ACG Announces Entry into Subscription Agreement in Connection with Private Placement of Common Shares to CL-TCC

BEIJING, Dec. 18, 2019 (GLOBE NEWSWIRE) -- ATA Creativity Global (“ACG” or the “Company”, Nasdaq: AACG), a company focused on providing students with quality educational experiences and services in China and abroad, today announced that it entered into a Subscription Agreement (the “Subscription Agreement”) with CL-TCC, a company focusing on investments in culture and education industry, in connection with the private placement of the Company’s common shares.

Under the terms of the Subscription Agreement, CL-TCC has agreed to subscribe to a total of 5,662,634 common shares (the “Subscription Shares”) of the Company for an aggregate price of US$10,022,862.18, or $1.77 per share (the “Transaction”). Such per share price represents a 108.7% premium over the per share price implied by the volume-based weighted average trading price of the Company’s American depositary shares in the 20 trading days prior to the date of the Subscription Agreement. Following the closing of the Transaction (the “Closing”) under the Subscription Agreement, CL-TCC will own approximately 9.1% of ACG’s issued and outstanding common shares on a fully diluted basis. The Closing is subject to the satisfaction of customary conditions, including, among other things, the execution of other relevant transaction documents, and is expected to close in 2019.

ACG expects to use proceeds from the Transaction to fund its day-to-day operations and M&A activities.

The Company and CL-TCC also entered into an Investor Rights Agreement (the “IRA”). Under the IRA, without the prior written consent of the Company, CL-TCC shall not, directly or indirectly, (i) sell, transfer or assign the Subscription Shares within two years following the date of the IRA, (ii) transfer the Subscription Shares to competitors of the Company, or (iii) acquire additional securities of the Company that will result in CL-TCC and its controlled affiliates holding more than 30% of the Company’s outstanding share capital on a fully-diluted basis. CL-TCC is also granted preemptive rights to ratably subscribe new securities of the Company in any future private placement of the Company as long as it holds no less than 5% of the share capital of the Company on an as-converted and fully-diluted basis.