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Saturday, December 9, 2023

TDH Holdings Inc. (PETZ) Stock Plummets Following Disclosure of Registered Direct Offering

TDH Holdings Inc. (PETZ) stock prices were down by 1.08% as of the market closing on September 29th, 2021. This brought the price per share down to USD$1.84 at the end of the trading day. Subsequent premarket fluctuations have seen the stock rise by 16.85%, bringing it up to USD$1.53.

Securities Purchase Agreement

September 30th, 2021 saw PETZ stock announce having entered into a securities purchase agreement with certain investors. The agreement will facilitate a registered direct placement of USD$9.1 million in common shares and accompanying warrants. Each share has been priced at USD$0.89, with each warrant being valued at USD$0.02. The company will issue an aggregate of 10 million common shares, as well as warrants to purchase an aggregate of 20 million common shares. Each warrant will be initially exercisable at USD$2.16 per share.

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Details of PETZ Stock’s Offering

The company expects to generate aggregate gross proceeds in the amount of USD$9.1 million, which it expects to allocate towards the completion of potential strategic acquisitions. PETZ stock will also be using the capital raised to invest in the complementary business. While the company does not have any current prospects for such investments, the completion of the placement is expected to occur around September 30th, 2021.

Revenue Reports

Revenues for the full fiscal year 2020 were reported at USD$0.82 million, representing a 93.55% decrease from the USD$12.65 million for fiscal 2019. The year-over-year decrease was largely driven by a decrease in sales orders, resulting from uncompetitive sales prices for the company’s products. The yearly decrease was further facilitated by the partial suspension of the company’s overseas e-commerce business due to estimated gross loss.

PETZ Stock’s Setbacks

PETZ stock also reported the suspension of its production and operations due to defaults on loan repayments to financial institutions. These operations started in November 2019 and ended in May 2020. This setback was consolidated by claims from the company’s suppliers and creditors, as well as labor arbitration stemming from the reduction in workforce. The global coronavirus pandemic also contributed to supply chain disruptions, transportation, and the company’s sales activities.

Future Outlook for PETZ Stock

The company reported a promising quarter, further consolidated by the capital generated from its registered offering. PETZ stock is keen to capitalize on the expanded scope of opportunities at its disposal. Current and potential investors are confident in management’s ability to leverage the resources at their disposal. This is hoped to facilitate consistent and organic growth in shareholder value over the long term.

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