Happiness Biotech Group Limited (Nasdaq: HAPP) announced Monday that it has entered into a securities purchase agreement (SPA) for a registered direct placement.
The Nanping-based company, which makes nutraceutical and dietary supplements, expects to issue up to 4.2 million ordinary shares. Assuming the ordinary share trades at the current level, the funds would total approximately $7 million.
Happiness Biotech said it expects to use the funds on developing and expanding the business of its wholly-owned subsidiary in China, including social e-commerce, content e-commerce, e-commerce live streaming and marketing on social media, and for working capital and general corporate purposes.
Xuezhu Wang, the chief executive officer of the company, stated, "We are glad that more strategic investors have seen the value and potential of Happy Buy. These investors have extensive experience investing in the e-commerce industry. This transaction not only brings more capital for the company but also brings more recognition in the e-commerce industry for Happy Buy. "
Last month, the company announced that Happy Buy has recorded over $3 million in sales since November. Meanwhile, Happy Buy received preferential tax policies from the local government in December, according to the company.
Shares of HAPP traded at $1.67 today, down 9.25%.