Ostin Technology Group Announces Pricing of $5.0 million Registered Direct Offering

Rhea-AI Summary

Ostin Technology Group (Nasdaq: OST), a Chinese display modules and polarizers supplier, has announced a $5.0 million registered direct offering. The company will sell 9,090,908 Class A ordinary shares at $0.55 per share, bundled with two warrants each. The deal includes:

- Class A ordinary shares at $0.55 per share
- Warrants to purchase up to 90,909,080 additional shares
- Warrant exercise price of $0.80 per share
- Two-year warrant expiration period
- Alternative exercise option after one month at 0.9x shares

The offering closed on April 15, 2025, under the shelf registration statement Form F-3 (File No. 333-279177), which was declared effective by the SEC on May 28, 2024.

Positive

• Secured $5.0 million in immediate funding through registered direct offering

Negative

• Significant potential dilution with up to 90,909,080 additional shares from warrant exercise
• Offering price of $0.55 per share indicates a discounted valuation
• Warrant exercise option at 0.9x shares after one month could lead to additional dilution

Insights

Financial Analyst

Ostin Technology Group has announced a $5 million registered direct offering that raises significant concerns for existing shareholders. The offering terms reveal several troubling aspects:

The $0.55 offering price represents a 82.8% discount to the current $3.19 share price, suggesting extremely unfavorable financing terms. Each share comes bundled with warrants to purchase 10 additional shares, creating massive potential dilution.

With OST's current market cap of approximately $26.3 million, this offering represents about 19% of the company's value before considering warrant exercises. Based on the current share price and market cap, I estimate OST has roughly 8.25 million shares outstanding. This offering adds 9.09 million shares immediately, plus up to 90.91 million more if all warrants are exercised.

The warrant exercise price of $0.80 remains 75% below current market value, and the alternative exercise provision after one month (at 0.9x the shares) creates additional complexity and potential dilution.

If all warrants are exercised, the share count could increase by approximately 1,210%, representing extraordinary dilution for current shareholders. The absence of any explanation regarding the use of proceeds is particularly concerning for a financing with such severe terms.

This type of highly dilutive financing at deep discounts typically suggests significant financial pressure and will likely create substantial downward pressure on the stock price as the market absorbs these implications.

Nanjing, China, April 15, 2025 (GLOBE NEWSWIRE) -- Ostin Technology Group Co., Ltd. (“the Company”) (Nasdaq: OST), a leading supplier of display modules and polarizers based in China, today announced that it has entered into a securities purchase agreement with several investors for the purchase and sale of (i) 9,090,908 Class A ordinary shares (the “Class A Ordinary Shares”), par value $0.001 per share, of the Company; and (ii) Class A Ordinary Share purchase warrants to purchase up to 90,909,080 Class A Ordinary Shares (the “Warrants”); and (iii) up to 90,909,080 Class A Ordinary Shares issuable upon exercise of the Warrants. Each Class A Ordinary Share is being sold together with two associated Warrants, each to purchase one Class A Ordinary Share at a combined offering price of $0.55 per Class A Ordinary Share and associated Warrants.

The Warrants have an exercise price of $0.8 per Class A Ordinary Share, which will be immediately exercisable after issuance, and will expire two years from the date of issuance. The Warrants may be exercised on an alternative basis after one-month anniversary after the issuance pursuant to which the holder may exercise the Warrant for 0.9 times the number of Class A Ordinary Shares they would receive upon a standard exercise.

Aggregate gross proceeds to the Company in respect of the offering (assuming no exercise of the Warrants) is expected to be approximately $5.0 million, before deducting other offering expenses payable by the Company. The offering was closed on April 15, 2025.

The Class A Ordinary Shares, the Warrants and the Class A Ordinary Shares underlying the Warrants to be issued in the offering were issued pursuant to a shelf registration statement on Form F-3 (File No. 333-279177), which was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on May 28, 2024. The offering will be made only by means of a prospectus supplement that forms part of such registration statement. A prospectus supplement relating to the securities offered in the registered direct offering will be filed by the Company with the SEC. When available, copies of the prospectus supplement relating to the registered direct offering, together with the accompanying prospectus, can be obtained at the SEC’s website at www.sec.gov.

This press release shall not constitute an offer to sell or a 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 an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

About Ostin Technology Group Co., Ltd.

Founded in 2010, the Company is a supplier of display modules and polarizers in China. The Company designs, develops, and manufactures TFT-LCD display modules in a wide range of sizes and customized sizes which are mainly used in consumer electronics, outdoor LCD displays, and automotive displays. The Company also manufactures polarizers used in the TFT-LCD display modules.

For more information, please visit http://ostin-technology.com/index.html

Forward-Looking Statement

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, underlying assumptions, and other statements that are other than statements of historical facts. When the Company uses words such as “may, “will, “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company’s goals and strategies; the Company’s forecast on market trends; the Company’s future business development; the demand for and market acceptance for new products; expectation to receive customer orders for new products; the anticipated timing for the marketing and sales of new products; changes in technology; the Company’s ability to attract and retain skilled professionals; client concentration; and general economic conditions affecting the Company’s industry and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the SEC. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

For more information, please contact:

Ostin Technology Group Co., Ltd.
ir@austinelec.com

Investor Relations:

Janice Wang
Wealth Financial Services LLC
Phone: +86 13811768599 +1 628 283 9214
Email: services@wealthfsllc.com

FAQ

What is the total value of Ostin Technology Group's (OST) recent registered direct offering?

Ostin Technology Group's registered direct offering is valued at $5.0 million before deducting offering expenses.

How many Class A ordinary shares is OST offering in the April 2025 direct offering?

OST is offering 9,090,908 Class A ordinary shares, with each share bundled with two warrants.

What is the exercise price and duration of the warrants in OST's 2025 offering?

The warrants have an exercise price of $0.80 per share and expire two years from issuance date.

What is the combined offering price per share and associated warrants for OST's direct offering?

The combined offering price is $0.55 per Class A Ordinary Share and associated warrants.

How many additional shares could be issued if all OST warrants are exercised?

Up to 90,909,080 additional Class A Ordinary Shares could be issued if all warrants are exercised.