With its recent announcement of a $10 million worth of share and warrant issue, Color Star Technology Co. Ltd. (CSCW) has fallen in the current market. CSCW values at $0.25, gaining more than 51% compared to yesterday’s closing price. The stock closed at $0.52 at the end of the last trading session. The stock volume traded in the last trading session was around 2.17 million shares. The current market cap of the company is around $75.33 million.
CSCW announcement of a $10 million share and warrant issue
Specific institutional investors have purchased shares and warrants of Color Star Technology Co. Ltd. (CSCW) in a registered direct offering of ordinary shares and warrants. One common share and one warrant to acquire one common share make up each unit. The cost of each unit is set at $0.40.
Prior to eliminating placement agency fees and other expected offering costs that the Company must bear, the total proceeds of the sale of the shares will be about $10.0 million. Ordinary shares and warrants for an aggregate amount of 25,000,000 ordinary shares will be issued to investors in total. The warrants are worth $0.40 per common share as a starting point.
Overall corporate and working capital expenditures will be financed using the net proceeds of this Issue. If all closing conditions are met, the placement is scheduled to be completed on or around February 24, 2022. Additionally, Maxim Group LLC serves as the exclusive arrangement broker for this transaction.
CSCW Financial Position
CSCW announced its fiscal 2021 results on November 2. In fiscal 2021, the firm recorded sales of $6.8 million, up 100% compared to $0 in fiscal 2020. For the first time in three years, the firm grew sales and gross profit. CSCW also generated a $2.6 million gross profit in fiscal 2021, a 100% increase year-over-year.
Conclusion
The announcement of the shares and warrants offerings to direct investors adversely affected the stock. On Tuesday, its stock lost half its value when the trading started. A localized Asian version of metaverse Color World, developed by Color Star Technology, will be released this month.
