As of February 17, 2025, the day before the amendment, BranchOut had already sold shares under the original ATM Agreement for aggregate gross proceeds of $2,999,995 (1,590,422 shares), effectively exhausting the original $3,000,000 authorization. The prospectus supplement amendment (Amendment No. 1 to the Prospectus Supplement, filed as a 424B5 on February 18, 2025) disclosed that the last reported Nasdaq sale price of BranchOut common stock on February 14, 2025 was $2.42 per share, which was used as the assumed offering price for illustrative calculations in the filing; this is not a fixed or negotiated offering price, since ATM sales occur at prevailing market prices over time rather than in a single priced transaction.
Alexander Capital, L.P. is compensated with a cash commission equal to 3.0% of gross proceeds on each sale made under the ATM Agreement. BranchOut also agreed to reimburse Alexander Capital's counsel fees up to $50,000 in connection with establishing the ATM program and up to $3,000 per quarter thereafter, with total estimated offering-establishment expenses (excluding Alexander Capital's commission) of approximately $75,000. Under the Securities Act, Alexander Capital is deemed to be acting in the capacity of an "underwriter," and its commissions are deemed underwriting discounts, though the program is structured as an agency ATM facility rather than a traditional firm-commitment underwritten offering; there is no greenshoe or over-allotment option, consistent with the continuous, uncapped-timing nature of an ATM program.
BranchOut stated it intends to use net proceeds from sales under the amended ATM program for working capital and general corporate purposes, including operating expenses and capital expenditures. No debt repayment or acquisition-financing use of proceeds was disclosed.
The prospectus supplement amendment included an illustrative dilution analysis. BranchOut's net tangible book value as of September 30, 2024 was approximately $1.525 million, or $0.22 per share. After giving effect to the 1,590,422 shares already sold under the ATM Agreement and the exercise of warrants for 39,747 shares after September 30, 2024, pro forma net tangible book value as of that date was recalculated at $0.51 per share. Assuming a further $2,000,004 of common stock were sold under the amended program at the February 14, 2025 closing price of $2.42 per share (826,448 shares, net offering price of approximately $2.32 per share after commissions and expenses), pro forma as-adjusted net tangible book value was illustrated at approximately $6.3 million, or $0.67 per share, representing an immediate increase of $0.16 per share to existing stockholders and immediate dilution of $1.75 per share to new investors in that illustrative scenario. The filing noted that a $1.00 increase or decrease in the assumed sale price would change dilution to new investors to $2.60 per share or $0.73 per share, respectively. As of February 17, 2025, BranchOut had 8,554,769 shares of common stock outstanding; the filing further disclosed 603,470 shares issuable upon exercise of outstanding stock options (weighted average exercise price $2.39), 108,799 shares reserved under the 2022 Equity Incentive Plan, and 3,422,415 shares issuable upon exercise of outstanding warrants (weighted average exercise price $1.89), none of which are included in the as-adjusted share count.
Pachulski Stang Ziehl & Jones LLP, New York, issued the legal opinion as to the validity of the shares on behalf of BranchOut (the issuer) and is identified in the 8-K and 424B5 as issuer's counsel. Sullivan & Worcester, LLP, New York, is identified in the prospectus supplement as counsel to Alexander Capital, L.P. (the sales agent).
Because this is a continuous ATM program rather than a single priced offering, there is no discrete pricing date, single gross/net proceeds figure, or settlement date for the program as a whole; proceeds and share counts accumulate over time as individual sales occur under transaction notices, settled on a T+1 basis per sale via book-entry through DTC. The filings do not disclose the total amount ultimately raised under the amended $5,000,000 program, the end date of the ATM facility, or any subsequent termination or completion of the program.