ATIF Holdings Limited Announces Closing of $2.5 Million Registered Direct Offering and Private Placement

Rhea-AI Summary

ATIF Holdings (NASDAQ: ZBAI) has announced the closing of its previously announced $2.5 million registered direct offering and concurrent private placement with an institutional investor. The transaction, completed on February 5, 2025, included:

- Sale of 1,580,000 ordinary shares
- Pre-Funded Warrants to purchase 887,553 shares
- Warrants to purchase shares at $1.20 exercise price

The offering price was set at $1.00 per share (or $0.99 for Pre-Funded Warrants with $0.01 exercise price). The Pre-Funded Warrants are immediately exercisable. R. F. Lafferty & Co. acted as exclusive placement agent. The company plans to use the net proceeds for general corporate purposes and working capital.

Positive

• Secured $2.5 million in fresh capital through offering
• Pre-Funded Warrants are immediately exercisable
• Strengthened working capital position

Negative

• Share dilution through issuance of 1,580,000 new shares
• Additional potential dilution from 887,553 Pre-Funded Warrants
• Offering price of $1.00 per share indicates relatively low valuation

Insights

Financial Analyst

The $2.5M capital raise by ATIF Holdings reveals several critical insights for investors. The deal structure is particularly noteworthy - combining 1.58M ordinary shares with 887,553 pre-funded warrants and additional warrants exercisable at $1.20. The pricing mechanics are sophisticated: ordinary shares at $1.00 and pre-funded warrants at $0.99 with a nominal $0.01 exercise price.

The financing structure suggests careful consideration of immediate dilution versus future capital needs. The pre-funded warrants essentially represent deferred shares, while the additional warrants at $1.20 provide potential upside participation for the institutional investor. However, this represents approximately 12% dilution to existing shareholders based on the current market cap.

The involvement of R.F. Lafferty as placement agent and the use of a shelf registration indicates a planned, strategic approach to fundraising. For a company specializing in IPO advisory services, this capital raise demonstrates both opportunities and challenges: while it provides working capital, the need for financing at these terms suggests potential pressure on the core business model. The registration requirements for warrant-related shares also indicate ongoing compliance costs and potential future dilution events.

LAKE FOREST, Calif., Feb. 05, 2025 (GLOBE NEWSWIRE) -- ATIF Holdings Limited (Nasdaq: ZBAI) (the “Company”), a Lake Forest-based business consulting company that specializes in providing professional IPO, M&A advisory and post-IPO compliance services to small and medium-sized companies seeking to go public on a stock exchange in the United States, today announced the closing of its previously announced registered direct offering and concurrent private placement with an institutional investor. The Company issued ordinary shares and pre-funded warrants (“Pre-Funded Warrants”) in a registered direct offering. In a concurrent private placement, the Company also issued to the same investor warrants to purchase ordinary shares (the “Warrants”). Aggregate gross proceeds to the Company from both transactions were approximately $2.5 million. The transactions closed on February 5, 2025.

The transactions consisted of the sale of 1,580,000 ordinary shares (each a “Share”) Pre-Funded Warrants to purchase 887,553 Shares, each of which was sold together with one Warrant to purchase one Share at an exercise price of $1.20. The offering price per Share was $1.00 (or $0.99 for each Pre-Funded Warrant, which is equal to the offering price per Share minus an exercise price of $0.01 per Pre-Funded Warrant). The Pre-Funded Warrants are immediately exercisable and may be exercised at any time until exercised in full.

The Company expects to use the net proceeds from the offerings, together with its existing cash, for general corporate purposes and working capital.

R. F. Lafferty & Co., Inc. acted as exclusive placement agent for the offerings. Hunter Taubman Fischer & Li LLC acted as counsel to the Company. Lucosky Brookman LLP acted as counsel to R. F. Lafferty & Co., Inc.

The registered direct offering was made pursuant to an effective shelf registration statement on Form S-3 (No. 333-268927) previously filed with the U.S. Securities and Exchange Commission (the “SEC”) and declared effective by the SEC on March 21, 2023. A final prospectus supplement and accompanying prospectus describing the terms of the proposed offering was filed with the SEC and is available on the SEC’s website located at www.sec.gov. Electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, by contacting R. F. Lafferty & Co., Inc by email at offerings@rflafferty.com or via standard mail to R. F. Lafferty & Co., Inc, 40 Wall Street, 27^th Floor, New York, NY10005.

The offer and sale of the securities in the private placement were made in a transaction not involving a public offering and have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or applicable state securities laws. Accordingly, the securities may not be reoffered or resold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. The securities were offered only to accredited investors. Pursuant to the securities purchase agreement with the investor, the Company has agreed to file one or more registration statements with the SEC covering the resale of the ordinary shares issuable upon exercise of the Warrants.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy 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 ZBAI

ATIF Holdings Limited (NASDAQ: ZBAI) is a Lake Forest-based business consulting company that specializes in providing professional IPO, M&A advisory and post-IPO compliance services to small and medium-sized companies seeking to go public on a stock exchange in the United States. The company has a proven track record in successfully delivering comprehensive U.S. IPO consulting services to clients primarily in the United States but also internationally. The mission of ZBAI is to provide one-stop, comprehensive consulting services that guide clients through the complex and often challenging process of going public. ZBAI recognizes the complexity and challenges associated with the process of going public, and endeavors to simplify it while ensuring optimal outcomes for its clients through its comprehensive consulting services. ZBAI has been awarded the “Golden Bauhinia Award”, the highest award in the financial and securities industry in Hong Kong, for “Top 10 Best Listed Companies”. 

Forward-Looking Statements

Certain statements in this press release are "forward-looking statements" within the meaning of the "safe Harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, "estimated," "projected," Words such as "expect", "anticipate", "predict", "plan", "intend", "believe", "seek", "may", "will", "should", "future", "propose" and variations of these words or similar expressions (or the opposite of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements do not guarantee future performance, conditions or results and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control and may cause actual results or achievements to differ materially from those discussed in the forward-looking statements. Important factors include future financial and operating results, including revenues, income, expenses, cash balances and other financial items; Ability to manage growth and expansion; Current and future economic and political conditions; The ability to compete in industries with low barriers to entry; The ability to obtain additional financing to fund capital expenditure in the future. Ability to attract new customers and further enhance brand awareness; Ability to hire and retain qualified management and key staff; Trends and competition in the financial advisory services industry; Pandemic or epidemic disease; Except as required by law, the Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, the Company cannot assure you that such expectations will turn out to be correct, and the Company cautions you that actual results may differ materially from the expected results expressed or implied by the forward-looking statements we make. You should not interpret forward-looking statements as predictions of future events. Forward-looking statements represent only the beliefs and assumptions of our management as of the date such statements are made. The above forward-looking statements are made as of the date of this press release.

Contact Information
kenny@atifchina.com

FAQ

How much did ZBAI raise in its February 2025 offering?

ATIF Holdings (ZBAI) raised approximately $2.5 million through a registered direct offering and concurrent private placement completed on February 5, 2025.

What is the exercise price of ZBAI's warrants from the February 2025 offering?

The Warrants have an exercise price of $1.20, while the Pre-Funded Warrants have an exercise price of $0.01.

How many new shares did ZBAI issue in the February 2025 offering?

ZBAI issued 1,580,000 ordinary shares and Pre-Funded Warrants to purchase an additional 887,553 shares.

What will ZBAI use the proceeds from the February 2025 offering for?

ZBAI plans to use the net proceeds from the offerings, together with existing cash, for general corporate purposes and working capital.

What was the share price for ZBAI's February 2025 offering?

The offering price was $1.00 per share, and $0.99 for each Pre-Funded Warrant.