CISO Global secures $15 million convertible preferred stock facility

SCOTTSDALE, AZ - Cybersecurity provider CISO Global (NASDAQ:CISO), currently valued at $35.75 million in market capitalization, announced Monday it has entered into a private financing arrangement with a fund managed by B. Riley Securities Holdings, Inc., giving the company access to up to $15 million through a convertible preferred stock facility. According to InvestingPro analysis, the company appears undervalued based on its Fair Value assessment, though it faces significant operational challenges with a weak financial health score.

The 18-month facility allows CISO to draw funds at its discretion, starting with an initial increment of $2.3 million followed by weekly draws of up to $500,000, subject to certain conditions. The convertible preferred stock has a stated value of $1,000 per share and will be sold at a 4% original issue discount. This financing comes at a crucial time, as InvestingPro data shows the company’s current ratio stands at 0.19, indicating significant short-term liquidity challenges.

According to the company’s press release, CISO is not obligated to utilize any portion of the facility, and B. Riley cannot initiate draws. The company plans to use proceeds to fund expansion initiatives, particularly scaling its cybersecurity software business in the insurance channel through its relationship with CAGI. This expansion push comes amid challenging financial performance, with revenue declining by 11.92% in the last twelve months to $28.79 million.

The preferred stock is convertible into common shares at 105% of the lowest daily VWAP over five trading days prior to conversion for the initial draw, and 95% for subsequent draws, subject to a $0.40 floor price. Conversion is permitted after an effective SEC registration statement is in place.

"This investment represents an important step forward for CISO Global and enables us to accelerate the growth of our software business," said David Jemmett, CEO of CISO Global. Despite recent challenges, the stock has shown strong momentum with a 138% price return over the past six months. Get deeper insights into CISO’s financial health metrics and growth potential with InvestingPro, which offers 10 additional key investment tips for this security.

The transaction includes ownership limitations, with a 9.99% beneficial ownership cap and a 19.99% blocker provision to comply with NASDAQ listing rules.

B. Riley Securities acted as sole placement agent for the transaction. The securities have not been registered under the Securities Act of 1933 and may not be offered or sold in the United States without registration or an applicable exemption.

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