Shares of Houston American Energy Corp. (AMEX:HUSA) fell sharply by 20% on Wednesday after the company revealed a registered direct offering worth $2.37 million. This pullback erased much of Tuesday’s substantial 89% rally.
The Texas-based energy firm disclosed that it has entered into a binding agreement with an institutional investor to sell 223,762 shares of common stock—or pre-funded warrants—at $10.60 per share as part of the direct offering. After deducting fees and related expenses, Houston American Energy anticipates net proceeds of approximately $2.1 million.
The company stated that the funds raised will be allocated toward general corporate needs. The deal is expected to close on or around June 20, 2025, pending standard closing conditions.
Notably, the direct offering announcement did not clarify the cause of the previous day’s sharp price surge, which sent shares soaring nearly 90%.