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UNITED
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SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER
THE
SECURITIES EXCHANGE ACT OF 1934
For
the month of December 2019
Commission
File Number 001-34837
Luokung
Technology Corp.
(Translation
of registrant’s name into English)
B9-8,
Block B, SOHO Phase II, No. 9, Guanghua Road, Chaoyang District,
Beijing
People’s
Republic of China 100020
(Address
of principal executive office)
Indicate
by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form
20-F þ Form
40-F ☐
Indicate
by check mark if the registrant is submitting the Form 6’-K in
paper as permitted by Regulation S-T Rule 101(b)(1): ___
Note:
Regulation S-T Rule 101(6)(1) only permits the submission in paper
of a Form 6-K if submitted solely to provide an attached annual
report to security holders.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper
as permitted by Regulation S-T Rule l01(b)(7): ____
Note:
Regulation S-T Rule 101(6)(7) only permits the submission in paper
of a Form 6-K if submitted to furnish a report or other document
that the registrant foreign private issuer must furnish and make
public’ under the laws of the jurisdiction in which the registrant
is incorporated, domiciled or legally organized (the registrant’s
“home country”), or under the rules of the home country exchange on
which the registrant’s securities are traded, as long as the report
or other document is not a press release, is not required to be and
has not been distributed to the registrant’s security holders, and,
if discussing a material event, has already been the subject of a
Form 6-K submission or other Commission filing on EDGAR.
Luokung
Technology Corp.
Entry
into Share Subscription Agreement and Joint Venture Cooperation
Agreement with Geely Technology Group Co., Ltd.
On
November 13, 2019, Luokung Technology Corp., a corporation
organized under the laws of the British Virgin Islands (the
“Company”), entered into a Share Subscription Agreement (the
“Agreement”), pursuant to which Geely Technology Group Co., Ltd.
(“Geely”) has subscribed to purchase from the Company 21,794,872
preferred shares (the “Preferred Shares”) at a purchase price of
$1.95 per share (the “Purchase Price”) for an aggregate purchase
price of $42,500,000 (the “Purchase”).
Pursuant to the Agreement, Geely has the right to require the
Company to repurchase all or part of the Preferred Shares in cash
at a repurchase price defined below upon the following events: (1)
six (6) months after the closing date; (2) the proposed acquisition
of eMapgo Technologies (Beijing) Co., Ltd. (the “Proposed
Acquisition”) is terminated; (3) the Company breaches the
Agreement; or (4) within six (6) months from the closing date
provided that the Company has sufficient funds after completing the
Proposed Acquisition. The repurchase price per each Preferred Share
shall be the higher of (i) $1.95 per share; or (ii) the US dollars
equivalent to RMB13.7648 per share (the “Repurchase Price”), where
the exchange rate shall be the central parity rate between RMB and
USD published by the People’s Bank of China the day before Geely
issues the repurchase notice, plus an eight percent (8%) annual
simple interest rate basis calculated from the date such Purchase
Price was fully paid until the date of full payment of the
Repurchase Price, which shall be made in a lump sum on the date of
the payment of the Repurchase Price, plus all declared but unpaid
dividends with respect to the Preferred Shares. The Company shall
pay the corresponding Repurchase Price within sixty (60) days
following twelve (12) months after the Purchased Shares are issued.
Geely has the right to convert the Preferred Shares into the
Company’s ordinary shares at the ratio of 1:1 at any time. The
repurchase right discussed above will not apply to the ordinary
shares so converted.
Pursuant to the Agreement, in addition to the Preferred Shares the
Company issued to Geely a warrant to purchase 10,897,436 ordinary
shares (the “Warrant”). Each warrant entitles Geely to purchase one
ordinary share at an exercise price (the “Warrant Exercise Price”),
equal to one hundred twenty percent (120%) of the Purchase Price of
the Preferred Shares (i.e. USD 2.34). After Geely elects to convert
the Preferred Shares into ordinary shares, the Company shall have
the right to require Geely to exercise the Warrant in the event
that the VWAP for any trailing 20-day period is in excess of one
hundred twenty-five percent (125%) of the Warrant Exercise Price
(i.e. USD 2.925). Upon receipt of the notice of exercise of the
Warrant, Geely shall decide whether to exercise the Warrant in
accordance with applicable Chinese governmental regulatory
requirements (including but not limited to ODI procedures) and
shall promptly notify the Company in writing of the result of such
decision. If Geely decides not to exercise the Warrant, the Warrant
shall become void.
Geely and the Company also entered into a framework Joint Venture
Cooperation Agreement (the “JV Agreement”), which provides that the
newly established joint venture company will engage in a
ridesharing map service business.
The Agreement, the Warrant and the JV Agreement contain customary
representations and warranties, indemnification provisions, and
conditions precedent and post-closing conditions and covenants of
each party. The description contained herein of the terms of the
Agreement and the JV Agreement does not purport to be complete and
is qualified in its entirety by reference to the Agreement, a copy
of which will be attached to the Company’s Form 20-F upon the
filing of such Form 20-F.
Entry into Securities Purchase Agreement and Warrant with
Acuitas Capital, LLC
On November 13, 2019, the Company entered into a Securities
Purchase Agreement (the “Securities Purchase Agreement”) with
ACUITAS CAPITAL, LLC (the “Purchaser”) and a Warrant (the
“Warrant”) to purchase the Company’s ordinary shares pursuant to
which the Purchaser subscribed to purchase up to $100,000,000 of
units (the “Units”) with up to a $10,000,000 subscription at each
closing, with each Unit consisting of one ordinary share and one
warrant, where each whole warrant entitles the holder to purchase
one ordinary share. The Units may be sold at an aggregate price of
$10,000,000 at a purchase price per Unit equal to (i) for the
initial Closing, ninety two and five-tenths percent (92.5%) of the
volume weighted average price (the “VWAP”) for the five-trading day
period starting on the date on which a Form 6-K is filed announcing
this transaction; and (ii) for all other closings the lesser of (A)
ninety two and five-tenths percent (92.5%) of the VWAP for the
trailing five-trading day period prior to the applicable closing
date; and (B) ninety two and five-tenths percent (92.5%) of the
closing bid price of the Company’s ordinary shares as of one (1)
trading day prior to the applicable closing date. The Securities
Purchase Agreement contemplates closings to be held monthly
provided, however, that, subject to all other terms and conditions
of the Securities Purchase Agreement being met, in the event that
(i) the VWAP for any trailing three-day period is in excess of 110
percent of the purchase price for the closing date immediately
preceding such time period, or (ii) the cumulative trading volume
is fifty-five million dollars ($55,000,000), then the Company shall
have the right, but not the obligation, to accelerate the next
closing date upon two (2) business days’ written notice to the
Purchasers shall be obligated to comply with such acceleration
request.
Each Warrant allows for the purchase of one ordinary share for
every Unit issued to Purchaser pursuant to the Securities Purchase
Agreement at an exercise price equal to one hundred twenty percent
(120%) of the closing bid price of the ordinary shares as of one
(1) trading day prior to the applicable closing date (the “Exercise
Price”).
The Warrants may be exercised for cash if the Exercise Price is
lower than the closing bid price of the ordinary shares at the time
of the exercise. If the Exercise Price is greater than the closing
bid price of the ordinary shares at the time of the exercise, then
the Purchaser may elect to redeem the Warrants pursuant to the
following formula:
Net Number = (A x B)/C
For purposes of the foregoing formula:
A= the total number of ordinary shares with respect to which the
applicable Warrant is then being exercised.
B= Black Scholes Value (as defined in the applicable Warrant).
C= the closing bid price of the ordinary shares as of two (2)
trading days prior to the time of such exercise (as such closing
bid price is defined in the applicable Warrant).
;provided, however, that, with respect to each such election by
Purchaser, Purchaser cannot elect to redeem Warrants on a
“cashless” basis if (i) Purchaser holds 25% or more of the Purchase
Shares received under this Agreement, or (ii) Purchaser has
terminated the Securities Purchase Agreement pursuant to Section
9(a)(ii).
In the event that (i) the VWAP for any trailing 20-day period is in
excess of 125 percent of the Exercise Price and (ii) the average
daily trading volume is greater than three million dollars
($3,000,000), then the Company shall have the right, but not the
obligation, to require the Purchaser to exercise its Warrants
pursuant to the terms of the applicable Warrant.
The Purchasers have weighted average anti-dilution rights.
The Agreement contains customary representations and warranties,
indemnification provisions, and pre- and post-closing conditions
and covenants of each party including without limitation:
|
(i) |
a covenant which restricts the
Company from filing a registration statement within 90 days of any
closing held pursuant to the Securities Purchase Agreement; |
|
(ii) |
a covenant which prevents the
Company from issuing any equity securities within 90 days of any
closing held pursuant to the Securities Purchase Agreement; |
|
(iii) |
payment of any Purchase Price will
be transmitted by Purchaser to an escrow agent not to the
Company; |
|
(iv) |
the release of the Purchase Price
for any Closing by the Escrow Agent to the Company is subject to
the satisfaction of certain conditions; including without
limitation (a) the Company’s ordinary shares cumulative trading
volume exceed $55,000,000 since the execution of the Securities
Purchase Agreement or last closing held pursuant to the Securities
Purchase Agreement; (b) the Company shall have received $42,500,000
investment from an existing shareholder and publicly announce such
investment; (c) the Company shall have acquired 51% of the equity
interests of EMG; and the closing bid price of the ordinary shares
as of 1 trading day prior to the date of release of the Purchase
Price shall not be below $1.00, |
The Company has the right to terminate the Securities Purchase
Agreement upon 30 days written notice.
The description contained herein of the terms of the Securities
Purchase Agreement and the Warrant, respectively, does not purport
to be complete and is qualified in its entirety by reference to the
Securities Purchase Agreement and the Warrant, respectively,
attached hereto as Exhibit 99.1 and Exhibit 99.2, respectively, and
incorporated by reference herein.
In connection with the Securities Purchase Agreement, the Company
is hereby furnishing under the cover of Form 6-K:
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
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Luokung Technology Corp. |
|
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Date December 3, 2019 |
By |
/s/ Xuesong Song |
|
|
Xuesong Song |
|
|
Chief Executive Officer |
|
|
(Principal Executive Officer) and |
|
|
Duly Authorized Officer |
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