SEALSQ Announces Signing of a Term Sheet for the Third $10.0 Million Tranche of Convertible Notes and Warrants Private Placement
February 21 2024 - 9:00AM
SEALSQ Corp (Nasdaq: LAES) (“SEALSQ” or “Company”), a leader in
semiconductor, PKI, and Post-Quantum technology development, today
announced the signing of a non-binding term sheet for a third
tranche of a private placement, amounting to $10 million, which is
part of the Company's private placement pursuant to the securities
purchase agreement entered into on July 11, 2023 and first amended
on January 9, 2024 with a select group of institutional investors
solicited by a placement agent (the “Investors”). The closing of
the third tranche is subject to the completion of an amendment to
the securities purchase agreement, other definitive legal
documentation and the satisfaction of certain closing conditions,
including approval by our board of directors. Of note, the first
$10 million tranche under this securities purchase agreement has
been repaid (in the form of the Company’s Ordinary Shares) with
slightly more than 50% of the second tranche of $10 million still
outstanding.
The term sheet provides for a discount of 2.5%
on the Senior Unsecured Original Issue Convertible Promissory Notes
(“Notes”) meaning gross proceeds should be approximately $9.75
million. The 24-month maturity Notes, bearing an interest rate of
4% per annum, will be convertible into SEALSQ's Ordinary Shares at
an initial conversion price equal to the lesser of $5.50 per
Ordinary Share or 93% of the lowest daily volume weighted average
price of the ordinary shares during the ten trading days
immediately preceding the notice of conversion of the Notes,
subject to adjustment as further specified in the Notes. The Notes
will be fully repayable in cash upon maturity. In addition, each
Investor will have the option of prepayment of up to 15% of the
issuance amount out of the proceeds of any subsequent financing.
The Investors have agreed to use commercially reasonable efforts to
limit their sale of shares received under the third tranche and any
subsequent tranches in a weekly quantity not to exceed 10% of the
average weekly trading volume of the Ordinary Shares on the Nasdaq
in that week.
Under the terms of the term sheet, each Investor
will receive five-year warrants for shares equivalent to 30% of the
Principal Amount of such Investor’s respective Note divided by the
VWAP of the Ordinary Shares as of the trading date prior to the
date of funding of the applicable subscription amount with an
exercise price of $5.50.
This term sheet allows for a potential fourth
and fifth funding tranche of up to $10 million each, if mutually
agreed to by each Investor and the Company, subject to an original
issue discount and other agreed conditions.
Maxim Group LLC served as the sole placement
agent for this private placement.
After the closing of the third tranche, SEALSQ
will file a registration statement for the resale of shares
issuable upon conversion of the Notes and exercise of the
warrants.
The net proceeds from this financing will be
strategically allocated to several key areas:
- Investment in post-quantum
semiconductor technology, slated for commercial launch in
2025.
- Expansion of U.S. operations,
including the establishment of a new office in the U.S.,
recruitment of top-tier talent, and enhancement of the sales force
to cater to the growing American market.
- Upgrading production facilities in
the U.S. and France with advanced manufacturing and testing
equipment to heighten efficiency and mitigate semiconductor
production localization risks.
- Continued development of a novel
machine-to-machine token, SEALCOIN. SEALCOIN is designed as a
groundbreaking solution for the emerging Machine-to-Machine (M2M)
economy, facilitating seamless data and currency exchanges among
billions of internet-connected devices. This innovative protocol
enables IoT structures from various companies to autonomously
interact and access a wide range of services, transcending
conventional currency exchange to encompass a complex network of
IoT-enabled transactions and services. While individual traders can
engage with SEALCOIN similarly to other cryptocurrencies, its
principal value lies in transforming the economic operations and
communications within IoT devices.
SEALSQ is progressively establishing its
presence in the United States, with plans to set up a center
specializing in personalized semiconductors, supported by new
funding.
Carlos Moreira, CEO of SEALSQ, highlighting the
Company's leadership in quantum-ready semiconductor technology and
its strategic positioning for significant growth, spurred by the
latest funding round, noted, “This expansion is aligned with the
growing importance of quantum computing, which is expected to
significantly impact the global economy, with the market forecasted
to reach $65 billion by 2030. SEALSQ aims to leverage this growth
by developing cutting-edge technology to attract new clients and
increase revenue in this burgeoning field.”
Quantum computing, particularly in the realm of
quantum semiconductors, is identified by experts as a key area for
growth in the coming years. Its potential to transform industries
such as finance, healthcare, and AI by addressing complex problems
more efficiently is considered substantial.
About SEALSQ:SEALSQ focuses on
selling integrated solutions based on Semiconductors, PKI and
Provisioning services, while developing Post-Quantum technology
hardware and software products. Our solutions can be used in a
variety of applications, from Multi-Factor Authentication tokens,
Smart Energy, Smart Home Appliances, and IT Network Infrastructure,
to Automotive, Industrial Automation and Control Systems.
Post-Quantum Cryptography (PQC) refers to
cryptographic methods that are secure against an attack by a
quantum computer. As quantum computers become more powerful, they
may be able to break many of the cryptographic methods that are
currently used to protect sensitive information, such as RSA and
Elliptic Curve Cryptography (ECC). PQC aims to develop new
cryptographic methods that are secure against quantum attacks.
For more information please
visit www.sealsq.com.
Forward-Looking Statements
This communication expressly or implicitly
contains certain forward-looking statements concerning SEALSQ Corp
and its businesses. Forward-looking statements include statements
regarding our business strategy, financial performance, results of
operations, market data, events or developments that we expect or
anticipates will occur in the future, as well as any other
statements which are not historical facts. Although we believe that
the expectations reflected in such forward-looking statements are
reasonable, no assurance can be given that such expectations will
prove to have been correct. These statements involve known and
unknown risks and are based upon a number of assumptions and
estimates which are inherently subject to significant uncertainties
and contingencies, many of which are beyond our control. Actual
results may differ materially from those expressed or implied by
such forward-looking statements. Important factors that, in our
view, could cause actual results to differ materially from those
discussed in the forward-looking statements include SEALSQ’s
ability to implement its growth strategies; SEALSQ’s ability to
successfully launch post-quantum semiconductor technology; SEALSQ’s
ability to capture a share of the quantum semiconductor market; the
growth of the quantum computing market; SEALSQ’s ability to expand
its U.S. operations; SEALSQ’s ability to enhance its production
facilities in the U.S. and France; SEALSQ’s ability to make
additional investments towards the development of a new generation
of quantum-ready semiconductors; the success of SEALCOIN; SEALSQ’s
ability to continue beneficial transactions with material parties,
including a limited number of significant customers; market demand
and semiconductor industry conditions; the growth of the quantum
computing market; and the risks discussed in SEALSQ’s filings with
the SEC. Risks and uncertainties are further described in reports
filed by SEALSQ with the SEC.
SEALSQ Corp is providing this communication as of this date and
does not undertake to update any forward-looking statements
contained herein as a result of new information, future events or
otherwise.
SEALSQ
Corp.Company Contact: Carlos MoreiraChairman & CEOTel:
+41 22 594 3000info@sealsq.com |
SEALSQ Investor Relations
(US)Contact: Lena CatiThe Equity Group Inc.Tel: +1 212
836-9611lcati@equityny.com |
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