DatChat, Inc. Announces Proposed Underwritten Public Offering of Common Stock
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Insights
From a financial perspective, DatChat's decision to undertake a public offering could indicate a strategic move to bolster its capital structure. The offering's success hinges on market receptivity, which is influenced by current economic conditions and investor sentiment towards the tech sector. The timing of the offering, amidst potentially volatile market conditions, suggests a pressing need for liquidity or an opportunity perceived by the company to invest in growth initiatives.
Investors should closely monitor the offering's terms, such as the number of shares and pricing, as these will impact the company's valuation and existing shareholders' equity. The involvement of EF Hutton LLC as the sole book-running manager implies a vote of confidence in the firm's ability to manage the offering effectively. However, the dilutive effect of the new shares could impact current shareholders, potentially leading to short-term price volatility.
The intended use of proceeds for general corporate purposes, research and development (R&D) and sales and marketing signals DatChat's commitment to innovation and market expansion. The emphasis on R&D may be a strategic move to stay relevant in the rapidly evolving tech landscape, particularly within the secure messaging and metaverse spaces. This could position DatChat more favorably against competitors if executed effectively.
Investment in sales and marketing could indicate an aggressive strategy to acquire new users and retain existing ones, crucial for platforms relying on network effects. The potential increase in market share and brand visibility could enhance long-term revenue prospects, provided the marketing efforts translate into user growth and engagement.
DatChat's compliance with SEC regulations, by filing a 'shelf' registration statement, demonstrates adherence to legal protocols for securities offerings. The 'shelf' registration allows the company to offer and sell securities over a prolonged period, offering flexibility in timing the market. Investors should understand that the preliminary prospectus supplement provides important legal disclosures, including risk factors and financial statements, which are critical for informed decision-making.
The effectiveness of the registration statement and the role of the SEC in reviewing the offering documents are meant to protect investors and maintain market integrity. It's imperative for stakeholders to review these documents thoroughly to grasp the potential risks and legal considerations associated with the offering.
New Brunswick, NJ, Jan. 16, 2024 (GLOBE NEWSWIRE) -- DatChat, Inc. (Nasdaq: DATS) (“Datchat” or the “Company”), a secure messaging, social media, and metaverse company, today announced that it intends to offer to sell shares of its common stock in an underwritten public offering. All of the shares of common stock are to be sold by the Company. The offering is subject to market conditions and there can be no assurance as to whether or when the offering may be completed, or as to the actual size or terms of the offering.
EF Hutton LLC is acting as the sole book-running manager for the offering.
DatChat intends to use the net proceeds from the offering for general corporate purposes, research and development, and sales and marketing.
The securities will be offered and sold pursuant to a "shelf" registration statement on Form S-3 (File No. 333-268058), including a base prospectus, filed with the U.S. Securities and Exchange Commission (the “SEC”) on October 28, 2022, as amended on November 18, 2022, and declared effective on December 6, 2022. A preliminary prospectus supplement and accompanying prospectus describing the terms of the offering has been or will be filed with the SEC and will be available on its website at www.sec.gov. Copies of the preliminary prospectus supplement and the accompanying prospectus relating to this offering may also be obtained by contacting EF Hutton LLC Attention: Syndicate Department, 590 Madison Avenue, 39th Floor, New York, NY 10022, by email at syndicate@efhuttongroup.com, or by telephone at (212) 404-7002. Before investing in this offering, interested parties should read in their entirety the preliminary prospectus supplement and the accompanying prospectus and the other documents that the Company has filed with the SEC that are incorporated by reference into such preliminary prospectus supplement and the accompanying prospectus, which provide more information about the Company and such offering.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these 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 any such state or jurisdiction. Any offer, if at all, will be made only by means of the prospectus supplement and accompanying prospectus forming a part of the effective registration statement.
About DatChat Inc.
DatChat Inc. is a secure messaging, metaverse, and social media company that not only focuses on protecting privacy on personal devices, but also protects user information after it is shared with others. The DatChat Messenger & Private Social Network presents technology that allows users to change how long their messages can be viewed before or after users send them, prevents screenshots, and hides encrypted photos in plain sight on camera rolls. DatChat's patented technology offers users a traditional texting experience while providing control and security for their messages. With the DatChat Messenger, a user can decide how long their messages last on a recipient's device, while feeling secure that at any time, they can delete individual messages or entire message threads, making it like the conversation never happened.
Notice Regarding Forward-Looking Statements
The information contained herein includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. These statements include, among others, statements regarding the Company’s online funding portal, the proposed public offering, and the timing and the use of the proceeds from the offering. Forward-looking statements generally include statements that are predictive in nature and depend upon or refer to future events or conditions, and include words such as "may," "will," "should," "would," "expect," "plan," "believe," "intend," "look forward," and other similar expressions among others. These statements relate to future events or to the Company’s future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause the Company’s actual results to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. You should not place undue reliance on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond the Company’s control and which could, and likely will, materially affect actual results, levels of activity, performance or achievements. Any forward-looking statement reflects the Company’s current views with respect to future events and is subject to these and other risks, uncertainties and assumptions relating to the Company’s operations, results of operations, growth strategy and liquidity. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s most recent Annual Report on Form 10-K and other filings with the Securities and Exchange Commission. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. Except as may be required by applicable law, The Company assumes no obligation to publicly update or revise these forward-looking statements for any reason, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, whether as a result of new information, future events or otherwise.
Contact:
ir@datchats.com
800-658-8081
FAQ
What is DatChat, Inc. planning to offer?
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