Blue Hat Announces Pricing of $3.9 Million Registered Direct Offering

Rhea-AI Summary

Blue Hat Interactive Entertainment Technology (NASDAQ: BHAT) has announced a registered direct offering of 55,950,000 Ordinary Shares at $0.07 per share, aiming to raise approximately $3.9 million in gross proceeds. The offering is expected to close around January 10, 2025, subject to customary closing conditions.

The shares are being offered through a shelf registration statement on Form F-3, which was declared effective by the SEC on January 26, 2024. Maxim Group is serving as the sole placement agent for the offering. The company will file a prospectus supplement related to the offering with the SEC.

Positive

• Secured $3.9 million in additional funding through share offering
• Successfully executed registered direct offering with institutional investors

Negative

• Significant shareholder dilution through issuance of 55,950,000 new shares
• Low offering price of $0.07 per share indicates weak market position

Insights

Investment Banking Analyst

This $3.9 million registered direct offering represents a significant dilutive event for BHAT shareholders, with the company issuing 55,950,000 new ordinary shares at $0.07 per share. The pricing reflects a substantial discount to market value, indicating challenging capital-raising conditions. With a market cap of only $5.9 million, this offering will result in massive dilution of approximately 66% to existing shareholders.

The involvement of Maxim Group as placement agent suggests institutional backing, but the deeply discounted price points to weak investor confidence. The shelf registration method (Form F-3) indicates pre-planned financial flexibility, though the execution terms are notably unfavorable. For micro-cap companies like Blue Hat, such heavily dilutive financings often signal serious capital needs and can trigger further share price pressure.

Simply put: The company is selling a large number of new shares at a very low price, which will significantly reduce existing shareholders' ownership percentage. This type of financing typically reflects poorly on a company's financial health and ability to raise capital on better terms.

Corporate Finance Specialist

The structure of this offering raises several red flags. The $0.07 per share price point suggests extreme distress in the company's ability to attract capital on favorable terms. The massive share issuance relative to the company's current market capitalization indicates a desperate need for capital that could potentially reshape the entire ownership structure.

The use of a registered direct offering, while more streamlined than a traditional public offering, typically comes with higher costs and fees. With Maxim Group as placement agent, the net proceeds will be significantly lower than the $3.9 million gross amount after accounting for placement fees and offering expenses. For a company with such a small market cap, these transaction costs represent a material burden.

The rapid execution timeline, with closing expected within two days, suggests urgency in securing funding. This immediacy, combined with the pricing terms, points to potential underlying financial distress that investors should carefully evaluate.

XIAMEN, China, Jan. 08, 2025 (GLOBE NEWSWIRE) -- Blue Hat Interactive Entertainment Technology (“Blue Hat” or the “Company”) (NASDAQ: BHAT), today announced that it has entered into securities purchase agreements with several institutional investors to purchase an aggregate of 55,950,000 Ordinary Shares (the “Ordinary Shares”) in a registered direct offering. The Ordinary Shares are being sold at an offering price of $0.07 per share.

The gross proceeds to the Company from the registered direct offering are estimated to be approximately $3.9 million before deducting the placement agent’s fees and other estimated offering expenses payable by the Company. The offering is expected to close on or about January 10, 2025, subject to the satisfaction of customary closing conditions.

Maxim Group LLC is acting as the sole placement agent in connection with the offering.

The Ordinary Shares are being offered pursuant to a shelf registration statement on Form F-3 (File No. 333-274893), which was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on January 26, 2024. The offering will be made only by means of a prospectus supplement that forms a part of such registration statement.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sales of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. A prospectus supplement relating to the Ordinary Shares will be filed by the Company with the SEC. When available, copies of the prospectus supplement relating to the registered direct offering, together with the accompanying prospectus, can be obtained at the SEC’s website at www.sec.gov or from Maxim Group LLC, 300 Park Avenue, New York, NY 10022, Attention: Syndicate Department, or via email at syndicate@maximgrp.com or telephone at (212) 895-3500.

About Blue Hat

Blue Hat was formerly a provider of communication services, as well as a producer, developer, and operator of AR interactive entertainment games, toys, educational materials and now primarily engage in commodity trading in China. For more information, please visit the Company’s investor relations website at http://ir.bluehatgroup.com. The Company routinely provides important information on its website.

Forward-Looking Statements:

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All forward-looking statements are inherently uncertain as they are based on current expectations and assumptions concerning future events or future performance of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which are only predictions and speak only as of the date hereof. In evaluating such statements, prospective investors should review carefully various risks and uncertainties identified in this release and matters set in the Company’s SEC filings. These risks and uncertainties could cause the Company’s actual results to differ materially from those indicated in its forward-looking statements.

Contact:
Blue Hat Interactive Entertainment Technology
Phone: +86 (592) 228-0010
Email: ir@bluehatgroup.net

FAQ

How much money is BHAT raising in its January 2025 offering?

Blue Hat is raising approximately $3.9 million in gross proceeds through the registered direct offering.

What is the price per share for BHAT's January 2025 offering?

The offering price is $0.07 per Ordinary Share.

How many new shares is BHAT issuing in the January 2025 offering?

Blue Hat is issuing 55,950,000 new Ordinary Shares in the registered direct offering.

When is BHAT's January 2025 share offering expected to close?

The offering is expected to close on or about January 10, 2025, subject to customary closing conditions.

Who is the placement agent for BHAT's January 2025 offering?

Maxim Group is acting as the sole placement agent for the offering.