UTime Limited Announces Pricing of $5 Million Registered Direct Offering

Rhea-AI Summary

UTime (Nasdaq: WTO), a mobile device manufacturer, has announced a $5 million registered direct offering of its ordinary shares. The company has agreed to sell 7,692,308 ordinary shares at a purchase price of $0.65 per share to certain accredited investors. The offering is expected to close around September 16, 2024, subject to customary closing conditions. The shares are being offered pursuant to a shelf registration statement on Form F-3 filed with the SEC. UTime aims to provide cost-effective products and solutions to consumers globally, particularly focusing on low-income individuals in established and emerging markets.

Positive

• Secured $5 million in funding through registered direct offering
• Offering price of $0.65 per share, above the current market price
• Funds can be used for company growth and expansion

Negative

• Potential dilution of existing shareholders' ownership
• Offering price represents a discount to recent trading prices
• Additional shares may put downward pressure on stock price

Insights

Financial Analyst

UTime's $5 million registered direct offering at $0.65 per share signals a significant dilution for existing shareholders. The 7,692,308 new shares represent a substantial increase in the company's outstanding shares, potentially impacting earnings per share. The pricing at $0.65 suggests investor caution, possibly reflecting concerns about UTime's financial position or growth prospects. This capital raise, while providing needed funds, comes at a cost to shareholder value. The use of a shelf registration indicates UTime's anticipation of future capital needs, which could lead to further dilution. Investors should closely monitor how UTime utilizes this capital to drive growth and improve its financial standing in the competitive mobile device manufacturing sector.

Market Research Analyst

UTime's focus on cost-effective products for low-income consumers in emerging markets presents a double-edged sword. While tapping into a vast, underserved market, it also faces intense competition and thin profit margins. The need for this capital raise suggests challenges in organic growth or profitability. The timing and pricing of this offering may indicate market skepticism about UTime's business model or execution capabilities. However, if UTime can effectively deploy this capital to expand its market presence or innovate its product line, it could potentially strengthen its position in the budget smartphone segment. Investors should watch for concrete plans on how UTime intends to use these funds to drive sustainable growth and differentiate itself in a crowded market.

Legal Expert

The use of a shelf registration statement for this offering provides UTime with flexibility for future capital raises, but also signals potential ongoing financial needs. The company's compliance with SEC regulations, including the filing of a prospectus supplement, demonstrates transparency. However, investors should note the cautionary language regarding the offer and sale of securities, which is standard but underscores the risks involved. The closing conditions mentioned in the announcement introduce an element of uncertainty; investors should be aware that the deal isn't finalized until these conditions are met. This offering's structure and execution reflect UTime's attempt to balance its capital needs with regulatory compliance, a important consideration for investors evaluating the company's governance and risk profile.

NEW YORK, Sept. 13, 2024 (GLOBE NEWSWIRE) -- UTime Limited (“UTime” or the “Company”) (Nasdaq: WTO), a mobile device manufacturing company committed to providing cost effective products and solutions to consumers globally and helping low-income individuals from established and emerging markets today announced that it has entered into a securities purchase agreement with certain accredited investor to sell $5 million of its ordinary shares in a registered direct offering.

Under the terms of the securities purchase agreement, UTime has agreed to sell 7,692,308 ordinary shares with a purchase price of $0.65 per share. The gross proceeds to UTime are estimated to be $5 million before deducting the estimated offering expenses.

The registered direct offering is expected to close on or about September 16, 2024, subject to the satisfaction of customary closing conditions.

The ordinary shares being sold pursuant to the registered direct offering are being made pursuant to a shelf registration statement on Form F-3 (File No. 333-278912), intially filed with the Securities and Exchange Commission (the "SEC") on April 24, 2024, and declared effective on June 10, 2024.  Such securities are being offered only by means of a prospectus. A prospectus supplement and the accompanying prospectus relating to and describing the terms of the registered direct offering will be filed with the SEC. When available, copies of the prospectus supplement and the accompanying prospectus relating to the registered direct offering may be obtained at the SEC's website www.sec.gov or by contacting the Company, 7^th Floor, Building 5A, Shenzhen Software Industry Base, Nanshan District, Shenzhen, People’s Republic of China 518061.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, 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 the registration or qualification under the securities laws of any such state or jurisdiction.

About UTime

UTime Ltd., established in 2008, is committed to providing cost-effective mobile devices to consumers globally and to helping low-income individuals from established markets, including the United States and emerging markets such as India and other countries in South Asia and Africa have better access to updated mobile technology. Since July 2023, we have added smart electric vehicle chargers into our product lines in response to the global demand for energy conservation and carbon reduction. For more information, visit the Company’s website at http://www.utimeworld.com/.

Forward-Looking Statements

Statements in this press release about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, may constitute “forward-looking statements” within the meaning of The Private Securities Litigation Reform Act of 1995. These statements include, but are not limited to, statements relating to the ability of the Company to regain compliance with Nasdaq continued listing requirements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “target,” “will,” “would” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results may differ materially from those indicated by such forward-looking statements as a result of various important factors discussed in the “Risk Factors” section of the Annual Report in Form 20-F filed with the SEC on July 30, 2024. Any forward-looking statements contained in this press release speak only as of the date hereof, and the Company specifically disclaims any obligation to update any forward-looking statement, whether as a result of new information, future events or otherwise.

For more information, please contact:

PR
Email: pr@westock.com

FAQ

What is the size of UTime 's (UTME) recent registered direct offering?

UTime (UTME) announced a $5 million registered direct offering of its ordinary shares.

How many shares is UTime (UTME) selling in the September 2024 offering?

UTime (UTME) is selling 7,692,308 ordinary shares in the September 2024 offering.

What is the purchase price per share for UTime 's (UTME) September 2024 offering?

The purchase price per share for UTime 's (UTME) September 2024 offering is $0.65.

When is the expected closing date for UTime 's (UTME) $5 million offering?

The expected closing date for UTime 's (UTME) $5 million offering is on or about September 16, 2024.