TNL Mediagene Sells $6.25M Of Convertible Prefs To Vector Advisory Partners In Private Placement

Subject to receipt of required shareholder, Nasdaq, Cayman Islands and other approvals, the transaction is expected to result in Vector holding securities representing approximately 80% of the Company's fully diluted ordinary shares on an as-converted basis, resulting in a change of control of the Company.

Under the terms of the agreement, Vector will invest an aggregate of $6.25 million, consisting of a $1.5 million signing payment and a $4.75 million closing payment. The Company expects to use the proceeds for approved debt repayments and transaction expenses, with the remaining proceeds retained as permanent equity and working capital, including an initial operating-transition reserve of at least $750,000 unless Vector otherwise approves. Up to $800,000 may be designated after closing as a discretionary issuer-repurchase reserve, subject to further board approval and applicable legal and Nasdaq requirements.

The investment is structured as perpetual preferred equity with a 1.0x non-participating liquidation preference and no stated maturity, mandatory redemption obligation, holder put right or mandatory cash dividend. At closing, the Company expects to issue approximately 938,257 Series A Convertible Preferred Shares for an allocated purchase price of approximately $1.56 million and approximately 2,816,647 Series B Convertible Preferred Shares for an allocated purchase price of approximately $4.69 million, with both series fully paid at closing and each series having an original issue price of approximately $1.66449 per share. Before receipt of the required approvals, the Series A Convertible Preferred Shares will carry only those conversion and governance rights that may be exercised without further approval and are expected to represent approximately 19.99% of the Company's fully diluted ordinary shares on an as-converted basis, consistent with applicable Nasdaq shareholder-approval limitations. The Series B Convertible Preferred Shares will not be convertible or carry approval-gated governance rights unless and until the applicable approvals are obtained and effective. Following receipt of those approvals, the two series together are expected to represent approximately 80% of the Company's fully diluted ordinary shares on an as-converted basis.

The transaction is expected to close on a mutually agreed date no later than the tenth calendar day following the effective date of the Securities Purchase Agreement, subject to the satisfaction or permissible waiver of specified closing conditions, including required corporate, regulatory and compliance matters. Vector's obligation to close is not subject to any due-diligence, confirmatory-review, financing or discretionary-satisfaction condition.

As part of the transaction, Vector may designate one individual for appointment to the Company's Board of Directors at closing, subject to applicable legal, Nasdaq and Cayman Islands requirements, the Company's organizational documents and customary director diligence. Additional governance rights contemplated by the transaction, including governance rights associated with the anticipated change of control, will become effective only following receipt of the applicable required approvals.