In a strategic move to bolster its capital, AppTech Payments Corp. (NASDAQ:APCX), a Delaware-based prepackaged software services provider, has signed a significant agreement with a warrant holder.
The deal, finalized on Tuesday, involves exercising existing warrants for approximately 1.67 million shares at a reduced price, generating around $1.17 million in gross proceeds.
The exercised warrants, originally priced at $2.74 per share and issued in October 2023, were exercised at an amended price of $0.70 per share. With this transaction, AppTech has agreed to issue new unregistered warrants for about 3.33 million shares, also at $0.70, exercisable six months post-issuance with a five-and-a-half-year term.
This financing maneuver, expected to close by Saturday, is anticipated to provide the company additional working capital and support for general corporate purposes.
Rodman & Renshaw LLC's engagement as the exclusive placement agent for the transaction has been confirmed. The company agrees to pay related fees, including a 7% cash fee of the gross proceeds, $75,000 for non-accountable expenses, and a $15,950 clearing fee.
The new warrants and the shares they represent have not been registered under the Securities Act but are offered privately, adhering to specific exemptions.
AppTech has committed to filing a registration statement for the resale of these new warrant shares within 30 days of the agreement and to ensuring its effectiveness within a specified timeframe.
AppTech has also agreed to a 45-day restriction on equity sales post-closing and a six-month moratorium on variable rate transactions, with defined exceptions.
Furthermore, the company has amended existing warrants from February 2023, reducing their exercise price to $0.70 and extending their life following the closing of the current transaction.
This news is based on a recent SEC filing by AppTech Payments Corp.
In other recent news, AppTech Payments Corp. is facing a potential delisting from the Nasdaq Capital Market due to an equity shortfall. The company received a deficiency notice from Nasdaq for not complying with the minimum stockholders' equity requirement. AppTech Payments has been given a deadline to submit a plan to regain compliance with the listing standards.
In the meantime, AppTech Payments Corp. has announced a strategic partnership with FISB Solutions to modernize core banking systems for community banks. The collaboration aims to integrate neo-bank technologies, enhancing these institutions' digital capabilities.
Furthermore, AppTech has announced the pricing of its public offering of 2 million shares at $1.00 each, managed by EF Hutton LLC, to raise $2 million before deductions. The proceeds are intended to integrate AppTech's existing business, working capital, and general corporate purposes.
Lastly, the company has completed the pilot program of its Banking-as-a-Service platform, marking its transition towards the commercial launch of InstaCash. This new service will offer virtual accounts, debit and credit cards, and high-interest-yielding financial products.
InvestingPro Insights
In light of AppTech Payments Corp.'s recent strategic financing efforts, an analysis of real-time data and InvestingPro Tips provides a clearer picture of the company's financial health and market performance. As of the last twelve months leading up to Q2 2024, AppTech has a market capitalization of approximately $17.39 million, with a revenue growth of 3.59%. Despite this growth, the company's revenue for the same period was just $0.46 million, indicating challenges in scaling its operations.
InvestingPro Tips highlight that analysts are expecting sales growth in the current year, which could signal optimism for the company's future performance. However, it's important to note that the stock has experienced significant price volatility and is currently trading near its 52-week low, reflecting investor caution. Additionally, with a high Price / Book ratio of 9.99, the stock is trading at a premium compared to its book value, which could be a point of concern for value investors.
For investors seeking a more in-depth analysis, there are additional InvestingPro Tips available, offering a comprehensive look at AppTech's financial metrics and market potential. The company's recent warrant exercise and additional capital raise could be pivotal in addressing its short-term obligations, which currently exceed its liquid assets. As AppTech continues to navigate the competitive landscape of software services, these financial insights will be crucial for stakeholders monitoring the company's progress.
For further information and tips, interested parties can explore the full range of insights on InvestingPro, which includes a total of 12 tips for AppTech Payments Corp. at https://www.investing.com/pro/APCX.
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