Ostin Technology Group's Strategic PIPE Agreement: Key Financial Insights

Here are the key insights extracted from the financial report of Ostin Technology Group Co., Ltd., as reported in their Form 6-K:

1. Company Overview:

• Name: Ostin Technology Group Co., Ltd.
• Location: Building 2, 101 1 Kechuang Road, Qixia District, Nanjing, Jiangsu Province, China.
• SEC Commission File Number: 001-41362.

2. Material Agreement:

• The company entered into a Securities Purchase Agreement on February 10, 2025 with certain individual investors, referred to as "Purchasers".
• Share Issuance: The company will sell 965,513 Class A ordinary shares at a price of $1.45 per share through a private investment in public equity (PIPE).

3. Conditions of the Agreement:

• The agreement includes typical representations, warranties, and indemnification rights.
• The company is restricted from issuing any ordinary shares or equivalents for 20 months post-closing without majority consent from the Purchasers.

4. Warrants:

• Purchasers will receive warrants to buy additional shares, equal to 300% of the shares they purchase.
• The initial exercise price for these warrants is $5.00 per share, with an adjustment mechanism based on Nasdaq listing rules.

5. Loan Agreement:

• A Loan Agreement dated December 27, 2024, was established, where a lender agreed to provide $1.2 million for one month.
• This loan was assigned to the Purchasers under a Loan Assignment and Assumption Agreement on February 10, 2025, with the debt being surrendered in exchange for the Class A shares.

6. Proceeds and Use of Funds:

• The PIPE is expected to close on or about February 18, 2025, pending customary closing conditions.
• The gross proceeds anticipated from this PIPE transaction are approximately $1.4 million, which will be utilized for working capital.

7. Lock-Up Agreements:

• All Purchasers have agreed to a Lock-Up Agreement for 20 months post-closing, restricting them from selling any Class A shares.
• Certain affiliated shareholders have also entered into a separate Affiliate Lock-Up Agreement with similar terms.

8. Regulatory Exemption:

• The transaction is exempt from registration under Regulation S of the Securities Act of 1933, meaning the securities cannot be resold in the U.S. without proper registration or an exemption.

9. Signatories:

• The report is signed by Tao Ling and Lai Kui Sen, both serving as Co-CEOs.

10. Date of Report: February 14, 2025.

This report signifies a strategic move by Ostin Technology Group to raise capital while also managing shareholder equity and potential dilution through structured agreements surrounding the issuance of shares and warrants.