DatChat, Inc. Announces Pricing of $1.8 Million Underwritten Public Offering of Common Stock

Rhea-AI Summary

DatChat, Inc. (DATS) announced the pricing of its underwritten public offering of 972,972 shares of its common stock at a public offering price of $1.85 per share, with aggregate gross proceeds of approximately $1.8 million. The company has also granted the underwriters a 45-day option to purchase up to an additional 145,945 shares of common stock at the public offering price, with the offering expected to close on January 19, 2024. EF Hutton LLC is acting as the sole book-runner for the offering. The securities are being offered by the Company pursuant to a 'shelf' registration statement on Form S-3, filed with the U.S. Securities and Exchange Commission (SEC) on October 28, 2022, and declared effective on December 6, 2022.

Financial Analyst

The public offering of shares by DatChat, Inc. signifies a capital raising event which is critical for the company's liquidity and future investments. The pricing at $1.85 per share for nearly one million shares equates to an influx of approximately $1.8 million in gross proceeds. This is a strategic move for DatChat, as it seeks to fund its operations and possibly expand its secure messaging and metaverse initiatives. The additional option for underwriters to purchase extra shares could potentially increase the total capital raised, providing a buffer for over-allotments.

Investors should note that the capital raised is relatively modest for a tech company, which could imply either a strategic decision to avoid excessive dilution of existing shares or a limited market appetite for the company's stock. The involvement of EF Hutton LLC as the sole book-runner indicates professional management of the offering process. However, the market's reception to this offering will be a telling sign of investor confidence in DatChat's business model and growth prospects.

Market Research Analyst

The use of a 'shelf' registration statement allows DatChat, Inc. to sell shares over time, providing flexibility in capital management. The effectiveness of this strategy will depend on market conditions and investor sentiment towards the company's sector. As a player in the secure messaging, social media and metaverse spaces, DatChat operates in highly competitive and rapidly evolving industries. The success of this offering could be an indicator of market belief in the long-term viability of DatChat's products and services.

It is essential to consider the market trends in secure communications and metaverse development. Increased demand for privacy and the growing interest in virtual environments may benefit DatChat. However, the company must navigate challenges such as user acquisition, monetization and competition from larger firms with more resources. The outcome of this offering and the subsequent deployment of capital will be critical in determining DatChat's competitive position in the market.

Legal Expert

The press release's emphasis on compliance with SEC regulations, including the mention of the 'shelf' registration statement and prospectus supplement, highlights the legal framework governing public offerings. This procedural rigor is essential to ensure transparency and protect investors. The explicit statement that the press release does not constitute an offer to sell securities reaffirms the legal boundaries within which the company must operate when communicating about such offerings.

Investors should be aware of the legal implications of the offering, as any deviation from SEC regulations could result in penalties or investor lawsuits. The adherence to these protocols also serves to reassure investors about the company's governance standards. The legal structure of the offering, including the role of the underwriters and their option to purchase additional shares, is designed to facilitate a smooth capital raise while managing risk for all parties involved.

New Brunswick, NJ, Jan. 17, 2024 (GLOBE NEWSWIRE) -- DatChat, Inc. (Nasdaq: DATS) (“Datchat” or the “Company”), a secure messaging, social media, and metaverse company, today announced the pricing of its underwritten public offering of 972,972 shares of its common stock (or pre-funded warrants in lieu thereof) at a public offering price of $1.85 per share, for aggregate gross proceeds of approximately $1.8 million, prior to deducting underwriting discounts and other offering expenses. In addition, the Company has granted the underwriters a 45-day option to purchase up to an additional 145,945 shares of common stock (or pre-funded warrants in lieu thereof) at the public offering price per share, less the underwriting discounts to cover over-allotments, if any. The offering is expected to close on January 19, 2024, subject to satisfaction of customary closing conditions.

EF Hutton LLC is acting as the sole book-runner for the offering.

The securities are being offered by the Company pursuant to a "shelf" registration statement on Form S-3 (File No. 333-268058), which was filed with the U.S. Securities and Exchange Commission (“SEC”) on October 28, 2022, as amended on November 18, 2022, and declared effective by the SEC on December 6, 2022, and the accompanying prospectus contained therein.

The offering is being made only by means of a prospectus supplement and accompanying prospectus. A prospectus supplement describing the terms of the public offering will be filed with the SEC and will form a part of the effective registration statement. A preliminary prospectus supplement and accompanying prospectus relating to this offering have been filed with the SEC.

Copies of the prospectus supplement and the accompanying prospectus relating to this offering may be obtained, when available, on the SEC’s website at http://www.sec.gov or 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.

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 proposed public offering, and the timing of 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

How many shares were offered in DatChat's recent public offering?

DatChat offered 972,972 shares of its common stock at a public offering price of $1.85 per share.

What was the aggregate gross proceeds from DatChat's recent public offering?

The aggregate gross proceeds from DatChat's recent public offering were approximately $1.8 million.

Who is acting as the sole book-runner for DatChat's offering?

EF Hutton LLC is acting as the sole book-runner for DatChat's offering.

When is the expected closing date of DatChat's public offering?

The expected closing date of DatChat's public offering is January 19, 2024.

Where can I obtain a copy of the prospectus supplement and accompanying prospectus for DatChat's offering?

Copies of the prospectus supplement and accompanying prospectus for DatChat's offering may be obtained on the SEC’s website or by contacting EF Hutton LLC.