Giftify, Inc. (NASDAQ:GIFT), a catalog and mail-order retail company, has entered into a significant financing agreement with ClearThink Capital Partners (WA:CPAP), LLC, according to a recent 8-K filing with the Securities and Exchange Commission. The deal announcement comes as the company's stock trades near $1.08, having declined over 75% in the past year. According to InvestingPro analysis, the stock appears slightly undervalued at current levels. On Monday, the company announced details of the deal, which could provide up to $10 million in equity financing.
Under the terms of the Securities Purchase Agreement, ClearThink Capital has committed to purchasing 150,000 restricted shares of Giftify common stock at an effective price of $1.3333 per share. The first tranche of 75,000 shares was acquired on December 16, 2024, with the remaining shares to be delivered within five days after the filing of the Prospectus Supplement underlying the Strata Purchase Agreement.
Additionally, the Strata Purchase Agreement allows for ClearThink Capital to buy more of Giftify’s common stock in increments, based on a series of request notices. The amount for each notice is capped at the lesser of $1,000,000 or 500% of the average number of shares traded over the 10 trading days prior to the closing request date, with a minimum purchase notice of $25,000. The financing will be determined at 99% of the average closing prices on the Nasdaq for the three business days before the purchase date specified in a request notice.
However, ClearThink Capital's purchases are subject to a beneficial ownership cap of 9.99% of the issued and outstanding shares of Giftify common stock. This limitation ensures that ClearThink does not exceed a specified threshold of ownership in Giftify.
As part of the agreement, Giftify is obligated to issue 100,000 restricted shares of its common stock to ClearThink Capital, contingent upon an effective registration statement for the resale of the Purchase Shares.
The partnership between Giftify and ClearThink Capital introduces a flexible financing mechanism for Giftify, enabling the company to potentially access capital to support its growth initiatives. With a current ratio of 0.8 and operating with moderate debt levels, this financing could help address the company's short-term obligations. The full details of the agreements are available in the exhibits attached to the 8-K filing, which provides a comprehensive view of the terms and conditions. InvestingPro subscribers can access 12 additional key insights about Giftify's financial health and market performance.
In other recent news, Giftify Inc. has announced significant financial and strategic developments. The company has entered an agreement to sell approximately $5 million of its common stock in a direct offering, managed by Craft Capital LLC. In addition, Giftify has initiated an at-the-market equity offering program to potentially sell up to $30 million worth of shares, facilitated by Ascendiant Capital Markets, LLC.
These recent developments follow the company's rebranding from RDE, Inc. to Giftify, Inc., a strategic move to broaden its incentive-based offerings. In terms of financing, Giftify has secured a $2 million agreement with Spars Capital Group, set to mature in 2025.
The company has also seen changes in leadership, with the appointment of Steve Handy as the new Chief Financial Officer and Balazs Wallisch, the company's Chief Technology Officer, increasing his ownership to 1,040,217 shares.
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