Item 1.01 Entry into a Material Definitive Agreement
On January 19, 2021, TD Holdings, Inc. (the "Company") entered into a Common
Stock Purchase Agreement (the "Purchase Agreement") with White Lion Capital,
LLC, a Nevada limited liability company (the "Investor"), which provides that,
upon the terms and subject to the conditions and limitations set forth therein,
the Investor is committed to purchase up to 15,700,000 shares (the "Purchase
Notice Shares") of the Company common stock, par value $0.001 per share (the
"Common Stock"), with an aggregate of forty million dollars ($40,000,000) (the
"Commitment Amount") from time to time during a certain commitment period (the
"Commitment Period") as defined in the Purchase Agreement, at a purchase price
(the "Purchase Price") of 90% of the lowest daily volume-weighted average price
of the Company's Common Stock during a valuation period of three business days
prior to the closing of each Purchase Notice (as defined below) received by the
Investor.
Univest Securities, LLC ("Univest") acts as placement agent for the placement of
Purchase Notice Shares to be offered by the Company during the Commitment Period
to the Investor under a Placement Agency Agreement (the "Placement Agency
Agreement"), dated January 6, 2021. Pursuant to the terms of the Placement
Agency Agreement, the placement agent agreed to use its reasonable best efforts
to arrange the sale of the Company's Purchase Notice Shares. The Company has
agreed to issue 75,000 shares of Common Stock (the "Commitment Shares") to the
Investor in consideration for entering into the Purchase Agreement and 25,000
shares of Common Stock (the "Initial Consideration Shares") to Univest
Securities, LLC as initial consideration for the placement and sale of our
Common Stock.
Under the Purchase Agreement, on any trading day with closing price of Common
Stock is greater than or equal to $1.20, the Company has the right, but not the
obligation, to present the Investor with a purchase notice (each, a "Purchase
Notice"), directing the Investor (as principal) to purchase up to certain amount
shares of Common Stock. The maximum number of Common Stocks to be sold under
each Purchase Notice shall be determined by the lesser of 200% of the average
daily trading volume, as defined in the Purchase Agreement, or $1.0 million
divided by the highest closing price of Common Stock over the most recent five
(5) business days including the date of the Purchase Notice. The maximum amount
of the Investor's committed obligation to purchase under each Purchase Notice
shall not exceed $1.0 million, unless waived by the Investor. Notwithstanding
the foregoing, the Investor may waive the limit on the purchase notice as
described above at any time to purchase additional shares under a Purchase
Notice, subject to the conditions and limitations set forth in the Purchase
Agreement.
The closing of each Purchase Notice shall occur on the second business day after
the Investor delivers deposit to the Escrow Agent (as defined below) any
remaining balance of the applicable investment amount and instructions to
disburse immediately available funds from the escrow account. In the event that
the Purchase Price is lower than $1.20, the Investor is not obligated to
purchase all shares of Common Stock referenced in applicable Purchase Notice and
may, in its sole discretion, deliver an amount up to a certain purchase notice
amount to the Company. In the event that the investment amount of a Purchase
Notice exceeds $1.0 million but is less than $1,300,000, the Investor shall
waive the investment limit for that applicable Purchase Notice. In the event
that the investment of a Purchase Notice exceeds $1,300,000, the Investor's
investment amount shall be $1,300,000 for that applicable Purchase Notice,
unless waived by the Investor in writing. The Investor shall return any balance
of unsold shares referenced in applicable purchase notice to the Company on the
closing date of applicable Purchase Notice. Upon the Company's objection to the
release of funds from the escrow account, the Investor shall inform the Escrow
Agent that the instructions are withdrawn and that funds shall be returned to
Investor until new instructions are delivered. The Company may deliver multiple
Purchase Notices to the Investor from time to time during the Commitment Period,
so long as the most recent purchase has been completed.
The Commitment Period starts on the date of the Purchase Agreement and shall
terminate on the earlier of (i) the date on which the Investor shall have
purchased shares equal to the Commitment Amount, (ii) December 31, 2021, (iii)
the date on which the Investor shall have purchase 15,700,000 shares or (iv)
written notice of termination by the Company to the Investor upon a material
breach of the Purchase Agreement by Investor.
On January 19, 2021, the Company entered into an escrow agreement (the "Escrow
Agreement") with the Investor, Univest, and Wilmington Trust, N.A. (the "Escrow
Agent") to establish an escrow account with the Escrow Agent in connection with
the transaction contemplated by the Purchase Agreement. The deposit funds to be
made by the Investor shall not be released by the Escrow Agent unless the Escrow
Agent receives a joint written instruction issued by the Investor, Univest, and
the Company. All funds deposited to the escrow account by the Investor shall
remain the property of Investor and shall not be subject to any lien or charge
by Escrow Agent or by judgment or creditors' claims against the Company until
released or eligible to be released to Company in accordance to the Escrow
Agreement.
The offering of the shares, including Purchase Notice Shares, Commitment Shares,
and Initial Consideration Shares, is being made pursuant to the Company's
effective shelf registration statement on Form S-3 (File No. 333-239757), which
was originally filed with the Securities and Exchange Commission (the
"Commission") on July 8, 2020, and was declared effective by the Commission on
August 4, 2020.
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The foregoing summary description of the Purchase Agreement, Placement Agency
Agreement, and Escrow Agreement does not purport to be complete and is qualified
in its entirety by reference to the full text of the form of the Purchase
Agreement, Placement Agency Agreement, and Escrow Agreement, which are filed as
Exhibit 10.1, 10.2, and 10.3 to this Current Report on Form 8-K, and is hereby
incorporated herein by reference.
Item 9.01 Financial Statement and Exhibits
(d) Exhibits
5.1 Legal Opinion of Hunter Taubman Fischer & Li LLC.
10.1 Common Stock Purchase Agreement between the Company and White Lion
Capital, LLC dated as of January 19, 2021.
10.2 Placement Agency Agreement between the Company and Univest Securities, LLC
dated as of January 6, 2021.
10.3 Escrow Agreement by and among the Company, Univest Securities, LLC, White
Lion Capital, LLC, and Wilmington Trust, National Association dated as of
January 19, 2021.
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