CHESAPEAKE, Va. – Greenwave Technology Solutions, Inc. ( NASDAQ:GWAV ), the $11.87M market cap supplier of sustainably sourced metals, has entered into a financing agreement to bolster its rare earth metals recovery and monetization efforts. The company is ready to raise $4 million through a securities purchase agreement with institutional and authorized investors. According to InvestingPro According to the filing, this funding comes at a crucial time as the company has been spending money rapidly and the stock has experienced significant volatility over the past year.
The transaction involves the sale of more than 7.5 million shares of common stock at a price of $0.5302 each, accompanied by warrants to purchase an equal number of shares at the same price, exercisable upon shareholder approval. The offer, which is expected to close on Tuesday, is part of a strategy to strengthen Greenwave’s position in the rare earth metals market, critical for renewable energy and advanced technology applications.
Investors agreed not to short sell the company’s stock while holding the warrants, aligning with Greenwave’s long-term goals and potentially reducing negative stock price movements. Additionally, the forward-looking call feature in the contract allows the company to redeem warrants for cash proceeds of up to $4 million, subject to shareholder approval and an effective registration statement, allowing for growth with minimal dilution.
Dawson James Securities Inc. is serving as the sole placement agent for the transaction, which is being offered pursuant to a registration statement effective April 28, 2023. The warrants and underlying shares of common stock are not being offered pursuant to the registration statement. but through an exemption from registration under the Securities Act of 1933, Greenwave undertook to file a registration statement covering the resale of the issuable shares upon exercise of the warrant within from 20 days after the closing of the offer.
The move comes as Greenwave accelerates initiatives to recover rare earth metals due to global supply chain concerns, particularly China’s 2024 base export restrictions. The company is evaluating the development of a dedicated rare earth recovery facility to meet growing domestic demand. With annual revenue of $33.92 million and a healthy current ratio of 1.52, InvestingPro analysis suggests that the company maintains sufficient liquidity to meet its short-term obligations, although investors should pay attention to its challenging profitability metrics.
Greenwave, based in Chesapeake, VA, operates 13 metal recycling facilities and supplies sustainably sourced metals to steel mills and industry partners. Its strategic positioning near key military and transport hubs strengthens its capabilities in sustainable metal recovery. Trading at a price-to-book ratio of just 0.23, InvestingPro analysis shows that the stock may be undervalued. Subscribers to InvestingPro can access 13 additional investment tips and extensive financial metrics to better assess GWAV’s growth potential in the sustainable metals market.
The information in this article is based on a press release.
In other recent news, Greenwave Technology Solutions, Inc. announced a $4 million offering to certain institutional and authorized investors. The move comes in conjunction with an agreement to sell approximately 7.5 million common shares and related warrants. The company also disclosed an exchange agreement with the holders of certain June 2024 warrants, which led to the issuance of 96% of the shares issuable upon the exercise of these warrants.
At the same time, Greenwave is accelerating its initiative to recover rare earth metals from scrap products, a strategic response to China’s ban on exports of key minerals to the United States. The company has also expanded into wood recycling, which is expected to generate significant revenue.
On the financial front, Greenwave reported record revenues due to increased processing volumes and price jumps. The company also raised approximately $15.3 million through a direct offering and private placement. CEO Danny Meeks converted approximately $17.22 million of the company’s debt into equity, strengthening the company’s financial position.
Furthermore, Greenwave introduced a new series of preferred shares, with the potential goal of raising capital or creating a new ownership structure. Eventually, the company announced expansion plans, including operating a second shredder and expanding its proprietary technology platform, ScrapApp.com. These are recent events at Greenwave.
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