It looks like Dragonite's e-cigarette business is moving to the US and be based in Southern California, funded by yet another capital raise. As described, here are the use of proceeds:
The Group is mainly engaged in (i) production and sales of health care products, pharmaceutical products and RUYAN atomizing cigarettes, (ii) securities trading and investment, and (iii) property investment.
Electronic cigarettes are a core business of the Group. The Group is the leader in electronic cigarette technology with an extensive patent portfolio. In order to facilitate the enforcement and commercialization of the Group’s intellectual property rights in the United States, the Company plans to establish a wholly-owned
subsidiary in Southern California. Such new subsidiary will also facilitate sales, marketing, regulatory compliance, and public relations in regard to the Group’s electronic cigarette business in the United States.
Upon Completion, the gross proceeds to be raised from the Placing will be approximately HK$21.5 million. After taking into account the estimated expenses in relation to the Placing, the estimated net proceeds from the Placing will be approximately HK$20.4 million, representing a net price of HK$0.063 per Placing
Share. The entirety of the net proceeds raised from the Placing will be dedicated to the paid-up capital of the aforesaid new subsidiary in Southern California.
The Directors consider that the Placing represents a good opportunity to raise additional funds for establishing a new subsidiary in Southern California and the Placing will widen the Company’s shareholder base. The Directors also consider that
the terms of the Placing, including the rate of the placing commission, are fair and reasonable compared with current market practice. Accordingly, the Directors are of the view that the Placing is in the interests of the Company and the Shareholders as a whole.
