TCTM Announces Entering into An Intangible Asset Purchase Agreement

Rhea-AI Summary

TCTM Kids IT Education (NASDAQ: TCTM) has announced entering into an intangible asset purchase agreement with Jeethen International on April 1, 2025. The company will acquire core algorithms and related software/hardware systems for brain-computer interfaces, valued at $10.85 million.

As consideration, TCTM will issue 135,625,000 Class A ordinary shares to Jeethen, priced at approximately $0.08 per share, based on the March 31, 2025 closing ADS price. Each ADS represents five Class A ordinary shares.

The transaction marks TCTM's strategic expansion into the AI-driven medical software industry. The company expects this acquisition to generate meaningful revenue growth and improved profit margins. The closing is subject to customary conditions and is expected by April 7, 2025.

Positive

• Strategic expansion into AI-driven medical software industry, diversifying revenue streams
• Acquisition of valuable brain-computer interface technology valued at $10.85 million
• Management expects meaningful revenue growth and improved profit margins

Negative

• Significant shareholder dilution through issuance of 135,625,000 new Class A ordinary shares
• High-risk venture into new industry segment outside core education business

BEIJING, April 7, 2025 /PRNewswire/ -- TCTM Kids IT Education Inc. (NASDAQ: TCTM) ("TCTM" or the "Company"), a leading provider of IT-focused supplementary STEM education services in China, today announced that it has entered into an intangible asset purchase agreement with Jeethen International Co., Limited ("Jeethen") on April 1, 2025 (the "Agreement"). Under the Agreement, the Company will acquire from Jeethen core algorithms and related software and hardware systems for brain-computer interfaces, valued at US$10.85 million. As consideration, the Company agrees to issue 135,625,000 Class A ordinary shares of the Company to Jeethen. The number of Class A ordinary shares to be issued was determined by dividing the total consideration of US$10.85 million by the per share purchase price of approximately US$0.08, the closing sale price of the Company's American depositary shares ("ADSs") as reported by Nasdaq on March 31, 2025. Each ADS currently represents five of the Company's Class A ordinary shares.

Mr. Shaoyun Han, chairman of the Board., commented, "This transaction is a critical step of the Company's business strategy of expansion into the AI-driven medical software industry, further diversifying our business. We anticipate meaningful revenue growth, improved profit margins and believe this purchase will serve as a powerful catalyst for long-term value creation." The closings of the transactions are subject to the satisfaction of customary closing conditions and are expected to take place no later than April 7, 2025.

About TCTM Kids IT Education Inc.

TCTM is a leading provider of IT-focused supplementary STEM education services in China. Through its innovative education platform combining live distance instruction, classroom-based tutoring and online learning modules, TCTM offers IT-focused supplementary STEM education programs, including computer coding and robotics programming courses, etc., targeting students between three and eighteen years of age. Aiming to encourage "code to learn," TCTM embraces the latest trends in STEM education and technology to develop children's logical thinking and learning abilities while allowing them to discover their interests and potential.

Safe Harbor Statement

This current report contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. TCTM may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including any business outlook and statements about TCTM's beliefs and expectations, are forward-looking statements. Many factors, risks and uncertainties could cause actual results to differ materially from those in the forward-looking statements.

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SOURCE TCTM Kids IT Education Inc.

FAQ

What is the value of TCTM's brain-computer interface technology acquisition from Jeethen?

TCTM is acquiring brain-computer interface technology valued at $10.85 million from Jeethen International.

How many new shares will TCTM issue for the Jeethen acquisition?

TCTM will issue 135,625,000 Class A ordinary shares at approximately $0.08 per share.

When is the expected closing date for TCTM's acquisition of Jeethen's brain-computer interface technology?

The transaction is expected to close no later than April 7, 2025, subject to customary closing conditions.

How does the Jeethen acquisition align with TCTM's business strategy?

The acquisition represents TCTM's strategic expansion into the AI-driven medical software industry, diversifying beyond its core education business.

What is the share price used for TCTM's acquisition of Jeethen's assets?

The shares are valued at approximately $0.08 each, based on the March 31, 2025 ADS closing price on Nasdaq.