DENVER - authID Inc. (NASDAQ: AUID), a company specializing in biometric identity verification solutions, announced today that it has initiated a registered direct offering of its common stock. The offering involves the sale of 1,464,965 shares at a price of $7.50 per share, with an increased price of $8.16 per share for company directors. The gross proceeds are anticipated to reach approximately $11 million before deductions for fees and expenses.
The transaction is scheduled to close on or around June 27, 2024, contingent upon customary closing conditions. Madison Global Partners (NYSE:GLP), LLC, is the sole placement agent for this offering.
The company intends to utilize the net proceeds to expand its sales and operations, particularly focusing on new industry sectors where it has recently secured accounts. Additionally, authID plans to enhance its customer success team to support a growing number of clients transitioning to its platform.
Rhon Daguro, CEO of authID, expressed optimism about the offering's role in the company's growth trajectory, emphasizing the team effort involved in this initiative and the targeted use of funds to scale the business.
The shares are being offered pursuant to a shelf registration statement filed with the Securities and Exchange Commission (SEC) and declared effective as of November 10, 2021. Relevant documents, including a prospectus supplement and accompanying prospectus, will be available through the SEC's website and from Madison Global Partners, LLC.
authID is recognized for its patented technology that verifies identities for customer and employee logins and transactions, aiming to prevent fraudulent activities such as account takeovers. The company's biometric identity platform boasts a process time of 700ms, providing a secure and user-friendly experience.
This press release does not constitute an offer to sell or a solicitation of an offer to buy any securities. The offering of shares will not be conducted in any jurisdiction where such an offer, solicitation, or sale would be unlawful without registration or qualification under the securities laws of such state or jurisdiction.
The information reported is based on a press release statement.
In other recent news, AuthID reported a significant year-over-year increase in its Q1 2024 revenue, reaching $0.16 million compared to $0.04 million in the same period last year. Despite this growth, the company reported a net loss of $3.06 million, mainly due to increased operating expenses and non-cash charges. The company's CEO, Rhon Daguro, highlighted AuthID's technological advancements and customer acquisition efforts, which have led to a notable increase in the sales pipeline and booked contracts.
Looking ahead, AuthID aims to achieve a booked Annual Recurring Revenue (bARR) of $9 million in 2024 and anticipates total revenue for the year to be between $1.4 million to $1.6 million. The company's total pipeline is valued at $21.3 million, with a 42% close ratio goal to achieve the bARR target. AuthID's focus for 2025 is on customer retention and expansion.
The company also acknowledged the need for additional financing later in the year. Despite the net losses, AuthID secured $3 million in booked contracts in 2023 and is experiencing steady growth in user numbers. The company is strategically positioning itself in the growing authentication market, with a focus on eliminating authentication fraud and protecting against emerging threats.
InvestingPro Insights
As authID Inc. (NASDAQ: AUID) advances with its registered direct offering, the company's financial metrics and market performance provide a snapshot of its current standing. With a market capitalization of approximately $77.21 million USD, authID is navigating the market as a niche player in the biometric identity verification industry.
InvestingPro data highlights the company's volatile stock price movement, with a significant decline of -20.1% over the last week. This follows a pattern of fluctuation, as evidenced by a 45.54% increase in the one-year price total return. These shifts underscore the stock's volatility and the potential risks and opportunities for investors.
Despite these challenges, authID holds a strong liquidity position, with more cash on hand than debt, and liquid assets that exceed its short-term obligations. This financial stability is crucial as the company seeks to expand its operations and customer base.
Investors considering authID should note the company's high valuation multiples, with a Price / Book ratio of 6.97 as of the last twelve months leading up to Q1 2024. Additionally, the company does not pay a dividend, which may influence investment strategies focused on income generation.
For a deeper dive into authID's financial health and strategic positioning, InvestingPro provides additional insights. Subscribers can access exclusive InvestingPro Tips, such as the company's profitability status and valuation multiples, which are critical for making informed investment decisions. There are currently 9 additional tips available for authID on InvestingPro, which can be accessed by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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