IT TECH PACKAGING ANNOUNCES PRICING OF $1.4 MILLION PUBLIC OFFERING

Rhea-AI Summary

IT Tech Packaging (NYSE American: ITP) has announced the pricing of a public offering of 6,899,500 shares of its common stock at $0.20 per share. The company expects to raise approximately $1.4 million in gross proceeds before deducting fees and expenses. The offering is set to close on May 14, 2025, with Maxim Group LLC serving as the sole placement agent.

The North China-based manufacturer and distributor of diversified paper products plans to use the net proceeds for working capital and general corporate purposes. The offering is being conducted under a shelf registration statement that was declared effective by the SEC on April 14, 2023.

Positive

• Raises $1.4 million in additional capital for working capital needs

Negative

• Significant shareholder dilution through offering of 6,899,500 shares
• Low offering price of $0.20 per share indicates potential financial distress

Insights

Financial Analyst

IT Tech Packaging's $1.4M offering at $0.20/share signals potentially concerning capital raising at unfavorable terms.

This $1.4 million public offering from IT Tech Packaging reveals several concerning aspects that investors should understand. The company is selling 6,899,500 shares at just $0.20 per share, which suggests extremely low valuation metrics for a NYSE American-listed company. This pricing indicates potential financial distress or at minimum, challenging market conditions for the firm.

The offering price of $0.20 represents what's likely a significant discount to previous trading levels, considering most NYSE American stocks trade at substantially higher prices. Such deeply discounted offerings typically signal desperate capital needs and often lead to significant dilution for existing shareholders. With nearly 7 million new shares entering the market, this represents substantial dilution of the existing share base.

The stated use of proceeds for "working capital and general corporate purposes" is particularly vague and potentially concerning. This generic language often indicates defensive capital raising rather than growth-oriented investment, suggesting the company may be using these funds simply to maintain operations rather than pursue expansion opportunities.

The engagement of Maxim Group as the sole placement agent further supports the interpretation that this is a distressed offering, as larger banks typically handle larger, more stable public offerings. The modest size of the offering ($1.4 million) is unusually small for a public company, potentially indicating limited investor interest or company desperation to secure any available capital.

BAODING, China, May 13, 2025 /PRNewswire/ -- IT Tech Packaging Inc. (NYSE American: ITP) ("IT Tech Packaging" or the "Company"), a leading manufacturer and distributor of diversified paper products in North China, today announced the pricing of a public offering of 6,899,500 shares of its common stock at a price to the public of $0.20 per share. The gross proceeds from the offering to IT Tech Packaging are expected to be approximately $1.4 million, before deducting offering fees and expenses. The offering is expected to close on May 14, 2025, subject to customary closing conditions.

Maxim Group LLC is acting as the sole placement agent for the offering.

IT Tech Packaging intends to use the net proceeds of this offering for working capital and other general corporate purposes.

A shelf registration statement relating to the shares of common stock offered in the public offering described above was filed with the Securities and Exchange Commission ("SEC") on April 3, 2023, and declared effective by the SEC on April 14, 2023. The offering is being made only by means of a written prospectus and prospectus supplement that form a part of the registration statement. A preliminary prospectus supplement and accompanying prospectus relating to the offering has been filed with the SEC and is available on the SEC's website at www.sec.gov. A final prospectus supplement and accompanying prospectus will be filed with the SEC. When available, copies of the final prospectus supplement and the accompanying prospectus may also be obtained by contacting Maxim Group LLC at 300 Park Avenue, 16^th Floor, New York, New York, telephone (212) 895-3745 or by email at syndicate@maximgrp.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the securities being offered, nor shall there be any sale of the securities being offered 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 IT Tech Packaging, Inc.

Founded in 1996, IT Tech Packaging, Inc. is a leading manufacturer and distributor of diversified paper products in North China. Using recycled paper as its primary raw material (with the exception of its tissue paper products), ITP produces and distributes three categories of paper products: corrugating medium paper, offset printing paper and tissue paper products. With production based in Baoding and Xingtai in North China's Hebei Province, ITP is located strategically close the Beijing and Tianjin region, home to a growing base of industrial and manufacturing activities and one of the largest markets for paper products consumption in the country. ITP has been listed on the NYSE American since December 2009. For more information, please visit: www.itpackaging.cn.

Forward-Looking Statements

Certain statements made herein are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "anticipate", "believe", "expect", "estimate", "plan", "outlook", and "project" and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include timing of the proposed transaction; the business plans, objectives, expectations and intentions of the parties once the transaction is complete, and ITP's estimated and future results of operations, business strategies, competitive position, industry environment and potential growth opportunities. These forward-looking statements reflect the current analysis of existing information and are subject to various risks and uncertainties. As a result, caution must be exercised in relying on forward-looking statements. Due to known and unknown risks, our actual results may differ materially from our expectations or projections. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

Additional information concerning these and other factors that may impact our expectations and projections will be found in our periodic filings with the SEC, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. ITP's SEC filings are available publicly on the SEC's website at www.sec.gov. ITP disclaims any obligation to update the forward-looking statements, whether as a result of new information, future events or otherwise.

Contacts:

At the Company Email:

ir@itpackaging.cn
Tel: +86 0312 8698215

 

View original content:https://www.prnewswire.com/news-releases/it-tech-packaging-announces-pricing-of-1-4-million-public-offering-302453820.html

SOURCE IT Tech Packaging, Inc.

FAQ

What is the purpose of ITP's $1.4 million public offering?

IT Tech Packaging plans to use the net proceeds from the offering for working capital and other general corporate purposes.

How many shares is ITP offering and at what price?

ITP is offering 6,899,500 shares of its common stock at a price of $0.20 per share.

When will ITP's public offering close?

The offering is expected to close on May 14, 2025, subject to customary closing conditions.

Who is the placement agent for ITP's public offering?

Maxim Group LLC is acting as the sole placement agent for the offering.

What is the total value of ITP's public offering?

The gross proceeds from the offering are expected to be approximately $1.4 million, before deducting offering fees and expenses.