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authID Inc. (NASDAQ:AUID), a Delaware-based software services company with a market capitalization of $52.31 million, has successfully closed a registered offering on April 1, 2025, raising capital through the sale of common stock and pre-funded warrants. The company’s stock has experienced significant volatility, declining 20.3% in the past week alone. According to InvestingPro analysis, authID maintains a strong balance sheet with more cash than debt, though the stock currently trades at a high revenue multiple. The offering, which was announced on March 31, 2025, involved the issuance of 1,361,120 shares of common stock at a price of $4.50 per share, and pre-funded warrants to purchase 450,000 shares of common stock. This capital raise comes at a crucial time, as InvestingPro data shows the company reported a significant EBITDA loss of $14.67 million in the last twelve months, despite maintaining a healthy current ratio of 3.41x.
The pre-funded warrants, provided as an alternative to certain investors, were priced at $4.4999 each, just one-tenth of a cent below the per-share price of the common stock, with an exercise price of $0.0001 per warrant. This strategic pricing allowed authID to cater to a broader range of investment preferences.
The offering was facilitated by Dominari Securities LLC and Madison Global Partners (NYSE:GLP), LLC, acting as co-placement agents. In compensation for their services, the placement agents received fees totaling 7% and 8% of the gross proceeds from the sales they facilitated, respectively. Additionally, authID issued warrants to the placement agents to purchase up to 80,999 shares for Madison and 91,556 shares for Dominari, exercisable at $4.50 per share.
authID also agreed to reimburse the placement agents for legal fees and other expenses, with Madison receiving $100,000 and an advisory fee of $50,000 upon engagement plus $30,000 upon closing. Dominari was reimbursed $100,000 for legal fees and received a 1% management fee on the gross proceeds it raised.
The securities were offered under authID’s existing shelf registration statement and were accompanied by a base prospectus dated December 9, 2024, and a prospectus supplement dated March 31, 2025. The offering aimed to provide the company with additional capital to support its growth initiatives in the prepackaged software industry.
The details of the agreements related to the offering, including the securities purchase agreement, pre-funded warrant, engagement agreements, and placement agency agreement, are filed with the SEC and are integral to understanding the full scope of the transaction. Based on InvestingPro’s Fair Value analysis, the stock appears to be trading below its intrinsic value, with additional insights available in the comprehensive Pro Research Report, which offers detailed analysis of authID among 1,400+ US equities.
Investors and stakeholders can refer to authID’s SEC filings for further information about the offering and the legal opinion of Fleming PLLC regarding the validity of the securities issued. This report is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy any securities.
In other recent news, AuthID Inc. reported its fourth-quarter earnings for 2024, revealing a substantial increase in revenue to $200,000 from $70,000 the previous year. For the full year, the company’s revenue rose to $890,000, up from $190,000 in 2023, despite a drop in annual recurring revenue to $800,000 from $1 million in the prior quarter. AuthID also announced a definitive agreement for a registered direct offering expected to generate approximately $8.15 million through the sale of shares and warrants. The proceeds from this offering are earmarked for working capital and general corporate purposes. Additionally, AuthID has launched Privacy Key, a new biometric authentication product, aiming to enhance security while maintaining data privacy. The company has also formed an Advisory Board with industry experts like Eric Swider and Donald Nitti to expand its market reach. AuthID’s strategic focus includes targeting Fortune 500 companies and developing an identity exchange between the US and Japan. These developments come as the company navigates challenges in maintaining consistent subscription growth and aims to capitalize on emerging opportunities in the biometric authentication market.
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