HAIKOU, China - China Pharma Holdings, Inc. (NYSE American: CPHI), a specialty pharmaceutical company, has filed a prospectus supplement with the U.S. Securities and Exchange Commission for an at-the-market equity offering with a potential aggregate of $600,000. The announcement made today follows the company's entry into a Securities Purchase Agreement (SPA) with an unnamed investor yesterday. According to InvestingPro data, the company faces significant financial challenges, with a weak financial health score of 0.82 and negative EBITDA of $1.71M in the last twelve months.
Under the terms of the SPA, the investor has the discretion to purchase shares of China Pharma's common stock periodically until December 31, 2024. The pricing of these shares will be tied to the market, specifically the lower of either the closing price the day before the purchase notice or the five-day average closing price, with a minimum threshold of $0.15 per share.
The sale of shares will depend on various factors, including market conditions, and there is no guarantee that any of the common stock will be sold. The offering is part of a shelf registration statement that became effective on February 6, 2024.
China Pharma specializes in developing, manufacturing, and marketing pharmaceutical products for diseases with high incidence and mortality rates in China, such as cardiovascular, CNS, infectious, and digestive diseases. The company boasts a cost-effective business model, GMP-certified product lines, and a broad distribution network across China. However, InvestingPro analysis reveals concerning metrics, including a 28.76% revenue decline and a current ratio of 0.79, indicating potential liquidity challenges. Unlock 10+ additional key insights and detailed financial metrics with InvestingPro.
The company cautions that this press release contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially from those projected. These risks include the potential unachievability of financial forecasts, changes in product demand, increased competition, and economic downturns in China, among others.
Investors are encouraged to read the prospectus supplement, available from the company or on the SEC's website, for a more comprehensive understanding of the offering and the associated risks. The stock has experienced significant volatility, with a one-year price decline of 62.94% according to InvestingPro data, making thorough due diligence crucial for potential investors.
This news is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy in any jurisdiction where such an offer would be unlawful.
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