JIANGXI, China - Universe Pharmaceuticals INC (NASDAQ:UPC), a Chinese pharmaceutical manufacturer and distributor, has announced a definitive agreement with investors for a registered direct offering. The announcement comes as the company's stock shows significant volatility, having surged over 75% in the past week despite an 84% decline over the past year, according to InvestingPro data. The company will sell approximately 18.75 million ordinary shares, or pre-funded warrants in lieu thereof, at $0.80 per share, with an expected gross proceed of around $15 million.
The transaction, slated to close on December 10, 2024, pending customary closing conditions, also includes warrants allowing investors to purchase up to an additional 18.75 million shares at the same price of $0.80. These warrants have a five-year term from the date of issue. With a current market capitalization of just $5.34 million and rapidly depleting cash reserves, this offering appears crucial for the company's operations.
Univest Securities, LLC serves as the sole placement agent for the offering, which is based on a shelf registration statement previously declared effective by the U.S. Securities and Exchange Commission (SEC) on November 15, 2022. Details of the offering will be available in a final prospectus supplement and accompanying prospectus to be filed with the SEC.
Headquartered in Ji'an, Jiangxi, Universe Pharmaceuticals specializes in traditional Chinese medicine derivatives aimed at the elderly, alongside a range of other pharmaceutical products distributed across 30 provinces in China.
This press release does not constitute an offer to sell securities and is subject to registration or qualification under the relevant securities laws. The announcement is based on a press release statement and investors are advised to review the company's filings with the U.S. Securities and Exchange Commission for further details on the offering and its potential risks.
In other recent news, Universe Pharmaceuticals INC is facing potential delisting from the Nasdaq Stock Market due to not meeting the minimum bid price requirement. The traditional Chinese medicine producer has been given a 180-day period until April 23, 2025, to rectify this situation. Universe Pharmaceuticals' business operations continue unaffected by this notification, and the company is considering measures to address the issue, which may include a reverse share split.
In other recent developments, Universe Pharmaceuticals has announced a change in its independent registered public accounting firm. The company has appointed Enrome LLP to replace YCM CPA INC, a decision approved by the audit committee and not resulting from any disagreements on accounting practices or financial disclosures. The company has complied with the regulatory process by providing YCM with the disclosure statements and has included YCM’s response letter to the SEC in its recent Form 6-K filing.
Furthermore, Universe Pharmaceuticals has disclosed details for its 2024 Annual General Meeting of Shareholders, emphasizing its commitment to transparency and adherence to necessary legal and regulatory frameworks. Investors are advised to monitor the company's future filings with the U.S. Securities and Exchange Commission for updates on its compliance efforts and other factors that may influence its financial position and operational strategy.
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