20-F: TNL Mediagene Details Securities Registered on Nasdaq

TNL Mediagene provides a comprehensive overview of its ordinary shares and warrants registered on The Nasdaq Stock Market LLC, outlining their material provisions and governing terms.

Summary

• This filing details the material provisions governing TNL Mediagene's securities registered under Section 12(b) of the Exchange Act of 1934, specifically its Ordinary Shares trading under the symbol TNMG on The Nasdaq Capital Market.
• The company is incorporated in the Cayman Islands and its affairs are governed by its amended and restated memorandum and articles of association, Cayman Companies Law, and common law.
• As of April 17, 2025, TNL Mediagene had 2,838,075 ordinary shares issued and outstanding, which were validly issued, fully paid, and non-assessable.
• The filing outlines the rights associated with Ordinary Shares, including voting rights (one vote per share), dividend rights (none paid to date), and liquidation rights (proportional participation in surplus assets).
• It also details the terms of various warrants, including 3i Warrants, Public Warrants, and Private Placement Warrants, specifying their exercise prices, expiration dates, and redemption conditions.
• Significant differences between Cayman Islands corporate law and U.S. corporate law are discussed, particularly concerning mergers, schemes of arrangement, and shareholder rights.
• The document also addresses anti-money laundering, sanctions, and data protection regulations applicable in the Cayman Islands.
• TNL Mediagene's financial statements for the years ended December 31, 2023, 2024, and 2025, are included, showing a net loss for each year, with the most recent loss being $44.6 million in 2025.
• The company has identified material weaknesses in its internal control over financial reporting, primarily related to accounting personnel, formalized financial reporting controls, and IT environment controls, and is implementing remediation measures.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the company's continued net losses, substantial impairment charges, and the ongoing concerns regarding its ability to continue as a going concern, despite some operational improvements and cost-saving measures.

Positives

• TNL Mediagene's ordinary shares are listed on The Nasdaq Capital Market, providing access to U.S. investors.
• The company has a diversified business model encompassing digital studio, media and branded content, and technology segments.
• The company is strategically pivoting to expand its digital studio business and deploy AI-based technology.
• TNL Mediagene has a substantial audience reach, with over 36 million average monthly unique users and a significant monthly digital footprint.
• The company possesses proprietary first- and zero-party data assets, which are valuable in the current data privacy landscape.
• TNL Mediagene has a diversified client base of over 850 clients, including multinational companies and government agencies.
• The company has implemented cost efficiency initiatives, including headcount optimization and office space consolidation, which are expected to reduce expenses in 2026.

Negatives

• The company has incurred recurring losses from operations, negative working capital, and negative cash flows from operating activities, raising substantial doubt about its ability to continue as a going concern.
• TNL Mediagene incurred a net loss of $44.6 million for the year ended December 31, 2025.
• The company has identified material weaknesses in its internal control over financial reporting, which could impact its ability to report financial results accurately.
• The company received a deficiency letter from Nasdaq regarding its closing bid price, although it has since regained compliance.
• The company's business is subject to significant risks related to macroeconomic conditions, competition, technological changes, and regulatory environments in Japan and Taiwan.
• The company has experienced significant impairment losses on intangible assets, including goodwill, due to lower-than-expected synergies from acquisitions.

Risks

• Adverse economic conditions in Japan, Taiwan, and globally, including recession, inflation, and geopolitical instability, could negatively impact the company's business and financial results.
• Failure to increase user numbers or maintain user engagement could harm revenue and operating results.
• The company's business is subject to rapid and continuous changes in industry trends and technology, and failure to adapt could adversely affect its prospects.
• Intense competition in the digital media, advertising technology, and digital studio markets could harm the company's business.
• The company's reliance on third-party platforms and search engines for user traffic could be negatively impacted by changes in their algorithms or policies.
• The development and use of AI technologies present both opportunities and risks, and failure to effectively deploy AI or misuse by third parties could adversely affect the business.
• Failure to comply with laws and regulations related to privacy, data protection, and consumer marketing practices could adversely affect the business.
• The company's international operations are subject to increased challenges and risks, including currency exchange rate fluctuations and differing legal and regulatory systems.
• The price of the company's securities may be volatile, and the value of its securities may decline.
• The company may not be able to comply with the continued listing standards of Nasdaq, which could lead to delisting.
• The company has identified material weaknesses in its internal control over financial reporting, and failure to remediate these could lead to inaccurate financial reporting.

Future Outlook

The company expects the trend of reduced organic search referral traffic due to AI-driven search engine algorithm changes to continue exerting pressure on its media and branded content and advertising technology revenues in 2026 and beyond. TNL Mediagene anticipates a revenue mix shift towards its digital studio and technology businesses, driven by client expansion, AI-assisted product development, and growth in retail media and e-commerce. Cost structure improvements are expected in 2026 due to efficiency initiatives implemented in the latter half of 2025, with certain public company compliance costs normalizing. Macroeconomic conditions, including geopolitical events and trade policies, remain a key risk factor for 2026.

Management Comments

• Management believes the combination of its digital studio capabilities, access to Millennial and Gen Z audiences, and the integration of AI-based technology tools positions it to expand client relationships and develop new revenue streams.
• The company believes its integrated digital studio capabilities, combined with AI-based tools, position it to deepen client relationships and expand its revenue base across Japan and Taiwan, with a vision to extend its reach into other East and Southeast Asian markets.
• Management believes its robust and growing portfolio of category-leading digital media brands provides valuable proprietary first-party audience data, supporting data analytics and advertising technology products and services without dependence on tracking cookies.
• Management believes its combination of businesses allows it to provide clients with a one-stop access point for their digital advertising and marketing needs and gives it an advantage over competitors who remain fragmented in their capabilities.
• Management believes its high-quality data and engagement offerings, coupled with investments in content creation and AI-powered data analytics, will enable clients to benefit from stronger engagement and higher ROAS, leading to growing wallet share for the company.
• Management believes that continued revenue growth in its digital studio and technology businesses, combined with cost efficiency initiatives, positions the company to make progress toward EBITDA profitability.

Industry Context

StockSavvy.ai notes that TNL Mediagene's financial performance is significantly influenced by broader industry trends in digital advertising, including the impact of AI on search engine algorithms and content discovery, which has led to reduced organic traffic and revenue headwinds. The company's strategic focus on its digital studio business and the integration of AI-assisted products and services aligns with industry shifts towards performance-based advertising and data-driven insights. The increasing reliance on first- and zero-party data in a cookieless era is a key differentiator for TNL Mediagene.

Comparison to Industry Standards

• TNL Mediagene's revenue decline of 7.2% in 2025, primarily attributed to AI-driven changes in search engine algorithms impacting organic traffic, reflects a broader industry challenge faced by digital media companies.
• The company's significant impairment losses on intangible assets, particularly goodwill related to the Mediagene acquisition, highlight the risks associated with achieving anticipated synergies in the digital media and technology sector, a challenge faced by many companies in this space.
• TNL Mediagene's strategic pivot towards AI-assisted products and services in its digital studio business aligns with the industry trend of leveraging AI to enhance operational efficiency and develop new client-facing offerings, a strategy adopted by many forward-thinking companies in the marketing and creative services sector.
• The company's reliance on first- and zero-party data to navigate the cookieless era is a proactive measure that positions it favorably compared to competitors heavily dependent on third-party cookies, a common industry challenge.
• The company's ongoing efforts to manage costs and improve operational efficiency, including headcount optimization and office consolidation, are standard practices for companies seeking to improve profitability in a competitive and evolving market.

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.

Related Party Transactions

• Sponsor Lock-Up and Support Agreement: Outlines agreements regarding the transfer of Earn-Out Shares and forfeiture of Founder Shares.
• New Registration Rights Agreement: Grants registration rights to certain shareholders for their securities.
• TNL Mediagene Shareholder Lock-Up and Support Agreement: Restricts the transfer of certain TNL Mediagene Ordinary Shares held by TNL Mediagene Shareholders.
• Blue Ocean Private Placement Warrants: Purchased by the Sponsor and Apollo, with terms identical to Public Warrants except for transferability and redemption restrictions for the Sponsor and Apollo.
• 2023 Sponsor Convertible Note: Issued to the Sponsor, with obligations assumed by TNL Mediagene through new convertible notes.
• 2024 Sponsor Promissory Notes: Issued to the Sponsor, with obligations assumed by TNL Mediagene through new convertible notes.
• November PIPE Convertible Notes: Subordinated unsecured convertible promissory notes issued to third-party investors and certain Blue Ocean insiders, which were automatically converted into TNL Mediagene Ordinary Shares.
• Service revenues and costs with Ad Hu Tung Co., Ltd. (Ad Hu) and AccuHit AI Technology Taiwan Co., Ltd. (AccuHit).
• Receivables from and payables to related parties, including Ad Hu and AccuHit.
• Intangible assets acquired from AccuHit.
• Guarantees provided by key management personnel (Tzu-Wei Chung) for the company's bank loans.
• Loans from related parties (Yi Chuan-Lin, Tzu-Wei Chung, Yu-Ling Yang, Hsiu Ling-Hsu, Chih Wei-Lee) with associated interest payable.

Stakeholder Impact

• Shareholders: Potential dilution from future equity issuances, volatility in share price, and risks associated with the company's going concern status. However, the listing on Nasdaq provides access to a broader investor base.
• Employees: The company provides compensation and benefits programs, including stock options and restricted shares, and is committed to diversity and inclusion. However, the company's financial performance and potential restructuring could impact job security.
• Creditors: The company's ability to service its debt obligations is dependent on its ability to raise additional capital and improve operating conditions, as indicated by its going concern disclosures.
• Suppliers: The company's financial health and operational stability are crucial for its suppliers. The company's cost efficiency initiatives might impact supplier relationships if they lead to reduced order volumes or tighter payment terms.
• Customers: The company aims to provide integrated digital studio, media, and technology solutions. Its strategic pivot towards AI and focus on audience engagement are intended to enhance customer value.

Next Steps

• The company plans to continue expanding its customer base while prudently controlling expenses.
• Management intends to actively pursue cost management, issuance of equity and promissory notes, and renewal of loan facilities.
• The company plans to continue investing in AI-based technology to enhance operational efficiency and develop new products and services.
• TNL Mediagene will continue to expand its digital studio business by deepening client relationships and developing new AI-assisted offerings.
• The company will continue to monitor the effectiveness of its remediation measures for internal control over financial reporting and evaluate if material weaknesses have been fully remediated.

Key Dates

Recommendation

While TNL Mediagene has made progress in cost management and is strategically positioning itself in AI and digital studio services, the company continues to face significant financial challenges, including recurring losses and a substantial accumulated deficit. The going concern disclosure and material weaknesses in internal controls are significant risks. However, the company's Nasdaq listing, diversified business model, and substantial audience reach provide some underlying value. The recommendation is 'hold' as investors should monitor the company's ability to execute its turnaround strategy and improve profitability before considering a more positive stance.

Keywords

TNL Mediagene, Ordinary Shares, Warrants, Nasdaq, Securities, SEC Filing, Form 20-F, Cayman Islands, Digital Media, Technology, Digital Studio, AI, Financial Reporting, Internal Controls