NEW YORK - Sharps Technology, Inc. (NASDAQ: STSS), a medical device and pharmaceutical packaging company, has announced the completion of a secured bridge loan financing agreement with institutional investors, amassing approximately $3.5 million in funding. The transaction, which is expected to close today, involves the sale of securities comprising both secured notes and common stock shares or pre-funded warrants.
The bridge financing package includes the sale of $3.5 million in securities, with investors purchasing $1,250 in principal amount of secured notes and 1,628.57 shares of common stock or pre-funded warrants for every $1,000 invested. This results in a total of $4,375,000 in notes and 5,700,006 shares of common stock. The pre-funded warrants are immediately exercisable at a nominal price and are subject to registration rights.
Sharps Technology anticipates using the net proceeds from this offering, along with its existing cash, for general corporate purposes and to bolster working capital. Aegis Capital Corp. has been appointed as the exclusive placement agent for the private placement, while Sichenzia Ross Ference Carmel LLP and Kaufman & Canoles, P.C. are providing legal counsel to Sharps Technology and Aegis Capital Corp., respectively.
The securities in question are being sold in a private placement transaction and have not been registered under the Securities Act of 1933, as amended, or state securities laws. Consequently, they may not be offered or sold in the United States absent registration or an exemption from such requirements. The offer was made solely to accredited investors, with Sharps Technology committing to file registration statements for the resale of the common stock and shares issuable upon the exercise of the pre-funded warrants.
Sharps Technology is known for its patented smart-safety syringe products, which feature both passive and active safety measures and are designed to minimize waste. The company operates a manufacturing facility in Hungary and has a partnership with Nephron Pharmaceuticals to expand its manufacturing capabilities in the U.S.
This press release statement serves as the basis for the presented information and does not constitute an offer to sell or a solicitation of an offer to buy the securities mentioned.
In other recent news, Sharps Technology Inc. is making strategic changes to its corporate structure, with shareholders approving an increase in authorized common stock shares from 100 million to 500 million. This move could potentially allow the company to raise capital through future stock issuances. In addition, the Board of Directors has been granted the discretion to execute a reverse stock split of up to 1-for-8 within a year, aimed at increasing the per-share price of the company's common stock.
Shareholders also approved the issuance of securities at a discount of no more than 20% below the market price, providing flexibility in financing options for non-public offerings. These developments come amidst Sharps Technology's potential delisting from NASDAQ due to non-compliance with listing standards. However, the company intends to file a request for an appeal hearing prior to the imposed deadline.
In the light of these recent developments, Sharps Technology convened a Special Meeting of stockholders, where shareholders voted on these key proposals. A total of 10,391,140 shares were represented at the meeting, achieving a quorum. These developments represent strategic steps by Sharps Technology as it continues to navigate the medical and surgical device market.
InvestingPro Insights
Sharps Technology, Inc. (NASDAQ: STSS) has recently completed a crucial bridge loan financing to enhance its working capital and support general corporate purposes. This strategic financial move comes at a time when the company's market dynamics are of particular interest to investors. As per the latest InvestingPro Data, Sharps Technology holds a market capitalization of $6.75 million, reflecting its size in the competitive medical device landscape.
The company's financial health is a vital aspect to consider. An InvestingPro Tip highlights that Sharps Technology holds more cash than debt on its balance sheet, which is a positive sign for stakeholders concerned about the company’s liquidity and financial resilience. On the other hand, another InvestingPro Tip indicates that the company is quickly burning through cash, which is a potential red flag for long-term sustainability and may justify the need for the recent bridge financing.
InvestingPro Data also reveals some challenges faced by the company. Sharps Technology has not been profitable over the last twelve months, with a negative P/E Ratio of -0.62 and an adjusted P/E Ratio for the last twelve months as of Q2 2024 standing at -0.82. Furthermore, the company's operating income was reported at -$9.04 million for the same period, underscoring the financial hurdles it is working to overcome.
For investors looking to delve deeper into Sharps Technology's financials and future outlook, InvestingPro offers a wealth of additional tips and real-time metrics. There are currently 6 more InvestingPro Tips available, providing a comprehensive analysis of the company's performance and potential investment value.
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