Fitell Corporation announces $10M registered direct offering

TAREN POINT, Australia - Fitell Corporation (NASDAQ: FTEL), an Australian online retailer specializing in gym and fitness equipment with a current market capitalization of $126 million, has entered into a definitive agreement for a registered direct offering that is expected to generate approximately $10 million in gross proceeds. According to InvestingPro data, the company maintains a strong liquidity position with current assets exceeding short-term obligations by more than four times. The transaction involves the sale of nearly 2 million ordinary shares, along with warrants to purchase an equal number of shares, at a price of $5.02 each. These warrants can be exercised immediately and will expire five years from the date of issuance.

The offering is scheduled to close on or around February 10, 2025, with the fulfillment of customary closing conditions. Rodman & Renshaw LLC is serving as the exclusive placement agent for the offering.

The company has stated that the net proceeds from the offering will be used primarily for the development and commercial launch of smart fitness equipment. Additionally, funds will be allocated for general corporate purposes and working capital. This capital raise comes at a challenging time for the company’s stock, which has declined over 55% in the past six months. InvestingPro analysis suggests the stock is currently trading above its Fair Value, with 12 additional ProTips available to subscribers covering various aspects of the company’s performance and financial health. Fitell also indicated that a portion of the proceeds might be used to acquire or invest in complementary businesses, technologies, or other intellectual property, although there are no current commitments or agreements in place for such transactions.

Fitell’s offering is being conducted under a shelf registration statement on Form F-3, which was initially filed with the Securities and Exchange Commission (SEC) on January 10, 2025, and declared effective on February 5, 2025. The securities are being offered through a prospectus supplement that forms part of the effective registration statement.

Fitell Corporation operates through its wholly owned subsidiary, GD Wellness Pty Ltd, and has a history of serving over 100,000 customers, many of whom are repeat buyers. The company’s product range includes proprietary brands such as Muscle Motion, Rapid Motion, and FleetX, encompassing over 2,000 stock-keeping units (SKUs). With annual revenue of $4.47 million, Fitell remains a niche player in the fitness equipment industry. Discover more detailed financial metrics and industry analysis with a subscription to InvestingPro, including exclusive insights and advanced valuation tools.

This announcement is based on a press release statement from Fitell Corporation and does not constitute an offer to sell or a solicitation of an offer to buy any securities. The sale of securities described in the press release is not permitted 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.

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