Lichen China Limited Announces $2.8 Million Registered Direct Offering

Rhea-AI Summary

Lichen China (LICN) has announced a registered direct offering of 20,000,000 Class A ordinary shares at $0.14 per share, expected to raise approximately $2.8 million in gross proceeds. The offering includes pre-funded warrants with an exercise price of $0.001 per share. The transaction is anticipated to close around December 27, 2024, subject to customary closing conditions. Univest Securities, is serving as the sole placement agent for this offering, which is being conducted under a previously filed shelf registration statement that became effective on March 1, 2024.

Positive

• Secured $2.8 million in additional funding through share offering

Negative

• Significant dilution with 20,000,000 new shares being issued
• Low share offering price of $0.14 per share indicates weak market position

Insights

Financial Analyst

This $2.8 million registered direct offering by Lichen China represents a significant dilution event, with 20 million new shares being issued at $0.14 per share - a substantial discount to current market prices. The dilution impact is particularly concerning given LICN's market cap of approximately $10 million. The offering effectively doubles the company's outstanding shares, severely impacting existing shareholders' ownership stakes. The extremely low pricing suggests desperate financing conditions and weak investor confidence. The inclusion of pre-funded warrants with a minimal $0.001 exercise price further compounds the dilutive effect. While the capital raise provides some short-term liquidity, the terms and structure signal significant financial stress and raise questions about the company's ability to secure more favorable financing options. The timing near year-end also suggests urgency in securing funds, potentially indicating cash flow pressures.

Investment Banking Specialist

The structure of this offering reveals concerning details about LICN's market position. Utilizing a registered direct offering rather than a traditional public offering typically indicates institutional interest. The extreme discount to market price and the pre-funded warrant structure are defensive financing mechanisms often employed when companies struggle to attract conventional equity investment. Univest Securities acting as the sole placement agent, rather than a syndicate of banks, suggests marketing reach and institutional appetite. The shelf registration usage, while providing quick access to capital, often signals a company's expectation of needing multiple rounds of financing. The $0.14 per share price point reflects severe market skepticism about LICN's business model and growth prospects. This financing appears more like a survival mechanism than a growth capital raise.

XIAMEN, China, Dec. 26, 2024 /PRNewswire/ -- Lichen China Limited (Nasdaq: LICN) ("Lichen China" or the "Company"), a dedicated financial and taxation service provider in China today announced that it has entered into a definitive agreement with several investors for the purchase and sale of an aggregate of 20,000,000 of the Company's Class A ordinary share, par value $0.00004 per share (the "Shares") (or pre-funded warrants in lieu thereof) at a purchase price of $0.14 per share in a registered direct offering. The purchase price for the pre-funded warrants is identical to the purchase price for Shares, less the exercise price of $0.001 per share.

The aggregate gross proceeds to the Company of this offering are expected to be approximately $2.8 million. The transaction is expected to close on or about December 27, 2024, subject to the satisfaction of customary closing conditions.

Univest Securities, LLC is acting as the sole placement agent.

The registered direct offering is being made pursuant to a shelf registration statement on Form F-3 (File No. 333-277230) previously filed by the Company and declared effective by the U.S. Securities and Exchange Commission ("SEC") on March 1, 2024. A final prospectus supplement and accompanying prospectus describing the terms of the proposed offering will be filed with the SEC and will be available on the SEC's website located at http://www.sec.gov. Electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, by contacting Univest Securities, LLC at info@univest.us, or by calling +1 (212) 343-8888.

This press release does not constitute an offer to sell or the solicitation of an offer to buy, nor will there be any sales of such securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction. Copies of the prospectus supplement relating to the registered direct offering, together with the accompanying base prospectus will be filed by the Company and, upon filing, can be obtained at the SEC's website at www.sec.gov.

About Lichen China Limited

Lichen China Limited focuses on providing financial and taxation solution services, education support services, and software and maintenance services under its "Lichen" brand. In recognition of the Company's expertise and experience in the financial and taxation solution services industry for over 18 years, the Company has built up its reputation as a dedicated financial and taxation solution services provider of professional and high-quality services in China. For more information, please visit the Company's website: https://ir.lichenzx.com/.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and in its other filings with the U.S. Securities and Exchange Commission.

For more information, please contact:

Tian Sun
Phone: +86-0592-5586999
Email: ir@lichenzx.com

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SOURCE Lichen China Limited

FAQ

How much money is Lichen China (LICN) raising in its December 2024 offering?

Lichen China (LICN) is raising approximately $2.8 million through a registered direct offering of 20,000,000 Class A ordinary shares.

What is the share price for LICN's December 2024 registered direct offering?

The shares are being offered at $0.14 per share, with pre-funded warrants available at the same price less $0.001 exercise price.

When is LICN's $2.8 million registered direct offering expected to close?

The offering is expected to close on or about December 27, 2024, subject to customary closing conditions.

Who is the placement agent for LICN's December 2024 share offering?

Univest Securities, is acting as the sole placement agent for the offering.