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Wednesday, May 25, 2022

SOS Limited (SOS) stock plunged in the Current market; here is why?

SOS Limited (SOS) stock declined in the current market after announcing its Direct Offering. SOS’s share price is $0.54, losing more than 25.63% compared to yesterday’s closing price. SOS stock closed at $0.74 at the end of the last trading session. SOS stock volume was around 9.02 million shares in the previous trading session. The current market cap of the company is about $179.94 million.


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SOS: Direct Offering

Accredited investors have agreed to acquire roughly $20 million worth of SOS Limited’s American Depositary Shares (ADS) in a registered direct offering, the company stated today.

The company has decided to sell 35,750,000 ADSs at a price of $0.56 per ADS under the terms of the securities purchase agreement. In other words, for every ADV, you get ten (10) of the company’s Class A Ordinary Shares. The stock ticker “SOS” represents the ADS on the NYSE. It is also worth noting that SOS will reduce the exercise price of ADS warrants issued on February 17, 2021, February 22, 2021, March 1, 2021, and April 1, 2021, to $0.56 per share on the closing date of this transaction.

The direct offering is expected to raise $20.02 million in gross proceeds before subtracting the placement agent’s fees and other projected offering costs for the company. If all criteria are met, the direct offering is projected to conclude on or around April 4, 2022.

Net proceedings are intended to grow its North American operations and for working capital and other company purposes.

SOS: NYSE Non-compliance Letter

For more than a couple of months now, SOS Limited (SOS) has received a letter from the New York Stock Exchange (NYSE) stating that the trading price of SOS’s American depositary shares is below compliance norms.

When an average closing price for a company’s stock is less than $1.00 for 30 consecutive trading days, it will be regarded as violating NYSE regulation 802.01C. The corporation must reach $1.00 per share in the next six months. An average of $1.00 per share for at least 30 days and a closing share price of $1.00 on the final trading day of any calendar month throughout the six-month cure period is required to restore compliance. The NYSE will begin suspension and delisting processes if the conditions described above are not satisfied after six months.

Conclusion

The company is has raised $20.02 million in direct offerings and intends to use the money in different business operations. It seems to be an attempt to meet the NYSE compliance of having a share price of at least $1.00 per share.

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