Glucotrack, Inc. (NASDAQ:GCTK), a medical device company currently trading at $0.25 with a market capitalization of $2.62 million, has entered into a sales agreement with Dawson James Securities, Inc. to offer shares of common stock with an aggregate offering price of up to $8.23 million through an at-the-market equity offering program.
According to InvestingPro analysis, the company is currently overvalued and faces significant financial challenges, with a weak financial health score and rapidly depleting cash reserves. The announcement was made on Monday, December 17, 2024.
The agreement allows Glucotrack to sell shares from time to time at its discretion within certain parameters, including the number of shares, time period for sales, and minimum price restrictions. This move comes as the company's stock has experienced a significant decline, with a year-to-date return of -80.34% and a concerning current ratio of 0.14.
Dawson James will act as the sales agent and will receive a commission of 3% on the gross proceeds from the sale of the common stock. InvestingPro subscribers have access to 15 additional key insights about GCTK's financial position and market performance.
The shares will be sold pursuant to Glucotrack's shelf registration statement on Form S-3 and the related prospectus filed with the Securities and Exchange Commission (SEC) on September 23, 2024, which was declared effective on October 3, 2024. A prospectus supplement related to the offering was also filed on December 17, 2024.
Glucotrack has stated that there is no obligation to sell any shares under this agreement and that the offering will only be conducted through methods allowed by the Securities Act of 1933. The sales agreement may be terminated by either party under certain conditions, including any material adverse change in the company.
The funds raised through this at-the-market offering are expected to be used for general corporate purposes, although specific details on the use of proceeds were not disclosed in the press release statement. This move by Glucotrack follows a trend among medical device companies to raise capital through equity offerings to fund operations and research and development activities.
The legal opinion pertaining to the validity of the common stock being offered was provided by Nelson Mullins Riley & Scarborough LLP, as filed with the SEC.
Investors and shareholders can access the full sales agreement and legal opinion filed with the SEC to obtain more detailed information regarding the terms and conditions of the offering. The sale of shares under this agreement is subject to market conditions and the company's needs, and there can be no assurance as to the amount or timing of any sales.
With an EBITDA of -$13.1 million in the last twelve months and a weak overall financial health rating from InvestingPro, the company's ability to execute this offering successfully will be crucial for its future operations.
In other recent news, Glucotrack, Inc. has entered several definitive agreements following the closure of its public offering and concurrent private offering. The public offering resulted in the sale of over 2.4 million shares of common stock, nearly 4.8 million pre-funded warrants, and over 7.1 million each of Series A and Series B Warrants. Concurrently, an existing investor tied to a company director converted approximately $4.1 million of debt into equity.
The issuance of shares upon exercise of the newly issued warrants is contingent upon receiving stockholder approval, which Glucotrack intends to seek at a special meeting.
In addition, Glucotrack initiated a public offering to raise $10 million in gross proceeds by issuing approximately 7.2 million shares. This coincided with the company's conversion of $4 million in secured convertible notes into equity. The offering is managed by Dawson James Securities, Inc.
Furthermore, Glucotrack's shareholders approved a significant issuance proposal, solidifying the company's financial structure. The proposal received substantial support, securing 2,332,910 votes in favor.
On the personnel front, Glucotrack made strategic additions to its board and recruited a new Vice President of Clinical Operations. Lastly, the company's Continuous Blood Glucose Monitor (CBGM) technology showed promising results in a preclinical study, indicating high accuracy in continuous glucose monitoring. These developments underscore Glucotrack's ongoing strategic efforts to grow within the medical instruments and apparatus industry.
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