ParaZero Technologies Ltd. (NASDAQ:PRZO) announced it has entered into a definitive agreement for a registered direct offering with a single institutional investor expected to generate approximately $4 million.
The aerospace and defense technology company will issue 5,333,333 ordinary shares or pre-funded warrants at a price of $0.75 per share, according to a company press release. The offering price represents a discount to the current share price of $1.07, although the company currently holds more cash than debt on its balance sheet. Pre-funded warrants are priced at $0.74999 each and carry an exercise price of $0.00001 per warrant.
The pre-funded warrants will be exercisable immediately and remain valid until they are fully exercised. For every pre-funded warrant issued, the number of ordinary shares offered will decrease on a one-for-one basis.
The transaction is expected to close on or around Tuesday, subject to customary closing conditions. ParaZero said it intends to use the net proceeds, together with existing cash reserves, for general corporate purposes and working capital. The capital raise comes as the company continues to consume cash despite recording revenue growth of about 80% over the past twelve months.
Following completion of the offering, ParaZero expects to have 28,760,239 ordinary shares outstanding, assuming full exercise of the pre-funded warrants issued in the transaction.
Aegis Capital Corp. is acting as the exclusive placement agent for the offering. Greenberg Traurig, P.A. and Gornitzky & Co. are serving as co-counsel to the company, while Kaufman & Canoles, P.C. is acting as legal counsel to Aegis Capital Corp.
The offering is being conducted under an effective shelf registration statement on Form F-3 that was previously filed with the U.S. Securities and Exchange Commission and declared effective on August 16, 2024.
ParaZero develops autonomous safety and defense solutions for both manned and unmanned aerial systems. Its product portfolio includes SafeAir parachute recovery systems, DefendAir counter-UAS platforms and DropAir aerial delivery systems.
In other recent developments, ParaZero reported progress with its DefendAir Counter-Unmanned Aerial Systems (C-UAS) platform. The company said it received a purchase order from an Israeli defense organization that includes an evaluation kit and equipment for live exercises. ParaZero also secured a second order from another division of an Israeli defense entity, covering specialized net-launchers and a full training package.
Additionally, the company entered into a strategic cooperation agreement with BonV Aero, an aerospace and defense technology manufacturer based in India, to market its counter-UAS solutions in the Indian market, with a focus on the DefendAir system.
ParaZero also recently completed a high-speed drone interception test in which its DefendAir system successfully intercepted a drone traveling at 70 miles per hour. The company said the test marked its first successful net-based interception at such speeds, simulating a combat scenario involving a hostile drone and demonstrating the system’s ability to provide real-time protection against fast-moving aerial threats.