Wetouch Technology announces $38.8 million private placement with controlling shareholders

Wetouch Technology Inc. (NASDAQ:WETH) announced on Friday that it has entered into share purchase agreements with its controlling shareholders, Qixun Technology Limited and Qihong Technology Limited, for a private placement of common stock. The information is based on a press release statement filed with the Securities and Exchange Commission.

According to the filing, Wetouch Technology will issue and sell a total of 31,037,830 shares of its common stock at a purchase price of $1.25 per share. The transaction is expected to generate gross proceeds of $38,797,287.50. The offering price is described as being at a premium to market under Nasdaq rules.

The closing of the private placement is expected to occur on or about Monday, subject to customary closing conditions. The shares issued in this transaction will be subject to a one-year lock-up period.

Management of Wetouch Technology will have sole discretion over the use of proceeds from the offering. The company stated that it intends to use the funds to obtain touch-screen complete systems, either through in-house development or by acquiring systems from established manufacturers.

The shares are being issued without registration under the Securities Act of 1933, relying on exemptions provided by Section 4(a)(2) and Rule 506 of Regulation D. Both purchasers represented that they are accredited investors and are acquiring the shares for investment purposes.

Wetouch Technology is incorporated in Nevada and its principal executive offices are located in Meishan City, Sichuan, China. Its common stock is listed on the Nasdaq Stock Market under the symbol WETH.

The disclosure is based solely on the company’s statement in its SEC filing.