BEIJING - TuanChe Limited (NASDAQ: TC), an automotive marketplace in China, has entered into an agreement with an institutional investor for the sale of 761,719 American Depositary Shares (ADSs) and concurrent private placement of warrants to purchase an equal number of ADSs. The transaction, set to close on October 28, 2024, involves an effective offering price of $1.449 per ADS, with the warrants exercisable immediately at the same price and expiring five years from issuance.
This deal leverages an effective shelf registration statement previously filed with the U.S. Securities and Exchange Commission and declared effective on September 8, 2022. Maxim Group LLC is the exclusive Placement Agent for this offering. The securities in this private placement have not been registered under the Securities Act of 1933 and are therefore subject to restrictions on their sale.
The company, TuanChe, connects consumers with automotive industry players through integrated online platforms and offline events, offering marketing and transaction-related services. With its proprietary data analytics and digital marketing systems, TuanChe aims to enhance the efficiency of advertising placements for its industry customers.
The ADSs (or ADS Equivalents) and the accompanying warrants were offered under Section 4(a)(2) of the Securities Act and Regulation D promulgated thereunder. The issuance of these securities is subject to customary closing conditions.
The company's announcement includes forward-looking statements, which are subject to market conditions and inherent risks and uncertainties. TuanChe has clarified that it does not intend to update any forward-looking statements unless required by law.
This news is based on a press release statement and does not constitute an offer to sell or a solicitation of an offer to buy the securities. When available, the prospectus supplement relating to the registered direct offering can be obtained from the SEC's website or directly from Maxim Group LLC.
InvestingPro Insights
TuanChe Limited's recent agreement for the sale of ADSs and warrants comes at a challenging time for the company, as revealed by InvestingPro data. The company's market capitalization stands at a modest $3.26 million, reflecting its current position in the market.
InvestingPro Tips highlight that TuanChe's revenue has been declining significantly, with a 44.92% decrease over the last twelve months as of Q2 2024. This aligns with the company's efforts to raise capital through the sale of ADSs and warrants, possibly to bolster its financial position amidst declining revenues.
The company's price-to-book ratio of -3.13 as of Q2 2024 suggests that the market values the company at less than its book value, which could be a concern for potential investors. This metric, combined with the negative P/E ratio of -0.19, indicates that TuanChe is currently unprofitable.
Despite these challenges, TuanChe maintains a gross profit margin of 55.94% for the last twelve months as of Q2 2024, demonstrating some strength in its core business model. However, the operating income margin of -110.25% for the same period suggests significant operational challenges.
It's worth noting that InvestingPro offers additional tips and insights that could provide a more comprehensive view of TuanChe's financial health and market position. Investors interested in a deeper analysis can find 9 more InvestingPro Tips for TuanChe, which could be valuable in assessing the potential impact of this new agreement on the company's future prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.