Wireless Ronin announced last Thursday that it had entered into agreements to sell approximately $1.4 million of its common stock in a registered direct offering – the company will issue 1,738,452 shares of common stock at $0.81 per share and expects net proceeds of approximately $1.2 million, which it plans to use for general corporate purposes, including working capital.A ‘registered direct offering’ is an offering of registered securities by an issuer to a limited number of accredited investors but you have to wonder who would actually buy stock at this valuation.
Roth Capital Partners, LLC acted as the Company’s placement agent for this transaction and earned themselves a nice fat commission in the process. It’s hard for listed companies like Ronin – they live their lives in the (regulatory) spotlight and they cannot make a move without having to, pretty much, declare, what they are up to.
Roth managed to find some investors to buy this stock but you can’t help feeling that they managed to find people with little investor acumen.
We’ve been wrong many times in the past predicting the final demise of Ronin but anyone investing $1.4M at an $18M premoney market capitalisation is smoking something!