EEIQ Stock Price Increases Over 400% Pre-Market: Why It Happened

By Amit Chowdhry ● March 26, 2021
  • The stock price of Elite Education Group International Ltd (NASDAQ: EEIQ) has increased by over 400% pre-market. This is why it happened.

The stock price of Elite Education Group International Ltd (NASDAQ: EEIQ) – a provider of comprehensive, one-stop education solutions for Chinese university students interested in study abroad programs in the US and other countries – has increased by over 400% pre-market. Investors appear to be responding to Elite Education Group International Limited announcing the pricing of its firm commitment initial public offering of 750,000 units at an offering price of $8 per unit for total gross proceeds of $6 million.

Each unit will immediately separate into one common share, one Series A warrant, and one Series B warrant. And the Series A warrants permit the holder to purchase one common share at an exercise price of $5.00 and expire after 5 years. And the Series B warrants permit the holder to purchase one common share at an exercise price of $10 and expire after 5 years, and contain an exchange feature that will permit the holder to exchange the warrant into common shares on a one-for-one basis any time commencing the earlier of 15 days from the warrant issuance date or the time when $10 million of volume is traded in the common shares, if the volume-weighted average price of common shares on any trading day on or after the date of issuance fails to exceed the exercise price of the Series B warrants.

Elite Education had also granted the underwriters a 45-day option to purchase up to an additional 112,500 shares of common stock at a price of $7.98 and/or Series A Warrants to buy up to an aggregate of 112,500 shares of common stock at a price of $0.01 and Series B Warrants to purchase up to an aggregate of 112,500 shares of common stock at a price of $0.01, in any combinations thereof, at the public offering price per security, to cover over-allotments, if any.

The company’s common shares started trading on the NASDAQ Capital Market on March 25, 2021, under the ticker symbol “EEIQ.” And the net proceeds to EEG from the sale of the securities are expected to be approximately $4.3 million, after deducting underwriting discounts and commissions and estimated offering expenses. 

EEG intends to use net proceeds of this offering for expanding its existing and future student dormitory facilities at Miami University of Ohio, supporting its expansion into the Canadian, Southeast Asian and UK educational markets, expanding its student recruitment channels, and for working capital and general corporate purposes.

ViewTrade Securities acted as the sole book-running manager for the offering. And the closing of the offering is expected to take place on or about March 29, 2021, subject to the satisfaction or waiver of customary closing conditions.

Interestingly, it appears that other Chinese education companies that have seen their stock price increase pre-market today include Wah Fu Education Group (+100%), China Liberal Education Holdings (+40%), Four Seasons Edu (+40%).

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.