Chanson International Holding Announces Pricing of $7.274 Million Public Offering

Rhea-AI Summary

Chanson International Holding (Nasdaq: CHSN), a bakery and beverage chain store operator in China and the US, has priced a public offering of 8,980,251 Class A ordinary shares and an equal number of common warrants. The combined offering price is $0.81 per share and accompanying warrant, with the warrants having an exercise price of $0.972 per share. The company expects to raise gross proceeds of $7.274 million before expenses and commissions. The offering is set to close around September 17, 2024. Chanson plans to use the net proceeds for opening new stores in China and the US. Joseph Stone Capital, is the exclusive placement agent for this best-efforts offering.

Positive

• Raised $7.274 million in gross proceeds from the public offering
• Funds to be used for expanding store network in China and the US
• Successful pricing of the offering indicates investor interest

Negative

• Potential dilution of existing shareholders due to new share issuance
• Offering price of $0.81 per share may be below current market price
• Best-efforts offering structure may not guarantee full subscription

Insights

Financial Analyst

Chanson International's $7.274 million public offering signals a significant capital raise but at a steep discount. The $0.81 per share price is substantially below the stock's recent trading levels, indicating potential dilution for existing shareholders. The inclusion of warrants at $0.972 exercise price suggests the company's struggle to attract investors without additional incentives. This offering structure typically points to financial distress or urgent capital needs. The planned use of proceeds for store expansion in China and the U.S. hints at an aggressive growth strategy, but investors should scrutinize whether this expansion is prudent given the apparent funding challenges. The involvement of a lesser-known placement agent, Joseph Stone Capital, rather than a major investment bank, may also raise questions about the deal's quality and the company's standing in the financial markets.

Retail Market Analyst

Chanson's expansion plans in both China and the U.S. reflect an ambitious cross-continental strategy in the competitive bakery and beverage sector. However, the timing and scale of this expansion are concerning given the current economic headwinds in both markets. China's consumer spending has been sluggish, while the U.S. faces inflationary pressures affecting discretionary spending. The company's ability to successfully execute this expansion with the funds raised ($7.274 million gross) is questionable. Investors should consider whether Chanson has the operational expertise to manage growth in two vastly different markets simultaneously. The low offering price of $0.81 per share also suggests weak market confidence in Chanson's prospects, which could impact brand perception and customer acquisition efforts in new locations.

Legal Expert

The structure of Chanson's offering raises regulatory and compliance considerations. The use of a best-efforts public offering, rather than a firm commitment underwriting, indicates lower confidence from financial intermediaries. This approach shifts more risk to the issuer and potentially to investors. The inclusion of warrants complicates the capital structure and could lead to future dilution if exercised. Investors should carefully review the final prospectus for full risk disclosures. The company's dual-market presence in China and the U.S. also presents complex regulatory challenges, particularly in light of ongoing U.S.-China tensions and increased scrutiny of Chinese companies listed on U.S. exchanges. Chanson must navigate differing accounting standards, disclosure requirements and potential geopolitical risks that could impact its operations and investor relations.

URUMQI, China, Sept. 16, 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 pricing 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 expects to receive aggregate gross proceeds of $7.274 million from the Offering, before deducting offering expenses and commissions, excluding the exercise of any Common Warrants.

The Offering is expected to close on or about September 17, 2024, subject to the satisfaction of customary closing conditions. 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 is acting 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 is being made only by means of a prospectus that forms a part of the registration statement. A final prospectus relating to the Offering will be filed with the SEC and will be available for free on the SEC's website, located at www.sec.gov. Copies of the prospectus, when available, 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.

Before you invest, you should read the prospectus and other documents the Company has filed or will file with the SEC for more information about the Company and the Offering. 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, including, but not limited to, the Company's proposed Offering. 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, including the expectation that the Offering will be successfully completed. 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

What is the size of Chanson International Holding's (CHSN) recent public offering?

Chanson International Holding (CHSN) priced a public offering of 8,980,251 Class A ordinary shares and an equal number of common warrants, raising gross proceeds of $7.274 million.

What is the pricing of CHSN's September 2024 public offering?

The combined offering price is $0.81 per Class A ordinary share and accompanying warrant, with the warrants having an exercise price of $0.972 per share.

How does Chanson International Holding (CHSN) plan to use the proceeds from its 2024 offering?

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

When is the expected closing date for Chanson International Holding's (CHSN) public offering?

The public offering for Chanson International Holding (CHSN) is expected to close on or about September 17, 2024, subject to customary closing conditions.