Fluent raises $10.3 million in private placement of stock and warrants

NEW YORK - Fluent, Inc. (NASDAQ:FLNT), a commerce media solutions provider with a current market capitalization of $47.79 million, announced Tuesday it has entered into a definitive agreement to sell approximately 5.87 million shares of common stock at $1.75 per share in a private placement. According to InvestingPro data, the company has been experiencing significant cash burn, making this capital raise crucial for its operations.

The transaction includes accompanying warrants with an exercise price of $2.21 per share that will become exercisable after six months and expire five years after initial exercisability. The placement also includes pre-funded warrants with a nominal exercise price of $0.0005.

The private placement is expected to close Tuesday, subject to customary closing conditions. The company anticipates gross proceeds of approximately $10.3 million before deducting placement agent fees and other expenses. If all warrants are fully exercised on a cash basis, Fluent could receive additional gross proceeds of approximately $13 million. With a debt-to-equity ratio of 1.22 and negative EBITDA of -$11.04 million in the last twelve months, this financing could provide essential working capital. InvestingPro subscribers can access 8 additional key financial health indicators and a comprehensive Pro Research Report for deeper analysis.

The Benchmark Company, LLC is acting as the sole placement agent for the offering, with its Kestrel Merchant Partners group sourcing and executing the transaction. An affiliate of Kestrel is participating as an investor in the placement.

Fluent CEO Don Patrick noted that the company’s Commerce Media Solutions business has experienced "triple digit growth" as more brands select Fluent for commerce media needs. The capital will be used for working capital and general corporate purposes, according to the company.

The securities were offered under Section 4(a)(2) of the Securities Act of 1933 and have not been registered, limiting their resale in the United States. Fluent has agreed to file a registration statement covering the resale of these shares within 30 days.

Fluent connects brands with consumers through its commerce media solutions and uses proprietary machine learning and first-party data to drive customer acquisition for advertisers. Despite generating $243.85 million in revenue, the company faces challenges with its gross profit margin of 21.98%. InvestingPro analysis indicates the stock is currently trading at a low revenue valuation multiple, suggesting potential value opportunity for investors who can tolerate the risks associated with the company’s financial position.

This announcement was made in a press release statement from the company.

In other recent news, Fluent, Inc. announced an expanded partnership with Authentic Brands Group to enhance its commerce media network. This development follows successful campaigns with several of Authentic’s brands, including Eddie Bauer, Nautica, Lucky Brand, and Aéropostale. The partnership will now include additional brands such as Reebok, Vince Camuto, Volcom, Champion, RVCA, and DC Shoes. This expansion aims to bring more iconic brands into Fluent’s network, potentially increasing its reach and influence in the market. The collaboration between Fluent and Authentic Brands Group highlights a strategic move to leverage popular brands for broader consumer engagement. These recent developments indicate Fluent’s ongoing efforts to strengthen its partnerships and expand its brand portfolio.

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