TuanChe Limited

Kurta Law is investigating broker recommendations of TuanChe Limited (NASDAQ: TC). These investments were high-risk and may have been unsuitable for many investors. Unsuitable investments violate FINRA Rule 2111, which requires brokers to consider their investor’s risk tolerance. Regulation Best Interest also requires brokers to exercise reasonable care and skill when they make recommendations.

If a broker recommended unsuitable investments to you, you may have a case for a securities lawyer. Call (877) 600-0098 or email info@kurtalawfir.com for a free case evaluation.

About TuanChe Limited

According to the prospectus, TuanChe Limited is an automotive marketplace in mainland China.

The Offering

The prospectus supplement dated November 21, 2022, announced that TuanChe Limited was offering 3,654,546 American Depository Shares representing 58,472,736 Class A ordinary shares. It also announced an offering of pre-funded warrants to purchase up to 1,800,000 American Depository Shares and warrants to purchase up to 5,454,546 American Depository Shares.

• American Depository Shares are shares offered by a foreign company that are sold on an American stock exchange and are denoted in U.S. currency.
• Warrants give investors the right, but not the obligation, to purchase securities at a certain price by a specified deadline.

Risks Related to TuanChe Limited Investments

The prospectus states, “Investing in our securities entails a significant level of risk.” The following are risks that Kurta Law has chosen to highlight – see the prospectus for the complete list.

Net Losses

TuanChe Limited discloses that it had incurred net losses in the past and may incur losses again in the future.

Risks Related to Covid-19 Pandemic

COVID-19 had an adverse effect on TuanChe Limited’s business operations, including cancellations of auto shows and special promotion events. These cancellations impacted business operations in 2020, 2021, and 2022, and these conditions raise substantial dount about TuanChe Limited’s ability to continue as a going concern.

Lack of Long-Term Commitments

TuanChe Limited’s business depends on collaborations with automakers, auto dealers, and automotive service providers. There is no assurance of a long-term business relationship with any of these collaborators.

Business Strategy

TuanChe Limited’s business strategy includes investments in or acquisitions of complementary businesses, joint ventures, services, and technologies.

Risks Related to Doing Business in China

There are a number of risks that stem from running a business in China. There are uncertainties regarding the Chinese legal system and the threat of potential government actions that might influence operations or offshore securities offerings.

Aegis Capital Corp. Underwriting  

Investors should know that Aegis Capital Corp. served as the underwriter for this offering. Underwriters take on risk in exchange for a fee, which could motivate certain investment banks to underwrite investments that pose too much risk for the average retail investor. Additionally, brokers may have conflicts of interest when they recommend shares that are underwritten by an affiliate of their brokerage firm.  

Kurta Law Can Help

Contact Kurta Law today for a free case evaluation – keep in mind that you have a limited time to file a claim. Our attorneys do not collect a fee unless we win your case. If you have any questions, call (877) 600-0098 or email info@kurtalawfirm.com.