Comment on Huddlestock’s Private Placing

Huddlestock announced on Monday, November 13th, that the company has successfully completed a private placement, raising NOK 17.5M in gross proceeds through the allocation of 14,583,333 new shares at a price of NOK 1.2 per share, equivalent to a discount of 19% from the closing price on November 10th (NOK 1.48). Each investor in the private placement will also receive, at no additional cost, 0.5 unlisted warrants per issued and allocated share, with a strike price of NOK 1.80 exercisable from registration and until 12 months after registration, amounting to an additional issuing volume of approximately NOK 13.1M.

On Friday, November 10th, Huddlestock announced its intention to carry out a private placement of new shares targeting both Norwegian and international investors. The application period ran from November 10, 2023, at 16:30 to November 13, 2023, at 08:00. In the private placement, Huddlestock was contemplating offering new shares with gross proceeds of a minimum of NOK 10M and a maximum of NOK 15M.

On Monday, November 13th, Huddlestock announced the successful completion of the Private Placement, wherein the company raised NOK 17,500,000 in gross proceeds. This was achieved by allocating 14,583,333 new shares at a price of NOK 1.20 per share. Each investor received, at no additional cost, 0.5 unlisted warrants per issued share. The warrants have a strike price of NOK 1.80 and can be exercised from registration until 12 months after registration. Following the registration of the private placement, Huddlestocks share capital will amount to NOK 350,507,343, divided into 184,477,549 shares.

The purpose of the private placement was to support growth plans in Germany and expedite sales and onboarding activities related to new customers in the Nordic region.

Analyst Group’s View on the Private Placement:

Throughout the fall Huddlestock has demonstrated high business activity and a strong momentum, including securing two clients for its technological offering, Investment-as-a-Service, within both Wealth and Asset Management and also Corporate Finance. Additionally, Huddlestock entered into a strategic partnership agreement with the Norwegian Block Exchange (NBX), where Huddlestock’s platform will offer investors access to various markets from traditional stocks to tokenized assets, while NBX’s secure digital asset exchange platform provides a safe and efficient way to trade digital assets.

Analyst Group views positively on the fact that Huddlestock has swiftly and effectively executed a capital raising, achieving higher gross proceeds than initially announced and at a relatively low discount, given the current market conditions and risk appetite, which indicates a high interest in Huddlestock. Furthermore, it should be noted that individuals in the board and management have participated in the capital raise, where CEO John E. Skajem, Vision Invest Stavanger AS, a company closely related to Chairman of the Board Øyvind Hovland, and Zolo Konsult AS, a company closely related to CFO Anders Peinert, have collectively been allocated 450,000 shares. Analyst Group views this positively, instilling confidence in the ability to create shareholder value going forward.

The company is expected to strengthen its shareholder base and working capital, which is necessary to fully execute on the growth opportunities Huddlestock possesses, both in the German market and within the Nordic region. Furthermore, the company has the option to raise an additional NOK 13.2 million through the warrants by the end of 2024, consequently reducing the risk of further external capital raising in the future. Moreover, the Analyst Group considers the warrants to be attractively priced (strike price of NOK 1.80), increasing the likelihood of being in the money within 12 months, given Huddlestock’s high activity and position with clear value drivers for the future, potentially leading to a significantly higher stock price.