ROSELAND, NJ - Gaxos.ai Inc. (NASDAQ: GXAI), a developer of artificial intelligence applications, announced today the reduction of the exercise price for certain existing warrants and the issuance of new warrants. The company has entered into a definitive agreement, which allows the exercise of existing warrants for 1,256,734 shares at a reduced price of $2.58 per share, down from the original $5.50.
The offering, which is expected to close on September 23, 2024, involves the immediate cash exercise of these warrants and the concurrent issuance of new unregistered warrants to purchase up to 2,513,468 shares of common stock. These new warrants will be exercisable at a price of $2.33 per share, with varying terms of five and a half years, and twenty-four months.
H.C. Wainwright & Co. is serving as the exclusive placement agent for this transaction. The gross proceeds from the exercise of the existing warrants and the issuance of new ones are anticipated to be approximately $3.24 million before fees and offering expenses.
The company plans to allocate the net proceeds for working capital and other general corporate purposes. The new warrants and the shares of common stock issuable upon their exercise have not been registered under the Securities Act of 1933, as amended, and are being offered in a private placement under Section 4(a)(2) and Regulation D.
Gaxos.ai has also committed to filing a registration statement with the Securities and Exchange Commission for the resale of the shares issuable upon the exercise of the new warrants. This press release is not an offer to sell these securities and there will be no sale of these securities in any jurisdiction where such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
The company's expansion includes AI applications in health and wellness as well as gaming, with a focus on addressing health, longevity, and entertainment.
This news is based on a press release statement from Gaxos.ai Inc. and is intended for informational purposes only.
InvestingPro Insights
As Gaxos.ai Inc. (NASDAQ: GXAI) makes strategic moves to adjust the exercise price of warrants and issue new ones, investors and potential stakeholders are keenly observing the company's financial health and market performance. According to real-time data from InvestingPro, GXAI holds a market capitalization of $2.8 million. This relatively small market cap reflects the company's niche position in the artificial intelligence industry.
InvestingPro data also reveals a significant 69.77% decline in the stock's price over the last six months, indicating a period of volatility and underperformance relative to market expectations. This is further emphasized by the stock's current price being only 14.95% of its 52-week high. Despite this, the company's liquid assets exceed short-term obligations, providing some level of financial stability.
Two InvestingPro Tips that stand out for GXAI include the fact that the company holds more cash than debt on its balance sheet and that analysts anticipate a sales decline in the current year. These insights can be pivotal for investors considering the implications of the new warrant issuance and its impact on the company's capital structure. For those looking for more in-depth analysis, InvestingPro offers additional tips on GXAI, which can be accessed through their platform.
It's worth noting that Gaxos.ai Inc. does not pay a dividend to shareholders, which could influence the investment decisions of income-focused investors. To explore further insights and tips that may influence investment strategies, readers can find more exclusive InvestingPro Tips on https://www.investing.com/pro/GXAI, with a total of 9 additional tips available as of the latest update.
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