authID Inc. Plunges 11.06% Amid Share Offering

On April 2, 2025, authID Inc. (AUID) experienced a significant drop of 11.06% in pre-market trading. This decline comes amidst a series of strategic moves by the company, including a recent offering of 1,361,120 shares of common stock and pre-funded warrants to purchase 450,000 shares of common stock. The offering, priced at $4.50 per share, is part of a broader effort to raise capital for general corporate purposes, including working capital and potential strategic investments.

authID Inc. has retained Dominari Securities LLC and Madison Global Partners, LLC as co-placement agents for this offering. The placement agents are not purchasing or selling any shares but have agreed to use their best efforts to arrange for the sale of all the shares. The placement agents will receive fees amounting to 7% of the gross proceeds from the sale of shares sold by Madison and 8% from the sale of shares sold by Dominari. Additionally, Madison will receive a cash fee of 3% of the gross proceeds from the sale of shares to investors introduced by Dominari. The placement agents will also issue warrants to purchase up to 80,999 and 91,556 shares of common stock, respectively, as part of their compensation.

The company's biometric identity platform, which includes services like ProofTM for identity verification and VerifiedTM for identity authentication, has been a key driver of its growth. authID's technology is designed to quickly and accurately verify user identities, eliminating the risks associated with traditional password-based systems. The company's focus on high-speed processing and seamless user experience has positioned it well in the competitive identity verification market.

However, the recent drop in stock price may be attributed to several factors, including market volatility and investor concerns over the dilution of existing shares due to the new offering. The company's net tangible book value per share, as of December 31, 2024, was approximately $0.652, which means that new investors participating in this offering will experience immediate dilution. Additionally, the company's reliance on placement agents and the associated fees could be seen as a potential drag on future earnings.

Despite these challenges, authID Inc. remains optimistic about its future prospects. The company plans to use the net proceeds from this offering to strengthen its financial position and pursue strategic opportunities. With a strong focus on innovation and customer satisfaction, authID Inc. is well-positioned to continue its growth trajectory in the identity verification and authentication market.