Urban Tea Inc (NASDAQ:MYT) shares are trading lower by 38% Wednesday morning after the company announced a $25 million direct offering which consists of 6.95 million shares at $3.60 per share.

Urban Tea is engaged in specialty tea product distribution and retail business. The company offers trendy tea drinks, light meals, and pastries through its stores. The tea-based beverages include fresh milk tea, fruit tea and milk cap tea. Revenue is predominantly generated from the stores operated by the company.