Shares of Future FinTech Group (Nasdaq: FTFT) closed up 33% Friday after the company said it closed the direct offering of 2 million shares of its common stock at $5.95 per share.
The gross proceeds of this offering are $11.9 million, the company said. Future Fintech plans on using the proceeds from the offering for general corporate purposes.
The sole placement agent on the deal is A.G.P./Alliance Global Partners.
Formerly known as SkyPeople Fruit Juice Inc., the company delved into blockchain technology in 2017 and began to develop applications and digital asset systems for financial and retail businesses. The former producer of fruit juices has altered its business strategy and shifted its source of revenue to blockchain-based global e-commerce, as well as financial and management consulting.
Investors of Future FinTech are relying on the future of blockchain and not really on the company's financial soundness. The company is unprofitable, and earnings have declined by 36.3% per year for the last five years. Impacted by the coronavirus, the revenues of Future FinTech declined sevenfold in the three months through September to $43.66 million.
The company has been in the market for over 20 years but can be likened to technology startups as it goes through a transformational growth phase. Last month, the company said it completed the upgrade of its mBTC system. mBTC is a payment platform only for blockchain communities. The upgrade adapted the technology for e-commerce platforms. According to the company’s CEO, the mBTC will not only serve e-commerce platforms but will eventually be used for other payment systems that intend to use BTC.