Golden Matrix Group, Inc. (NASDAQ:GMGI), a Las Vegas-based software services company, disclosed on Monday an agreement to potentially sell up to $20 million of its common stock. The Equity Distribution Agreement, dated November 22, 2024, was established with Craig-Hallum Capital Group LLC, which will act as the sales agent.
The sales are to be made under the company's existing Registration Statement on Form S-3, which became effective on May 3, 2022. The shares will be offered in accordance with a prospectus supplement filed on the same date as the agreement.
Under the terms, Golden Matrix may, at its discretion, instruct Craig-Hallum to sell shares by methods considered "at the market," including transactions on The Nasdaq Capital Market where the company's stock is listed. The agreement specifies that Craig-Hallum will execute sales based on parameters set by Golden Matrix, such as the number of shares and minimum sale price, using commercially reasonable efforts.
The company has not committed to selling any specific number of shares and may terminate the agreement at any time, as can Craig-Hallum. The financial terms include a 3.00% commission to Craig-Hallum on gross proceeds and reimbursement of certain expenses.
Golden Matrix intends to use the net proceeds for general corporate purposes, which may encompass working capital and capital expenditures. However, there is no guarantee of the volume of stock that will be sold or the timing of any sales.
This report is based on a press release statement and the company has emphasized that this announcement does not constitute an offer to sell or a solicitation of an offer to buy any securities.
In other recent news, Golden Matrix Group has amended its agreement with investor Lind Global Asset Management VIII LLC, modifying the terms of a $12 million secured convertible promissory note. The company has partially settled an amortization payment with its common stock and cash, and adjusted the conditions for default related to its market capitalization.
In line with its growth strategy, Golden Matrix has launched an AI-powered Bet Recommender through its sports betting division, Meridianbet, and acquired an 80% controlling stake in Australian online discount platform, Classics for a Cause Pty Ltd. The company has also seen a change in its CFO position, with Weiting 'Cathy' Feng stepping into the role.
Meridianbet has been shortlisted for a sports betting and iGaming license in Brazil and secured a sports-betting license to operate in South Africa. Additionally, Golden Matrix has received shareholder approval for the acquisition of MeridianBet Group. These are all recent developments in the company's operations.
InvestingPro Insights
Golden Matrix Group's recent agreement to potentially sell up to $20 million of its common stock comes at an interesting time for the company. According to InvestingPro data, GMGI has a market capitalization of $348.04 million and is currently trading at a P/E ratio of 6.86, which suggests a relatively low valuation compared to its earnings. This could make the potential stock sale attractive to investors looking for value opportunities.
InvestingPro Tips highlight that GMGI has experienced a strong return over the last month, with a 21.62% price total return. This recent positive momentum might help the company achieve better pricing for its shares under the new agreement. However, it's worth noting that the stock has taken a significant hit over the last six months, with a -50.91% price total return over that period.
The company's decision to raise capital through this equity distribution agreement aligns with an InvestingPro Tip indicating that GMGI operates with a moderate level of debt. This move could potentially help the company maintain financial flexibility while pursuing its general corporate purposes and capital expenditures.
For investors considering GMGI, InvestingPro offers 11 additional tips that provide further insights into the company's financial health and market position. These additional tips can be valuable for those looking to make informed investment decisions in light of this new stock offering.
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