Lianluo Smart Tanks After Pricing of $2.5 Million Offering

The medical products provider raised two rounds of fundings in February after it received notice for the continued listing.

Belinda Zhou
    Feb 21, 2020 9:00 AM  PT
Lianluo Smart Tanks After Pricing of $2.5 Million Offering
author: Belinda Zhou   

China's medical gadgets company Lianluo Smart Ltd. (Nasdaq: LLIT)  announced $2.5 million in direct offerings and warrants, sending its stock down 27% Friday morning.

Lianluo Smart, known mainly for its medical wearable devices, said Friday it registered to sell 3.5 million of its common shares.

The company also announced a concurrent private placement to offer warrants. Investors could purchase up to approximately 3.5 million common shares at the strike price of $0.70 per share in the next 5.5 years.

Both the registered direct offering and concurrent private placement are expected to close on or about February 25, next Tuesday, the company said in the statement.

Friday's offering followed Lianluo Smart's offering of $2.2 million on Feb. 12, when shares in the company dropped 44% to $0.74 per share. The gross proceeds from the previous registered direct offering and concurrent private placement totaled $2.2 million. 

To compare, the exercise price for the earlier warrant was $0.85 per share. The former deal closed on Feb. 14. 

Maxim Group LLC acted as sole placement agent for the twin offerings.

Lianluo Smart, formerly known as De Haier Medical Systems Co., manufactures and sells wearable devices, smart devices, smart ecosystem platform and Obstructive Sleep Apnea Syndrome that help patients with sleep apnea.

The company said on Jan. 6 that it has received a compliance notice from Nasdaq that the company didn't meet the market value standard and the net income standard because it no longer complied with the minimum of $2.5 million in stockholders' equity for continued listing.

Shares in Lianluo Smart were trading at $0.62 per share, down 27% intraday Friday.