ROSELAND, NJ - Gaxos.ai Inc. (NASDAQ: GXAI), a developer of artificial intelligence applications with a market capitalization of $9.5 million, has announced a registered direct offering of shares and a concurrent private placement of warrants. According to InvestingPro data, the company maintains a strong liquidity position with more cash than debt on its balance sheet. The company is set to sell 1,449,277 shares of common stock at $3.45 each, with gross proceeds expected to reach approximately $5 million before fees and expenses. The offering price represents a slight premium to the current trading price of $3.32, though InvestingPro analysis suggests the stock trades with high price volatility, having declined over 10% in the past week alone. InvestingPro subscribers have access to 8 additional key insights about GXAI's market position and financial outlook.
In addition to the stock offering, Gaxos.ai will issue warrants in a private placement that allows holders to purchase up to an additional 1,449,277 shares at $3.32 per share. These warrants are immediately exercisable and will expire three years from the date of issuance.
The closing of the offering is anticipated on or about December 20, 2024, subject to standard closing conditions. H.C. Wainwright & Co. is acting as the exclusive placement agent for the transaction.
The proceeds from the offering are intended for working capital and general corporate purposes. The shares of common stock are being offered pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission (SEC) on December 12, 2024, and became effective on December 18, 2024.
The offering is being conducted via a prospectus, including a prospectus supplement, as part of the registration statement. The prospectus supplement and the accompanying prospectus will be available on the SEC's website.
The warrants being issued are part of a private placement under Section 4(a)(2) of the Securities Act of 1933, as amended, and Regulation D promulgated thereunder. These securities, including the shares of common stock underlying the warrants, have not been registered under the Securities Act or applicable state securities laws, and therefore may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.
This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities described herein, nor will there be any sale of these securities in any state or jurisdiction where such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
The information in this article is based on a press release statement from Gaxos.ai Inc. With a current ratio of 17.12x, the company maintains strong short-term liquidity, though it remains unprofitable over the last twelve months. For comprehensive analysis and detailed financial metrics, investors can access the full suite of tools and insights available on InvestingPro, including exclusive Fair Value assessments and financial health scores.
In other recent news, Gaxos.ai Inc. has been making significant strides with the launch of Gaxos Labs, a suite of AI tools for game developers, and the adjustment of its financial strategy. Gaxos Labs, aimed at fostering creativity and enhancing revenue opportunities, includes a generative AI asset editor and Unity plugin, and a player-facing generative AI component for game customization. The company believes this product could alleviate financial pressures faced by game studios.
Simultaneously, Gaxos.ai has made changes to its financial strategy by reducing the exercise price for certain existing warrants and issuing new ones. Existing warrants for 1,256,734 shares will now be exercisable at $2.58 per share, down from $5.50. The company is also issuing new unregistered warrants for up to 2,513,468 shares of common stock at a price of $2.33 per share. This transaction, facilitated by H.C. Wainwright & Co., is expected to generate gross proceeds of approximately $3.24 million before fees and offering expenses.
These recent developments are part of Gaxos.ai's broader financial strategy, with the net proceeds expected to be used for working capital and other general corporate purposes. As part of the strategy, Gaxos.ai plans to file a registration statement with the Securities and Exchange Commission for the resale of the shares issuable upon the exercise of the new warrants.
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