SOKO Fitness & Spa Group, Inc. announced yesterday the completion of a non-brokered private placement of 3,125,000 shares of common stock at a purchase price of $3.20 per share. This yielded gross proceeds of $10 million to SOKO.
They made the offering to select institutional and accredited investors. These included two affiliates of IDG Capital Partners and existing investor Guerilla Capital and their affiliates. IDG Capital Partners is a China-focused investment firm. They have a strong record of accomplishment of providing capital for Chinese growth companies. Guerilla Capital Management and their affiliates are active China investors. There was no issuing of warrants to the investors in the offering, and there was no utilizing of a placement agent.
SOKO expects to use the proceeds of the offering to speed up their growth strategy. This includes the opening of new spa and fitness facilities and the pursuit of strategic acquisitions. The Company will also use the proceeds for general corporate purposes. With this financing, they now expect to open more facilities in calendar 2010 than their earlier guidance of seven to nine new facilities planned for this calendar year.
Tong Liu, Chief Executive Officer of SOKO Fitness & Spa Group, Inc., said, “We pursued this financing in order to accelerate the execution of our already aggressive growth plan. We are developing our business rapidly, but are still in the initial stages of our growth. This cash infusion, our first since going public two years ago, significantly augments our balance sheet and offers us the near-term flexibility to capitalize on strategic opportunities to develop and acquire additional facilities.”
Founded in 1992, SOKO Fitness & Spa Group, Inc. is an operator of fitness centers, beauty salons, and spas in Northeast China as well as suburban Beijing. The Company provides programs, services, and products together with exercise, education, and nutrition to help their members lead a healthy life and achieve their fitness goals. They have their corporate headquarters in Harbin, Heilongjiang Province, China.