Fangdd Announces Pricing of US$7.0 Million Registered Direct Offering

Rhea-AI Summary

Fangdd Network Group (Nasdaq: DUO) has announced pricing of a US$7.0 million registered direct offering of Class A ordinary shares at US$0.7 per share (or US$0.6994375 per pre-funded warrant). The offering, expected to close around December 10, 2024, involves a securities purchase agreement with certain investors. MM Global Securities serves as the exclusive placement agent. The company plans to use the proceeds for general corporate purposes. The offering is made pursuant to an effective shelf registration statement previously filed with the SEC.

Positive

• Secured US$7.0 million in additional funding through registered direct offering
• Successfully priced offering at US$0.7 per share

Negative

• Potential dilution of existing shareholders' equity
• Offering price represents a discount to market value

Insights

Financial Analyst

This $7.0 million registered direct offering at $0.7 per share represents a significant capital raise for FangDD, though the dilutive impact is concerning given the company's small $13.4 million market cap. The offering structure, including pre-funded warrants priced at $0.6994375, suggests a complex financing arrangement that could lead to additional dilution. The stated use of proceeds for "general corporate purposes" lacks specificity and raises questions about the company's immediate cash needs. Given FangDD's position in China's challenging property technology sector, this capital raise appears to be a defensive move to strengthen the balance sheet, though the terms aren't particularly favorable for existing shareholders.

Legal Expert

The offering's structure through a shelf registration statement (Form F-3) demonstrates compliance with SEC regulations and provides necessary investor protections. The inclusion of detailed disclosures about the prospectus supplement availability and SEC filing requirements reflects proper regulatory adherence. However, the rapid execution timeline, with closing expected the next day, warrants attention. The customary representations and warranties in the Purchase Agreement offer standard legal protections, though investors should carefully review the full prospectus supplement for complete terms and risk factors.

SHENZHEN, China, Dec. 09, 2024 (GLOBE NEWSWIRE) -- Fangdd Network Group Ltd. (Nasdaq: DUO) (“FangDD” or the “Company”), a customer-oriented property technology company in China, today announced that it has entered into a securities purchase agreement with certain investors (the “Purchase Agreement”) for the issuance and sale by the Company of US$7.0 million of Class A ordinary shares (or pre-funded warrants in lieu thereof), at a price of US$0.7 per share (or US$0.6994375 per pre-funded warrant), in a registered direct offering.

The Purchase Agreement contains representations, warranties and other provisions customary for transactions of this nature. The offering is expected to close on or about December 10, 2024, subject to the satisfaction of customary closing conditions. FangDD intends to use the net proceeds from this offering for general corporate purposes.

The Company has engaged MM Global Securities, Inc. as its exclusive placement agent in connection with this offering.

The securities described above will be offered by the Company pursuant to an effective “shelf” registration statement on Form F-3 (File No. 333-267397) previously filed with the United States Securities and Exchange Commission (the “SEC”) on September 13, 2022 and declared effective by the SEC on September 29, 2022. The securities may be offered only by means of a written prospectus and prospectus supplement that form a part of the registration statement. The prospectus supplement and accompanying base prospectus contain important information relating to the Class A ordinary shares and pre-funded warrants to be sold in the offering. The prospectus supplement will be filed with the SEC and will be available on the SEC’s website at http://www.sec.gov, or may be obtained, when available, by contacting us at Room 1501, Shangmei Technology Building, No. 15 Dachong Road, Nanshan District, Shenzhen, the PRC, or by email at ir@fangdd.com.

This press release shall not constitute an offer to sell nor the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

About FangDD

Fangdd Network Group Ltd. (Nasdaq: DUO) is a customer-oriented property technology company in China, focusing on providing real estate transaction digitalization services. Through innovative use of mobile internet, cloud, big data, artificial intelligence, among others, FangDD has fundamentally revolutionized the way real estate transaction participants conduct their business through a suite of modular products and solutions powered by SaaS tools, products and technology. For more information, please visit http://ir.fangdd.com.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “aim,” “anticipate,” “believe,” “estimate,” “expect,” “hope,” “going forward,” “intend,” “ought to,” “plan,” “project,” “potential,” “seek,” “may,” “might,” “can,” “could,” “will,” “would,” “shall,” “should,” “is likely to” and the negative form of these words and other similar expressions. Among other things, statements that are not historical facts, including statements about the Company’s beliefs and expectations are or contain forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement. All information provided in this press release is as of the date of this press release and is based on assumptions that the Company believes to be reasonable as of this date, and the Company does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

Investor Relations Contact

Ms. Linda Li
Director, Capital Markets Department
Phone: +86-0755-2699-8968
E-mail: ir@fangdd.com

FAQ

What is the size and price of Fangdd's (DUO) December 2024 registered direct offering?

Fangdd's registered direct offering is US$7.0 million, priced at US$0.7 per Class A ordinary share or US$0.6994375 per pre-funded warrant.

When is Fangdd's (DUO) December 2024 registered direct offering expected to close?

The offering is expected to close on or about December 10, 2024, subject to customary closing conditions.

How will Fangdd (DUO) use the proceeds from its December 2024 offering?

Fangdd intends to use the net proceeds from the offering for general corporate purposes.

Who is the placement agent for Fangdd's (DUO) December 2024 registered direct offering?

MM Global Securities, Inc. is serving as the exclusive placement agent for the offering.