Lianluo Tanks 44% on $2 Million Offering

The smart products provider trying to regain Nasdaq compliance intends to sell approximately 2.6 million shares, priced at 85 cents apiece.
Anthony RussoFeb 13,2020,00:35

The stock in Lianluo Smart Ltd. (Nasdaq LLIT) tumbled 44% to 74 cents per American depositary share at Wednesday’s close after the company announced the pricing of its $2.2 million offering.

The Beijing-based smart products provider said in a statement today that it entered an agreement with “certain accredited investors” to sell approximately 2.6 million Class A Common Shares, priced at 85 cents each.

The warrants will carry an exercise price of 85 cents apiece and will expire 5.5 years from the issuance date that has yet to be announced by the company.

The lone agent on the offering is Maxim Group LLC.

Since making its debut in Times Square in April 2010, Lianluo’s stock has traded well under its open on IPO day of $10.26 per ADS. Currently, it is not in compliance with Nasdaq on two separate accounts.

Last month, Lianluo received a letter from Nasdaq, saying that it no longer complies with the $2.5 million minimum of stockholders' equity. Lianluo must submit a plan to Nasdaq by Feb. 17 to regain compliance. If the plan is declined, the company can appeal the decision to a Hearings Panel of Nasdaq.

In September, Lianluo received warning from Nasdaq for not meeting the minimum required trading price of $1 per ADS over 30 days. Despite shares falling under the minimum today, the company has recently closed at least $1 per ADS  or higher for more than 10 days. That leaves Lianluo eligible to regain compliance with Nasdaq on the minimum bid price requirement.

Established in 2003, Lianluo offers medical devices, which includes sleep respiratory solutions, general hospital products and medical compressors. It also provides smart devices for sports, social contact, entertainment, remote-control, and family health management.

Lianluo said the offering is expected to close around Feb. 14.