Blue Hat Announces Pricing of $4.3 Million Registered Direct Offering

Rhea-AI Summary

Blue Hat Interactive Entertainment Technology (NASDAQ: BHAT) has announced a $4.3 million registered direct offering of 77,989,800 Ordinary Shares. The shares are being sold at $0.055 per share to several institutional investors.

The offering is expected to close around January 14, 2025, subject to customary closing conditions. Maxim Group serves as the sole placement agent. The offering is being conducted under a shelf registration statement on Form F-3 that was declared effective by the SEC on January 26, 2024.

The final proceeds will be determined after deducting placement agent fees and other estimated offering expenses.

Positive

• Secured $4.3 million in gross proceeds through institutional investment
• Successfully executed registered direct offering under effective shelf registration

Negative

• Offering price of $0.055 per share indicates significant discount to market value
• Substantial share dilution with issuance of 77,989,800 new ordinary shares
• Additional expenses and fees will reduce net proceeds below $4.3 million

Insights

Financial Analyst

This registered direct offering represents a significant dilution for existing shareholders, with the company issuing 77,989,800 new shares at $0.055 per share - a steep discount to recent trading prices. The pricing implies a substantial 45% discount to the previous closing price, which is concerning.

The $4.3 million capital raise, while providing needed liquidity, comes at a heavy cost to shareholder value. With a market cap of about $10 million, this offering represents roughly 43% dilution. The extremely low offering price suggests significant pressure to raise capital, potentially indicating deeper financial challenges.

For retail investors: Imagine owning a pizza cut into 8 slices. This offering is like cutting those same 8 slices into 14 slices - you still have the same pizza, but each slice is now smaller. Similarly, each share will now represent a smaller ownership stake in the company.

Market Research Analyst

The timing and structure of this offering raises several red flags. Conducting a heavily discounted offering at $0.055 per share for a NASDAQ-listed company suggests severe capital constraints. The involvement of Maxim Group as placement agent typically indicates challenging market conditions for the issuer, as more prestigious investment banks generally avoid such deeply discounted offerings.

The use of a recently effective shelf registration (filed just weeks ago) points to urgency in capital raising. This could signal working capital issues or upcoming obligations requiring immediate funding. The market's reaction will likely be negative, as such offerings typically lead to sustained price pressure due to new shareholders potentially looking to exit at higher prices.

XIAMEN, China, Jan. 13, 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 77,989,800 Ordinary Shares (the “Ordinary Shares”) in a registered direct offering. The Ordinary Shares are being sold at an offering price of $0.055 per share.

The gross proceeds to the Company from the registered direct offering are estimated to be approximately $4.3 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 14, 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

What is the size and price of BHAT's January 2025 registered direct offering?

Blue Hat's registered direct offering consists of 77,989,800 Ordinary Shares at $0.055 per share, totaling approximately $4.3 million in gross proceeds.

When will BHAT's $4.3 million registered direct offering close?

The offering is expected to close on or about January 14, 2025, subject to satisfying 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.

What is the regulatory status of BHAT's January 2025 share offering?

The offering is being conducted under a shelf registration statement on Form F-3 (File No. 333-274893), which was declared effective by the SEC on January 26, 2024.

How will the dilution from BHAT's January 2025 offering affect shareholders?

The issuance of 77,989,800 new Ordinary Shares will result in significant dilution for existing shareholders.