Just eight months into the year, stock markets in the U.S have already recorded more IPOs than they did in the whole of 2020, with technology and healthcare firms topping the list. DatChat Inc., a company focused on information security services powered by blockchain technology, recently priced its initial public offering.
Services of the secure messaging app are designed to meet the growing demand for online privacy, at a time when the call for social media censorship is getting louder.
2.9 Million Shares
The New Jersey-based tech firm is offering 2.9 million shares at a price of $4.15 apiece. The offering is expected to generate net proceeds of around $12 million. The lead book-running manager in the offering is EF Hutton. The Nasdaq Global Market has given the green signal to list the stock under the ticker symbol DATS. The stock is scheduled for listing on Tuesday.
Meanwhile, the management has revealed plans to use the proceeds from the offering mainly for product development and marketing, besides general corporate activities.
Earlier, DatChat had issued 398,499 shares at $4 per share between January and March 2021, in private placements. According to the management, the company is unlikely to generate revenue and become profitable in the near future. Neither does it plan to pay any cash dividends in the near term.
The platform offers solutions that allow customers to use messaging platforms in a secured manner, mainly by having control over messages and posts even after they are sent. Its features include options to hide secret/encrypted messages behind a cover and delete chats permanently from both the senders’ and recipients’ devices without any timeframe.
The application can also disable screenshots of messages sent to a recipient. Currently, the company is developing a feature that helps users have control over the forwarding of their messages by recipients.
The lack of a strong customer base and absence of revenue are the primary risks facing DatChat. Also, its heavy dependence on the smartphone market, which is subject to rapid technological changes, would demand constant innovation.
However, DatChat’s offerings are highly relevant in today’s world where there is growing concern about the threat to freedom of speech, especially in social media. The company was originally incorporated in December 2014 under the name YssUp Inc. and was renamed to DatChat Inc. a few months later. It was founded by Darin Myman, who has served as the CEO since then.
DatChat incurred a loss of around $979,470 or $0.07 per share in fiscal 2020, which marked an improvement from the previous year when it suffered a loss of $6.56 million or $0.51 per share. Total operating expenses increased 11% to around $1 million last year. General and administrative expenses were almost flat at $0.3 million.
Stocks you may like:
The business world is still struggling to come out of the virus-induced slowdown, but it seems almost every retail segment benefited from the pandemic at some point. The vaccination drive
General Mills (GIS): Three factors that are expected to help drive growth for the food company going forward
Shares of General Mills Inc. (NYSE: GIS) were up 3.2% on Wednesday after the company delivered better-than-expected results for the first quarter of 2022. Net sales rose 4% year-over-year to
It is estimated that the alternative investments industry has expanded at a compound annual rate of 10.2% over the past ten years and had $11 trillion in assets under management