various home improvement and construction product lines for both the do-it-yourself and professional markets under the TOUGHBUILT brand name, within the global multibillion dollar per year tool market industry. All of our products are designed by our in-house design team. Since launching product sales in 2013, we have experienced significant annual sales growth. Our current product line includes three major categories, with several additional categories in various stages of development, consisting of Soft Goods & Kneepads and Sawhorses & Work Products. Our mission is to provide products to the building and home improvement communities that are innovative, of superior quality derived in part from enlightened creativity for our end users while enhancing performance, improving well-being and building high brand loyalty. Additional information about the Company is available at: https://www.toughbuilt.com/.

Forward Looking Statements

This press release contains “forward-looking statements.” Such statements may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements, and include, without limitation, the intended use of net proceeds from the registered direct offering. Such risks and uncertainties include, without limitation, risks and uncertainties associated with (i) market acceptance of our existing and new products, (ii) delays in bringing products to key markets, (iii) an inability to secure regulatory approvals for the ability to sell our products in certain markets, (iv) intense competition in the industry from much larger, multinational companies, (v) product liability claims, (vi) product malfunctions, (vii) our limited manufacturing capabilities and reliance on subcontractors for assistance, (viii) our efforts to successfully obtain and maintain intellectual property protection covering our products, which may not be successful, (ix) our reliance on single suppliers for certain product components, (x) the fact that we will need to raise additional capital to meet our business requirements in the future and that such capital raising may be costly, dilutive or difficult to obtain, (xi) the fact that we conduct business in multiple foreign jurisdictions, exposing us to foreign currency exchange rate fluctuations, logistical and communications challenges, burdens and costs of compliance with foreign laws and political and economic instability in each jurisdiction, (xii) market and other conditions. More detailed information about the Company and the risk factors that may affect the realization of forward looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10 K and its Quarterly Reports on Form 10 Q. Investors and security holders are urged to read these documents free of charge on the SEC’s web site at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise, except as required by law.

Investor Relations Contact:

KCSA Strategic Communications
David Hanover
ToughBuilt@KCSA.com

FAQ

What is ToughBuilt's recent capital raise amount and structure?

ToughBuilt raised $5 million through the sale of 2,500 shares of Series F and Series G Convertible Preferred Stock.

What are the conversion terms for the Series F and G Preferred Stock?

Each series converts into a total of 25 million shares of common stock at a price of $0.20 each.

What is the use of proceeds from ToughBuilt's recent offering?

The net proceeds are intended for working capital purposes.

What impact does the offering have on shareholders?

The preferred stock issuance may dilute existing shareholders and requires future shareholder approval for further stock actions.