Wetouch Technology Inc. Announces Closing of $10.8 Million Public Offering of Common Stock
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Insights
The closing of Wetouch Technology Inc.'s underwritten public offering represents a significant capital infusion for the company, amounting to $10.8 million in gross proceeds. This strategic move is indicative of Wetouch's aggressive expansion plans and the strengthening of its financial position. The intended use of proceeds for constructing new facilities and purchasing production lines suggests a focus on scaling operations and enhancing manufacturing capabilities. This could potentially lead to increased revenue streams and improved economies of scale, which are crucial in the competitive technology manufacturing sector.
Investors should note the dilutive effect of the new share issuance on current shareholders, as well as the potential for further dilution if the underwriters exercise their option to purchase additional shares. However, the capital raise is a common practice for growth-oriented companies and may be viewed favorably if the funds are effectively utilized to generate long-term shareholder value. Monitoring the deployment of the raised capital into the stated initiatives and subsequent operational outcomes will be key in assessing the long-term impact of the offering on the company's financial health and stock performance.
The projected capacitive touchscreen market is a rapidly evolving industry, driven by increasing demand for touch-enabled devices across various sectors. Wetouch's investment in research and development, as part of the proceeds usage, is critical to maintaining a competitive edge through innovation and product differentiation. The repayment of convertible promissory notes also indicates a restructuring of the company's debt profile, potentially leading to reduced financial leverage and interest expenses.
It is essential to consider the market conditions and investor sentiment at the time of the offering. The fixed price of $5.00 per share provides a clear reference for market valuation, but the stock's performance post-offering will be a true measure of market reception. The role of the lead book running manager, WestPark Capital and other underwriters, along with the legal counsel involved, are important elements in the successful execution of the offering. Their reputation and expertise can influence investor confidence and the smooth processing of the transaction.
The legal framework surrounding the public offering is a pivotal aspect for Wetouch Technology Inc. Compliance with SEC regulations, evidenced by the effective registration statement and filing of a final prospectus, is paramount to ensure the legitimacy and transparency of the offering. The involvement of specialized legal counsel, both for the company and the underwriters, underscores the complexity of securities law and the necessity for expert guidance in navigating it.
The disclaimer regarding the offering not constituting an offer to sell or a solicitation of an offer to buy in any jurisdiction where such actions would be unlawful, is a standard legal precaution. It serves to mitigate the risk of regulatory non-compliance and potential legal repercussions. Investors should be aware of the legal implications of the offering, as they can significantly affect the company's operations and future offerings.
Meishan, Sichuan, China, Feb. 23, 2024 (GLOBE NEWSWIRE) -- Wetouch Technology Inc. (Nasdaq: WETH ) (“Wetouch” or the “Company”), a Nevada company, through its wholly-owned subsidiary, engaged in the research, development, manufacturing, sales and servicing of projected capacitive touchscreens, announced today the closing of its previously announced underwritten public offering of 2,160,000 shares of common stock at a price to the public of
Proceeds from the Offering will be used for the construction of a new factory, facilities and office buildings, the purchase of two production lines in the new factory, research and development, the repayment of convertible promissory notes, and working capital and general corporate purposes.
WestPark Capital, Inc. (“WestPark”), Craft Capital Management LLC, R.F. Lafferty & Co., Inc., and Orientiert XYZ Securities Limited are the underwriters for the Offering, with WestPark being the lead book running manager for the Offering. The Crone Law Group P.C. acted as U.S. counsel to the Company and Bevilacqua PLLC acted as U.S. counsel to the underwriters in connection with the Offering.
The shares of common stock described above were offered by the Company pursuant to a registration statement on Form S-1 (File No. 333-270726) that was initially filed by the Company with the U.S. Securities and Exchange Commission (SEC) on March 21, 2023 and declared effective by the SEC on February 14, 2024. The Offering was made by means of a written prospectus that forms a part of the registration statement. A final prospectus relating to the Offering was filed with the SEC and is available on the SEC’s website located at http://www.sec.gov and may also be obtained from WestPark Capital, Inc., 1800 Century Park East, Suite 220, Los Angeles, CA 90067, tel: 310-203-2919, e-mail: jstern@wpcapital.com.
This press release shall not constitute an offer to sell or the solicitation of an offer to buy these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
About Wetouch Technology Inc.
Wetouch Technology Inc. is a holding company incorporated in Nevada with operations conducted by its wholly-owned subsidiary engaged in the research, development, manufacturing, sales and servicing of medium to large sized projected capacitive touchscreens. The Company specializes in large-format touchscreens, which are developed and designed for a wide variety of markets and used in the financial terminals, automotive, POS, gaming, lottery, medical, HMI, and other specialized industries.
Forward Looking Statements
This document contains certain “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies, goals and objectives of management for future operations; any statements concerning proposed new products and services or developments thereof; any statements regarding future economic conditions or performance; any statements or belief; and any statements of assumptions underlying any of the foregoing.
Forward looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words, or the negative thereof. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. We do not undertake to update forward-looking statements to reflect the impact of circumstances or events that arise after the dates they are made. You should, however, consult further disclosures and risk factors we include in Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, and Reports filed on Form 8-K.
Investor Contact:
Core IR
+1 516-222-2560
FAQ
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