The stock in Luokung Technology Corp. (Nasdaq: LKCO) skyrocketed 61% by midday Wednesday on its announcement of it entering a deal to sell 15 million of its shares to Daci Haojin Foundation Ltd.
Under the agreement, Luokung will issue its shares at $3.00 apiece, giving the company gross proceeds of $45 million. The funds are expected to be delivered in three separate sets. The first of $13.5 million is expected on July 31, while the other two will deliver in installments of $13.5 million and $18 million on Aug. 31 and Sept. 30 respectively.
Following 12 months after Daci completes the transaction, its preferred shares will turn into the Company's ordinary shares at a 1:1 ratio. Also, Daci has the right of an 8% fixed dividend for a year.
Following the news today, Luokung’s stock hit a 24-week trading high of $1.40 per American depositary share. However, Luokung is currently not in compliance with Nasdaq’s listing rules; the stock market sent it a warning in April for failing to close above $1 per share for 30 consecutive trading days. The company has not closed at or above $1 per share since Feb. 21.
Based in Beijing, Luokung provides location services in China through its spatial-temporal big data PaaS, SaaS and DaaS intelligent services, which can be used for Mobile Internet LBS, Internet Travelling, Intelligent Transportation, Automatic Drive, Smart City, Intelligent IoT, Natural Resources Exploration and Monitoring.
In 2019, Luokung posted $18.78 million in revenues versus $21.04 million in the prior year. Net loss widened to $31.95 million compared with $11.93 million in 2018.
Luokung will now look to ride today’s momentum and regain compliance with Nasdaq.