Gelteq signs deal to sell up to $12,000,000 of shares to Lincoln Park

The agreement

Gelteq Limited (Nasdaq: GELS) signed a purchase agreement and a registration rights agreement on March 13, 2025, with Lincoln Park Capital Fund, LLC. Its Form 6-K, filed March 14, 2025 and signed by chief executive Nathan Givoni, says Lincoln Park agreed to buy from time to time up to $12,000,000 of Gelteq's ordinary shares.

Gelteq cannot start selling yet. It must first file a Form F-1 to register the shares for resale, and sales cannot begin until the SEC declares that registration statement effective. The 6-K does not say when that is expected.

How the purchases would work

Over a 24-month term, Gelteq may direct a regular purchase on any business day when its closing price is above $0.25. The base amount is up to 25,000 shares, rising to 35,000 if the closing price is not below $3.00 and to 50,000 if it is not below $4.00. No single regular purchase can exceed $500,000. The price is 95% of the lower of the lowest sale price on the purchase date and the average of the three lowest closing prices over the ten business days before it.

Gelteq may also request accelerated purchases of up to three times the regular amount, capped at 30% of Nasdaq trading volume. On the business day after the commencement date, it may sell $50,000 of shares at the regular-purchase formula, an option available only that day.

Lincoln Park has no right to force sales, but it is obligated to buy the amounts Gelteq directs. It may not own more than 4.99% of the shares unless it gives notice to raise that to 9.99%. Gelteq may end the agreement at any time after the commencement date at no cost or penalty.

Caps and other conditions

Gelteq may not issue more than 1,881,328 shares under the agreement, including commitment shares. That is 19.99% of the shares outstanding on the agreement date, and the filing ties the limit to Nasdaq rules. The cap does not apply if shareholders approve more, or if the average price of all sales equals or exceeds $1.29 per share.

Gelteq issued Lincoln Park 175,000 ordinary shares as commitment shares at signing. Lincoln Park agreed not to short sell or hedge Gelteq's shares. The filing says there are no restrictions on future financings, rights of first refusal, penalties or liquidated damages. The one exception is Gelteq's promise not to enter variable rate transactions with third parties during the 24-month term, subject to exceptions the 6-K does not describe.

What the money is for

Gelteq says any proceeds will fund research and development, marketing and general working capital. The filing does not state how much cash the company held at signing, and it does not estimate how many shares would be sold or what they would raise. It says actual sales depend on market conditions, the trading price and the company's own funding decisions.

The business behind the deal

Its 20-F for the year ended June 30, 2024 says some earlier orders required products from a China-based manufacturing facility. The same report says the company generated no revenue from China-related sales or manufacturing in the years ended June 30, 2024 and June 30, 2023. Revenue from Asian orders was AUD$127,575.58 in the year ended June 30, 2022, just over 85% of that year's revenue. The 20-F says losing the China capacity would have minimal impact over the medium to long term, though it could hurt for 12 months because some Asian clients prefer a China-based maker.

A conditional line, not cash in hand

Nothing can be sold until the F-1 is effective. The 6-K gives no current cash figure to set against the $12,000,000 ceiling. Each sale is priced below recent trading under the 95% formula, and the $1.29 threshold is the level at which the 19.99% cap stops applying without a shareholder vote. Any money would depend on the share price on each purchase date.

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