Troika Media sells $70 million worth of TRKA shares

Troika Media (NASDAQ:TRKA) the stock is down more than 5% today. The company announced that it would offer up to $70 million in common stock through an offering on the market (ATM). B.Riley Securities will act as agent or principal of the offering and will be entitled to a 5% commission on the gross proceeds of common shares sold.

Proceeds from the offering will be used for general business expenses, such as capital expenditures and working capital. Troika added that she could use part of the proceeds to settle any debts. In addition, he can invest in companies or products that would create synergy. At the date of the announcement, Troika had no intention of satisfying contingent liabilities or making an acquisition.

TRKA Stock: Troika Announces $70 Million ATM Bid

This is not good news for TRKA shareholders, as it means more dilution. The company warned that:

“If you invest in our common stock under this offering, your ownership may be immediately diluted to the extent that the public offering price per share exceeds the unaudited pro forma adjusted tangible net book value per share of our shares. ordinary after this offer.”

As of May 12, there were 413.12 million common shares of TRKA outstanding. Troika’s market capitalization currently sits at around $70 million, the same value as its ATM offering.

Nasdaq sends delisting notice to Troika

Last week, the company announced that it had received a delisting notice from Nasdaq for not trading above $1. Troika said it will appeal the decision through a hearing before the Nasdaq Hearing Panel, which will allow TRKA to remain listed for the time being. Typically, hearings take place approximately 30 to 45 days after a request for hearing is filed. If the request was made on May 18, the day the disbarment notice was announced, that means the hearing will likely be held between June 17 and July 2.

To regain compliance, Troika intends to enact a reverse stock split. The company was unable to initiate a reverse split until March 31 due to its Series E preferred stock stipulations. However, the Troika and the “required parties to these agreements” agreed to rescind non-distribution agreement, effective March 31.

At the date of publication, Eddie Pan held (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.