Dogness Announces Closing of US$5.0 Million Private Placement

Rhea-AI Summary

Dogness (NASDAQ: DOGZ) has completed a $5.0 million private placement through the sale of 2,000,000 Class A common shares at $2.50 per share. These shares were sold to non-U.S. purchasers under a securities purchase agreement signed on May 9, 2024. The shares are exempt from registration under the Securities Act of 1933, relying on Regulation S, meaning they can't be sold without registration or an applicable exemption. This move raises significant capital but also includes restrictions on share resale.

Positive

• Raised $5.0 million in gross proceeds.
• Sold 2,000,000 Class A common shares at $2.50 per share.
• Capital increase could fuel business growth and development.

Negative

• Shares sold in transactions exempt from registration, restricting resale.
• Potential share dilution for existing shareholders due to new shares issuance.

Insights

Financial Analyst

The private placement transaction, raising US$5.0 million through the sale of 2,000,000 Class A common shares at US$2.50 per share, indicates a strategic move by Dogness to bolster its financial reserves. Private placements are often used by companies to secure capital without undergoing a public offering, thus reducing regulatory overhead and ensuring quick access to funds. For investors, this is a positive signal as it demonstrates the company's ability to attract investment, reflecting confidence from investors in Dogness' future prospects.

Moreover, the use of Regulation S, which allows for sales to non-U.S. investors, suggests an attempt to tap into a broader investor base, possibly identifying international interest in their product lines. This move could enhance liquidity and provide Dogness with more flexibility in managing its operations and growth strategies.

However, the shares sold in this manner are subject to resale restrictions under the Securities Act and applicable Blue Sky laws, limiting short-term liquidity for these new investors. This could potentially impact the immediate trading dynamics of DOGZ stock, though it mainly affects the new shareholders rather than existing ones.

Investors should monitor how this influx of capital is utilized. Effective deployment towards R&D, marketing, or expansion activities could lead to significant growth, while inefficient use might dilute shareholder value.

Market Research Analyst

The private placement by Dogness not only infuses significant capital into the company but also reflects underlying confidence in its market positioning and product portfolio. Dogness is known for its comprehensive line of pet products and the funds raised could be pivotal in expanding their market reach or innovating new product lines. This could potentially lead to higher market penetration and an increase in revenue streams in the long term.

The pricing of the shares at US$2.50 per share also merits attention. It signals the valuation agreed upon by private investors, which could serve as a reference point for the market value of the shares. Investors should take note of any shifts in market perception reflected in the public stock market following this private valuation.

International interest, as denoted by the non-U.S. purchasers, suggests that Dogness' products might have global appeal. This could be an early indicator of a strategic international expansion if managed appropriately, potentially resulting in diversified revenue and reduced exposure to any single market's risks.

PLANO, Texas, May 17, 2024 /PRNewswire/ -- Dogness (International) Corporation ("Dogness" or the "Company") (NASDAQ: DOGZ), a developer and manufacturer of a comprehensive line of Dogness-branded, OEM and private label pet products, today announced that it closed a private placement transaction (the "Private Placement"), raising US$5.0 million in gross proceeds, from the sale of 2,000,000 of the Company's Class A common shares (the "Shares") to various purchasers (the "Purchasers"), priced at US$2.50 per share.

On May 9, 2024, the Company entered into a securities purchase agreement with certain non-U.S. purchasers (the "Purchasers") for the aforementioned placement offering. The Shares were sold in transactions exempt from registration under the Securities Act of 1933, as amended, in reliance on Regulation S thereunder. Each of the Purchasers understands that the Shares have not been registered under the Securities Act and such Purchasers may not sell or otherwise dispose of the Shares without registration under the Securities Act and under applicable state securities or "Blue Sky" laws, or pursuant to an exemption therefrom.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Shares 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.

About Dogness

Dogness (International) Corporation was founded in 2003 from the belief that dogs and cats are important, well-loved family members. Through its smart products, hygiene products, health and wellness products, and leash products, Dogness' technology simplifies pet lifestyles and enhances the relationship between pets and pet caregivers. The Company ensures industry-leading quality through its fully integrated vertical supply chain and world-class research and development capabilities, which has resulted in over 200 patents and patents pending. Dogness products reach families worldwide through global chain stores and distributors. For more information, please visit: ir.dogness.com.

Forward Looking Statements

No statement made in this press release should be interpreted as an offer to purchase or sell any security. Such an offer can only be made in accordance with the Securities Act of 1933, as amended, and applicable state securities laws. Certain statements in this press release concerning our future growth prospects are forward-looking statements regarding our future business expectations intended to qualify for the "safe harbor" under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding lingering effects of the Covid-19 pandemic on our customers' businesses and end purchasers' disposable income, our ability to raise capital on any particular terms, fulfillment of customer orders, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, our ability to realize revenue from expanded operation and acquired assets in China and the U.S., our ability to attract and retain highly skilled professionals, client concentration, industry segment concentration, reduced demand for technology in our key focus areas, our ability to successfully complete and integrate potential acquisitions, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings. These filings are available at www.sec.gov. Dogness may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. In addition, please note that any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of the date of this press release. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.

For investor and media inquiries, please contact:

Wealth Financial Services LLC
Connie Kang, Partner
Email: ckang@wealthfsllc.com
Tel: +86 1381 185 7742 (CN)

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SOURCE Dogness (International) Corporation

FAQ

What did Dogness announce on May 17, 2024?

Dogness announced the closing of a $5.0 million private placement.

How much capital was raised in Dogness's private placement?

Dogness raised $5.0 million in gross proceeds.

What is the share price in Dogness's private placement?

The share price was $2.50 per share.

How many shares were sold in Dogness's private placement?

2,000,000 Class A common shares were sold.

What regulation exempts Dogness's private placement from registration?

The transaction relies on Regulation S under the Securities Act of 1933.

Who were the purchasers in Dogness's private placement?

The purchasers were certain non-U.S. investors.

What is the restriction on the sold shares in Dogness's private placement?

The shares cannot be sold or disposed of without registration or an applicable exemption.