Case Study – Upsized $60 Million Capital Raise in a Challenging Equity Marketplace NASDAQ Listed $480 Million Microcap Industrial Clean Tech Company
Case Study – Upsized $60 Million Capital Raise in a Challenging Equity Marketplace NASDAQ Listed $480 Million Microcap Industrial Clean Tech Company

Assignment and Challenges

Our client a $480 million NASDAQ industrial clean-tech company was looking to do a $60 million capital raise in a difficult equity capital market environment. 2023 saw unsettled markets troubled by rising interest rates, inflation, and persistent geopolitical instability. These issues combined with a dormant IPO market made this assignment particularly complex.

Solution

Long-term IR Foundation: LHA has partnered with this client with a comprehensive investor relations strategy since 2018. LHA consistently crafted communications and expanded relationships with covering analysts and key investors as the company navigated through competitive and covid challenges.

Communicating the Rebuilding Strategy: The company was rebuilding, diversifying its product portfolio, implementing internal innovation, and had made two strategic acquisitions. LHA provided effective counsel, shaping communications and maintaining a high level of sensitivity to analysts’ and shareholders’ interests.

In 2023, the client gathered momentum in order bookings and revenue growth as well as leveraged its more efficient operating model to deliver sharply improved gross and operating profitability. These efforts drove two consecutive quarters of positive cash flow, the first quarterly profit since 2010 and a substantial December quarter positive surprise.

LHA provided effective counsel, shaping communications, and maintaining a high level of sensitivity to analysts’ and shareholders’ interests.

Maximizing Positive Results: As the company’s momentum built in the second half of calendar 2023, LHA and the client orchestrated a communications strategy of carefully timed and messaged positive news flow. The messaging underscored strong demand in the company’s broadened addressable markets, robustness of new order flow and emphasized its improved execution. The combination of management’s execution, the December quarter beat a robust forecast and this effective communications strategy drove the stock to more than double.

Result

This trajectory plus investors’ appetite for turnaround stories culminated in the client, in partnership with investment bankers Oppenheimer & Co, Craig-Hallum Capital Group and Roth MKM, completing an upsized $60 million offering of common stock, adding to an existing cash balance of $25 million at the end of the December quarter to support future growth.

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LHA Investor Relations is a leading strategic IR consulting agency. We partner with public and private companies to craft and implement effective, custom-designed IR programs that incorporate industry best practices. We are a leader in investor relations for small-cap companies for over 40 years. We go beyond in implementing IR programs that build trust and transparency between our clients and Wall Street. We support capital market objectives by increasing awareness, managing expectations and enhancing reputations.

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