F-1/A: TNL Mediagene Amends F-1 for Share Resale, Details Losses

TNL Mediagene filed an F-1/A registration statement to register the resale of up to 8,558,677 ordinary shares by selling securityholders, while disclosing significant financial losses and a going concern doubt.

Summary

• TNL Mediagene filed an F-1/A registration statement to register the offer and resale of up to 8,558,677 ordinary shares by certain selling securityholders.
• This includes up to 8,000,000 shares from 3i, LP, potentially issued from a $4,722,222 convertible note, and 558,677 shares issued for the acquisition of Green Quest Holding Inc.
• The company will not receive any proceeds from these share resales.
• For the fiscal year ended December 31, 2024, TNL Mediagene reported a net loss of $84,976,720, a significant increase from a net loss of $1,215,789 in 2023.
• Operating loss for 2024 was $76,344,202, compared to $7,395,611 in 2023.
• Revenue increased by 35.3% from $35,838,780 in 2023 to $48,493,897 in 2024, primarily due to the full-year consolidation of Mediagene's revenue.
• The company recognized a substantial impairment loss on intangible assets, including goodwill, of $29,026,050 in 2024, mainly from Mediagene ($25.5 million) and Polydice Inc. ($3.1 million).
• As of December 31, 2024, the company had negative working capital of $15,270,853 and net operating cash outflow of $10,212,070.
• The outstanding balance of the Initial Note to 3i, LP is $2,490,638.90 as of the prospectus date.
• The company has issued 2,002,222 ordinary shares to 3i, LP and made cash repayments totaling $1,178,483.36 under the Initial Note.
• TNL Mediagene has requested and Tumim Stone Capital LLC has made seven ELOC Purchases totaling 1,286,000 shares for an aggregate consideration of $763,597.00 at an average price of $0.59 per share.
• The company's ordinary shares are quoted on The Nasdaq Capital Market (Nasdaq) under the symbol TNMG, with a closing price of $0.45 per share on August 18, 2025.
• The company received a deficiency letter from Nasdaq on May 7, 2025, for not meeting the minimum $1 bid price requirement.

Sentiment

Score: 2

Explanation: The company faces severe financial challenges, including substantial and increasing net losses, negative working capital, and negative operating cash flow, leading to a 'going concern' warning. While revenue grew, it was largely due to acquisitions, and significant impairment losses indicate integration difficulties. The Nasdaq minimum bid price deficiency further highlights operational and market challenges, outweighing any positive strategic initiatives or audience growth.

Positives

• Revenue increased by 35.3% year-over-year to $48.5 million in 2024, driven by the full-year consolidation of Mediagene's revenue and growth in digital studio projects.
• The company has a diversified client base of over 850 regional and global advertising clients, with many corporate engagements lasting three to five years.
• TNL Mediagene's digital media brands reach over 45 million average monthly unique users (MUU) and over 189 million average monthly digital footprints, with a prominent Millennial and Gen Z audience demographic.
• The company is developing proprietary high-quality firstand zero-party data, which is valuable in the evolving cookieless advertising era.
• Secured service contracts exceeding $5.9 million in fees through its subsidiary S.C. Integrated Marketing Communication Co., Ltd. as of December 31, 2024, which are yet to be recognized as revenue.
• Maintained good reputation and banking credit, securing approximately $3.9 million in loan facilities from financial institutions.

Negatives

• Incurred a significant net loss of $84,976,720 in 2024, primarily due to one-off transaction costs related to the Merger and a substantial impairment loss on intangible assets.
• Reported recurring losses from operations, negative working capital of $15,270,853, and net operating cash outflow of $10,212,070 for the fiscal year ended December 31, 2024, raising substantial doubt about its ability to continue as a going concern.
• Recognized a significant impairment loss of $29,026,050 on intangible assets, including $25.5 million against Mediagene's goodwill due to anticipated synergies falling short of initial expectations.
• Experienced a dramatic decrease in website traffic for its health-oriented digital media brand, MYLOHAS (rebranded as ROOMIE KITCHEN), due to a Google search algorithm update in October 2019, reducing monthly pageviews from 22 million to 3 million.
• Sales, general and administrative expenses increased significantly by $45.6 million in 2024, largely due to $38.2 million in non-cash listing expenses and $1.3 million in professional services expenditures related to the Nasdaq listing.
• Finance costs increased substantially to $8.2 million in 2024 from $0.3 million in 2023, mainly due to the issuance of convertible notes at a significant discount, resulting in a $7.7 million finance cost.

Risks

• Recurring losses from operations, negative working capital, and negative cash flows from operating activities raise substantial doubt about the company's ability to continue as a going concern.
• Adverse economic conditions in Japan, Taiwan, and globally, including potential recession, inflation, and geopolitical tensions, could negatively affect business, financial condition, and liquidity.
• Failure to increase user numbers or a decline in user engagement or ad engagement with digital media brands and content could harm revenue and operating results.
• The market for digital advertising is continuously and rapidly evolving; failure to respond successfully to changes or slower-than-expected market development could adversely affect growth and financial condition.
• Inability to compete effectively with competitors for users and advertising spend could harm business and operating results.
• Significant portion of revenue is derived from digital media content and related advertising technology and data analytics services, and advertisers do not have long-term commitments.
• Inability to successfully integrate acquired businesses (like Mediagene) and realize anticipated benefits or synergies could lead to significant costs and disruption.
• Loss of key personnel or failure to attract and retain highly qualified personnel could harm the business.
• Exposure to fluctuations in currency exchange rates, particularly Japanese yen and New Taiwan Dollar, could harm operating results.
• Reliance on third-party platforms and online search engines (e.g., Google, Facebook) for user acquisition means changes to their terms, conditions, or algorithms could adversely affect the business.
• Reliance on licensed trademarks, copyrights, and other intellectual property rights from third-party licensors, with potential loss of rights if licenses are not renewed or licensors are acquired.
• Use of third-party content creators and social media influencers may materially and adversely affect reputation if they engage in negative behavior or commentary.
• Disruptions in products and services due to service delays, outages, data loss, or reliance on Amazon Web Services (AWS) could harm business and reputation.
• Reliance on open-source and third-party AI software may pose risks to proprietary advertising technology and data analytics products, including unfavorable license conditions or competitive harm.
• Business is subject to complex and evolving laws and regulations in Japan and Taiwan (e.g., privacy, data protection, content regulation), with potential for claims, penalties, or changes to business practices.
• Geopolitical tension between Taiwan and mainland China poses economic and political risks that could negatively affect the business.
• Exposure to natural disasters (earthquakes, typhoons) and man-made problems (terrorism) in Japan and Taiwan could interrupt operations.
• The price of securities may be volatile and decline, and sales of substantial numbers of shares by existing securityholders could cause dilution and depress market price.
• As a foreign private issuer, the company is not subject to certain U.S. proxy rules and Exchange Act reporting obligations, potentially offering less protection to shareholders.
• Identified material weaknesses in internal control over financial reporting, which if not remediated, could lead to inaccurate financial reporting or untimely periodic reports.
• May not be able to comply with Nasdaq's continued listing standards (e.g., minimum bid price), which could limit investors' ability to trade shares.
• Does not intend to pay dividends for the foreseeable future, meaning return on investment depends on share price appreciation.
• Does not intend to make determinations on whether it or its subsidiaries are Controlled Foreign Corporations (CFCs) for U.S. federal income tax purposes, potentially impacting U.S. Holders.
• If characterized as a Passive Foreign Investment Company (PFIC) for U.S. federal income tax purposes, U.S. Holders may suffer adverse U.S. federal income tax consequences.
• Difficulties in protecting interests and enforcing rights through U.S. Federal courts due to incorporation in the Cayman Islands and executive offices in Japan and Taiwan.

Future Outlook

The company aims to expand its customer base and prudently control expenses. It plans to continue investing in sophisticated data assets, increase user engagement, consolidate its position in existing media categories, expand into new geographies (East and Southeast Asia, excluding mainland China), deliver market-leading return on advertising spend (ROAS), and expand its client base. Future growth is expected to increase costs related to hiring and infrastructure, potentially outpacing revenue growth in the short-to-medium term. The company expects seasonality to increase as it grows into additional geographic markets and serves more multinational clients, with revenue typically highest in the fourth quarter.

Management Comments

• Management believes that adjusted EBITDA facilitates operating performance comparisons on a period-to-period basis and excludes items not indicative of core operating performance.
• Management intends to continue to pursue plans for improving operating conditions and raising additional capital, but there can be no assurance of success in obtaining sufficient funding on acceptable terms.
• Management has determined the values assigned to key assumptions for goodwill impairment testing based on past performance, market development expectations, current industry trends, and long-term inflation forecasts.

Industry Context

TNL Mediagene positions itself as Asia's next-generation media company, built around diverse digital media brands and AI-powered advertising and data analytics solutions. It operates primarily in Japan and Taiwan, targeting Millennial and Gen Z audiences. The company believes the digital media industry is at an inflection point, moving away from traditional mass reach models to data analytics and performance advertising (ROAS and retail media). It aims to leverage its owned media brands to collect firstand zero-party data, providing a competitive advantage in a cookieless advertising environment. The company competes with other digital content providers, marketing technology solutions providers, advertising market platforms, market research firms, and traditional advertising agencies.

Comparison to Industry Standards

• In terms of average Monthly Unique Users (MUU), TNL Mediagene claims to outrank major media outlets in East Asia and Southeast Asia, including Nikkei and Asahi in Japan, United Daily News and Liberty Times in Taiwan, and South China Morning Post in Hong Kong.
• The company states its MUU is comparable to major media outlets in the United States, including CNBC, The Washington Post, and Time.
• TNL Mediagene's approach of owning and operating its own media brands provides valuable first-party audience data, differentiating it from digital advertising and marketing companies that do not own media brands and are more dependent on tracking cookies.
• The company's focus on performance advertising (ROAS) and retail media aligns with a growing industry trend where advertising clients demand measurable results beyond mere ad impressions.

Management Changes

Corporate Governance

Legal Proceedings

• The company is currently not involved in any material legal or administrative proceedings.
• The company may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business, including those related to defamation, intellectual property rights, and regulatory matters.

Related Party Transactions

• The company has service cost transactions with Ad Hu Tung Co., Ltd. and AccuHit AI Technology Taiwan Co., Ltd.
• Outstanding loans from related parties including Yi Chuan ($400,000), Tzu-Wei Chung ($304,971), and Yu-Ling Yang ($91,491) as of December 31, 2024.
• Key management personnel, Tzu-Wei Chung, provided guarantees for the company's short-term and long-term bank loans.
• The Sponsor (Blue Ocean Sponsor, LLC) and Apollo (Apollo SPAC Fund I, L.P. and Apollo Credit Strategies Master Fund Ltd.) are entitled to receive 2,726,418 Earn-Out Shares, subject to vesting conditions.
• The Sponsor and Apollo hold 4,437,057 TNL Mediagene Warrants converted from Blue Ocean Private Placement Warrants.
• The company assumed obligations of Blue Ocean under the 2024 Sponsor Promissory Note through the issuance of convertible promissory notes to certain lenders of the Sponsor.
• Certain members of Blue Ocean's board of directors, management team, and advisory board, and other shareholders of Blue Ocean, were November PIPE Convertible Note Investors.

Stakeholder Impact

• **Shareholders:** Face significant dilution risk from the resale of up to 8,558,677 ordinary shares by selling securityholders, and potential further dilution from future equity financings and warrant exercises. The substantial net losses, negative working capital, and 'going concern' doubt indicate high investment risk. The Nasdaq minimum bid price deficiency could lead to reduced liquidity and trading restrictions.
• **Employees:** The company's ability to continue as a going concern and attract/retain talent is crucial. Share-based compensation plans are in place, but the company's financial health could impact their value. The company emphasizes diversity and inclusion and provides competitive compensation and benefits.
• **Customers/Clients:** The company aims to provide 'one-stop access' for digital advertising and marketing needs, focusing on Millennial and Gen Z audiences. Continued investment in AI-powered solutions and data analytics aims to deliver higher ROAS and competitive advantages. However, adverse economic conditions or failure to adapt to market changes could impact service demand.
• **Creditors:** The 'going concern' doubt and negative working capital indicate increased risk for creditors. The company has significant outstanding debt and relies on loan facilities and promissory notes for financing.

Next Steps

• Actively expand customer base and prudently control expenses to improve operating conditions.
• Secure additional revenue and obtain sufficient funding on acceptable terms to fund continuing operations.
• Remediate identified material weaknesses in internal control over financial reporting.
• Regain compliance with Nasdaq's Minimum Bid Price Rule by November 3, 2025.
• Continue to invest in sophisticated data assets and AI-powered data analytics tools.
• Increase user engagement and expand digital media brands coverage into new categories.
• Broaden geographical reach and acquire new digital media brands in new geographical markets (East and Southeast Asia, excluding mainland China).
• Deliver market-leading ROAS to clients and expand client base through cross-selling and new relationships.
• Submit Ms. Naoko Okumoto's appointment as a director to shareholders for approval at the 2025 Annual General Meeting or other shareholders meeting.

Key Dates

Recommendation

TNL Mediagene's financial position is highly precarious, marked by a substantial and escalating net loss of $85 million in 2024, negative working capital, and persistent negative operating cash flows, leading to an explicit 'going concern' warning from its auditors. The significant impairment loss on goodwill related to the Mediagene merger indicates that anticipated synergies are not materializing as expected, raising concerns about the effectiveness of its growth strategy. Furthermore, the company is facing a Nasdaq delisting risk due to its low share price. While revenue growth is noted, it is overshadowed by the severe profitability issues and the potential for substantial dilution from the large volume of shares being registered for resale by existing securityholders. For a seasoned investor, these factors collectively present an extremely high-risk profile with a strong likelihood of further capital erosion, warranting a 'strong sell' recommendation.

Keywords

Digital Media, Advertising Technology, AI-Powered Analytics, SEC Filing, F-1/A, Nasdaq, TNMG, Convertible Notes, Equity Line of Credit, Going Concern, Impairment Loss, Share Resale, Japan, Taiwan, Millennial Audience, Gen Z Audience, Corporate Governance, Risk Factors, Financial Reporting, Media Industry, AdTech, Digital Studio, First-Party Data, Zero-Party Data