Chanson International Holding Announces Closing of $7.274 Million Public Offering

Rhea-AI Summary

Chanson International Holding (Nasdaq: CHSN), a provider of bakery, seasonal, and beverage products through chain stores in China and the US, has closed a public offering raising $7.274 million. The offering included 8,980,251 Class A ordinary shares and an equal number of common warrants at a combined price of $0.81 per share and warrant. The warrants have an exercise price of $0.972 per share. Joseph Stone Capital, acted as the exclusive placement agent. Chanson plans to use the net proceeds for opening new stores in China and the US. The offering was made through a registration statement on Form F-1 declared effective by the SEC on September 12, 2024.

Positive

• Successful closing of a $7.274 million public offering
• Funds to be used for expansion through new store openings in China and the US
• Inclusion of warrants may provide additional future funding if exercised

Negative

• Potential dilution of existing shareholders due to the issuance of new shares
• Offering price of $0.81 per share may indicate a discount to market price
• Additional expenses and commissions will reduce the net proceeds available for expansion

Insights

Financial Analyst

Chanson International Holding's $7.274 million public offering provides important capital for expansion but comes at a cost. The offering price of $0.81 per share and warrant is significantly below the current market price, indicating substantial dilution for existing shareholders. The warrant exercise price of $0.972 suggests upside potential in the near term. While the funds will support store openings in China and the U.S., the dilutive nature of the offering may pressure the stock price. Investors should closely monitor the company's ability to effectively deploy this capital and generate returns that justify the dilution. The best-efforts basis of the offering also raises questions about investor confidence and market demand for CHSN shares.

Market Research Analyst

This capital raise reflects Chanson's aggressive expansion strategy in both China and the U.S. markets. The company's focus on bakery and beverage products aligns with growing consumer trends in both regions. However, the challenging economic environment in China and increased competition in the U.S. bakery market pose significant risks. The success of this expansion will heavily depend on Chanson's ability to differentiate its offerings and adapt to local tastes. Investors should watch for key performance indicators such as same-store sales growth and new store productivity in the coming quarters to gauge the effectiveness of this capital deployment. The company's dual-market strategy could provide diversification benefits but also increases operational complexity.

Legal Expert

The closing of this public offering marks a significant milestone for Chanson, but it also brings increased regulatory scrutiny. As a Nasdaq-listed company, Chanson must maintain strict compliance with SEC regulations and Nasdaq listing requirements. The use of a Form F-1 registration statement indicates the company's status as a foreign private issuer, which carries certain reporting advantages but also unique obligations. Investors should be aware that the best-efforts nature of the offering provides less certainty compared to a firm commitment underwriting. The inclusion of warrants in the offering structure adds complexity to the company's capital structure and potential future dilution scenarios. Shareholders should carefully review the prospectus for full disclosure of risks and use of proceeds.

URUMQI, China, Sept. 17, 2024 (GLOBE NEWSWIRE) -- Chanson International Holding (Nasdaq: CHSN) (the "Company" or "Chanson"), a provider of bakery, seasonal, and beverage products through its chain stores in China and the United States, today announced the closing of a best-efforts public offering (the “Offering”) of 8,980,251 Class A ordinary shares (“Class A Ordinary Shares”) of the Company, and 8,980,251 common warrants (“Common Warrants”) to purchase 8,980,251 Class A Ordinary Shares, at a combined offering price of $0.81 per share and accompanying warrant. The Common Warrants have an exercise price of $0.972 per share. The Company received aggregate gross proceeds of $7.274 million from the Offering, before deducting offering expenses and commissions, excluding the exercise of any Common Warrants.

The Company intends to use the net proceeds from the Offering for opening new stores in China and in the U.S.

Joseph Stone Capital, LLC acted as the exclusive placement agent for the Offering.

A registration statement on Form F-1, as amended (File Number: 333-281732) relating to the Offering was filed with the U.S. Securities and Exchange Commission (the “SEC”), and was declared effective by the SEC on September 12, 2024. The Offering was made only by means of a prospectus that forms a part of the registration statement. Copies of the prospectus may be obtained from: Joseph Stone Capital, LLC, 29 Broadway, #1800, New York, New York, 10006, or by email at corporatefinance@josephstonecapital.com, or by calling 888-302-5548. In addition, copies of the prospectus relating to the Offering may be obtained via the SEC's website at www.sec.gov.

This press release does not constitute an offer to sell, or the solicitation of an offer to buy any of the Company's securities, nor shall there be any offer, solicitation or sale of any of the Company's securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction.

About Chanson International Holding

Founded in 2009, Chanson International Holding is a provider of bakery, seasonal, and beverage products through its chain stores in China and the United States. Headquartered in Urumqi, China, Chanson directly operates stores in Xinjiang, China and New York, United States. Chanson currently manages 46 stores in China, and three stores in New York City while selling on digital platforms and third-party online food ordering platforms. Chanson offers not only packaged bakery products but also made-in-store pastries and eat-in services, serving freshly prepared bakery products and extensive beverage products. Chanson aims to make healthy, nutritious, and ready-to-eat food through advanced facilities based on in-depth industry research, while creating a comfortable and distinguishable store environment for customers. Chanson's dedicated and highly-experienced product development teams constantly create new products that reflect market trends to meet customer demand. For more information, please visit the Company's website: http://ir.chanson-international.net/.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the SEC.

For investor and media inquiries, please contact:

Chanson International Holding
Investor Relations Department
Email: IR@chansoninternational.com

Ascent Investors Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com

FAQ

How much did Chanson International Holding (CHSN) raise in its recent public offering?

Chanson International Holding (CHSN) raised $7.274 million in gross proceeds from its recent public offering.

What was the structure of Chanson International Holding's (CHSN) public offering on September 17, 2024?

The offering included 8,980,251 Class A ordinary shares and 8,980,251 common warrants at a combined price of $0.81 per share and accompanying warrant.

How does Chanson International Holding (CHSN) plan to use the proceeds from its public offering?

Chanson International Holding (CHSN) intends to use the net proceeds from the offering for opening new stores in China and the United States.

What is the exercise price of the warrants issued in Chanson International Holding's (CHSN) September 2024 offering?

The common warrants issued in Chanson International Holding's (CHSN) offering have an exercise price of $0.972 per share.