Shares of Allot Ltd. (NASDAQ:ALLT) declined by 13% following the announcement of its underwritten public offering priced at $8.00 per share, marking a steep discount compared to the previous close of $9.61.
The company, which specializes in network intelligence and security solutions, is offering 5 million ordinary shares, with an additional option for underwriters to buy up to 750,000 more shares. The offering is expected to raise approximately $40 million in gross proceeds before underwriting fees and expenses.
Allot intends to use most of the net proceeds to repay $31.41 million in principal on its senior unsecured convertible promissory note owed to its largest investor, Lynrock Lake Master Fund LP. The remaining funds will support general corporate needs.
As part of the offering arrangement, Lynrock has agreed to convert the remaining $8.59 million principal balance of the note into 1,249,995 ordinary shares. Lynrock has also committed to a 75-day lock-up period with the underwriters concerning these shares.
Once the repayment and conversion of the Lynrock note are complete, Allot will be free of any borrowed debt. The offering is slated to close around June 26, 2025, pending standard closing conditions.