SpringBig Holdings, Inc., a leading provider of SaaS-based marketing solutions, consumer mobile app experiences, and omnichannel loyalty programs to the cannabis industry, today announced the closing of its $4.0 million public equity offering.
The equity offering, for which Roth Capital Partners acted as sole placement agent, raised gross cash proceeds, before deducting placement agent’s fees and other offering expenses, of approximately $3.0 million. In addition, approximately $1.0 million of the Company’s existing Senior Secured Convertible Note (the “Note”) was cancelled in exchange for shares in the offering at the offering price.
“I am delighted that our secondary offering was fully subscribed and that we were able to complete the transaction as a straight-forward equity offering without the inclusion of warrants or other financial incentives that could potentially have been a future overhang on our stock price,” said Jeffrey Harris, CEO and Chairman of springbig. “We now have a stronger balance sheet and adequate capital to fund our growth initiatives in the future and to beyond the point of generating positive operating cash flow.”
Springbig continues to make significant progress along its path to profitability. The Company expects results for the second quarter of 2023 to be in line with previously issued guidance, calling for revenue in the range $7.3 million to $7.6 million, representing 15% year-on-year growth at the mid-point, and an Adjusted EBITDA loss in the range $(0.9) million to $(1.2) million, representing further improvement compared with the $(1.3) million Adjusted EBITDA loss reported in Q1.
Paul Sykes, springbig’s CFO, added, “We have continued to closely examine our operating expenses in our pursuit of reaching profitability as expediently as possible and have initiated additional cost saving measures during the second quarter, including the elimination of several employee positions. As we enter the third quarter of the fiscal year, we expect our annualized operating expenses to be approximately $25 million, or approximately $6.25 million per quarter, representing a nearly 30% reduction compared with our run-rate during the second half of 2022, and based on current expectations enabling the Company to generate positive Adjusted EBITDA for the third quarter of 2023. Reflecting our revenue growth trajectory, coupled with high gross margins, which reached 81% in the first quarter of 2023, and increasing operating leverage, we expect Adjusted EBITDA margins to expand with each quarter.”
Following completion of the public offering, and payment of $750,000 to further reduce the outstanding principal, the amount remaining outstanding on the Company’s Senior Secured Convertible Note has now reduced to $6.0 million, with $0.5 million repayable during the remainder of the current year, and the balance repayable in approximately equal payments over a fifteen-month period extending to March 2025.
Following the closing of the public offering, the Company has approximately 40.0 million shares issued. The Company’s largest shareholder is Jeffrey Harris, who has a beneficial ownership interest of approximately 15%. The Company has 16.0 million warrants outstanding, dating from its merger, at an exercise price of $11.50 and approximately 0.6 million warrants, held by the Senior Secured Convertible Note holder, at an exercise price of $1.00. The Company also has a Committed Equity Line of Credit with Cantor Fitzgerald, but following the public offering does not have any plans to utilize this in the near future.
About springbig
springbig is a market-leading software platform providing customer loyalty and marketing automation solutions to cannabis retailers and brands in the U.S. and Canada. springbig’s platform connects consumers with retailers and brands, primarily through SMS marketing, as well as emails, customer feedback system, and loyalty programs, to support retailers’ and brands’ customer engagement and retention. springbig offers marketing automation solutions that provide for consistency of customer communication, thereby driving customer retention and retail foot traffic. Additionally, springbig’s reporting and analytics offerings deliver valuable insights that clients utilize to better understand their customer base, purchasing habits and trends. For more information, visit https://springbig.com/.
