Blue Hat Announces Pricing of $4.4 Million Registered Direct Offering

Rhea-AI Summary

Blue Hat Interactive Entertainment Technology (NASDAQ: BHAT) has announced a $4.4 million registered direct offering of 55,200,000 Ordinary Shares. The shares are being sold at $0.08 per share to several institutional investors. The offering is expected to close around January 7, 2025, subject to customary closing conditions.

Maxim Group is serving as the sole placement agent for the offering. The shares are being offered through 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 offering expenses.

Positive

• Secured $4.4 million in gross proceeds through institutional investment
• Successfully executed registered direct offering with institutional investors

Negative

• Offering price of $0.08 per share indicates low share value
• Significant share dilution with 55,200,000 new ordinary shares being issued
• Additional expenses and fees will reduce the net proceeds below $4.4 million

Insights

Financial Analyst

This <money>$4.4 million</money> registered direct offering represents significant dilution for existing shareholders, with 55.2 million new shares being issued at <money>$0.08</money> per share - a <percent>38%</percent> discount to the current market price. The offering size is particularly notable given BHAT's micro-cap status with a market cap of only <money>$7.7 million</money>.

The capital raise will more than double the company's outstanding shares, severely diluting existing shareholders' ownership. While the fresh capital could provide needed working capital, the heavy dilution and deep discount pricing signals significant financial pressure and weak market confidence. The use of a registered direct offering, typically more expensive than traditional public offerings, further suggests financing options.

The timing of this offering, coming just days after the SEC registration became effective, indicates urgency in raising capital. Institutional investors participating at such a steep discount implies they required significant pricing concessions to participate, reflecting perceived high risk in the investment.

Market Research Analyst

This capital raise exemplifies the challenging environment for micro-cap Chinese companies listed on US exchanges. The extreme dilution and deeply discounted pricing reflect both company-specific challenges and broader market skepticism toward this segment. The involvement of Maxim Group as placement agent adds some credibility, but the offering terms suggest investor appetite.

The market's reaction will likely be negative given the massive share count increase and price implications. For context, this offering effectively values the entire business at a fraction of its already modest market cap, setting a new, lower valuation benchmark. The timing and structure indicate this was likely a last-resort financing option, pointing to potential underlying business stress that investors should monitor closely.

XIAMEN, China, Jan. 06, 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 55,200,000 Ordinary Shares (the “Ordinary Shares”) in a registered direct offering. The Ordinary Shares are being sold at an offering price of $0.08 per share.

The gross proceeds to the Company from the registered direct offering are estimated to be approximately $4.4 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 7, 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 $4.4 million in gross proceeds through a registered direct offering of ordinary shares.

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

The offering price is $0.08 per ordinary share.

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

Blue Hat is issuing 55,200,000 new ordinary shares in the offering.

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

The offering is expected to close on or about January 7, 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.