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Item 1.01
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Entry into a Material Definitive Agreement.
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On August 9, 2017,
we entered into a share exchange agreement (the “
Exchange Agreement
”) with Sorghum Investment Holdings Limited
(“
Sorghum
”) and the holders of all of the outstanding issued shares of Sorghum (the “
Sellers
”),
pursuant to which, among other things and subject to the terms and conditions contained therein, we will issue and deliver 152,586,795
shares of our common stock (the “
Exchange Shares
”) to the Sellers, in exchange for all of the outstanding shares
of Sorghum. We refer the transaction contemplated in the Exchange Agreement as the “Acquisition”. The Exchange Shares
will be allocated among the Sellers pro-rata based on each Seller’s ownership of Sorghum prior to the closing. Immediately
after the Acquisition, CCCR will own 100% of Sorghum. The Sellers will own approximately 88 % of CCCR and existing CCCR shareholders
will own approximately 12% of the Company, assuming no additional new issuances of securities by the Company prior to the closing
of the Acquisition.
Sorghum
Investment Holdings Limited
Sorghum is a holding company that was incorporated
as a British Virgin Islands company limited by shares under the BVI Business Companies Act, 2004, on March 14, 2017. Sorghum does
not have any substantive operations and conducts its business through its wholly-owned subsidiaries and certain contractual arrangements
with Shanghai Wheat Asset Management Co., Ltd and its wholly-owned, directly or indirectly, subsidiaries in China and the U.S.
We refer to Sorghum and its consolidated subsidiaries as “Sorghum Group”.
Sorghum Group is a digital online intermediary connecting
investors and borrowers for the provision of efficient and optimized peer-to-peer facilitation services to individuals and small
business owners in China.
Representations and Warranties; Indemnification
of Sorghum
The parties to the
Exchange Agreement have made representations and warranties to each other as of specific dates for the purpose of allocating risk
and not for the purpose of establishing facts. In addition, the representations and warranties are qualified by information in
confidential disclosure schedules exchanged by the parties together with the Exchange Agreement. While the Company does not believe
that these schedules contain material information that the securities laws require it to publicly disclose, the disclosure schedules
do contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Exchange
Agreement.
Accordingly, the representations
and warranties should not be relied on as characterizations of the actual state of facts. Other than with respect to actual fraud
or intentional or willful misrepresentation or omission, Sorghum’ rights to indemnification will be its sole remedy with
respect to any and all claims for money damages arising out of or relating to the Exchange Agreement .
Conditions to Closing
The obligation of
the parties to complete the Acquisition is subject to the fulfillment or written waiver of certain closing conditions, including:
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the approval of the Exchange Agreement and the transactions contemplated thereby (including the Acquisition) by a majority of votes cast by our shareholders that are present in person or by proxy at our special meeting;
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the receipt of any other required governmental and regulatory approvals and consents ;
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the receipt of any other required third person approvals in order to consummate the Acquisition;
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there is no applicable law or order in effect which makes illegal or prevents or prohibits the transactions contemplated by the Exchange Agreement , and there is no pending third party non-Affiliate legal proceeding to enjoin or otherwise restrict the closing;
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the appointment of person designated by Sorghum prior to the closing to our board of directors immediately after the closing; and
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Other customary closing conditions
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In addition, the Company
and Sorghum have each agreed to take such actions as are necessary, proper or advisable to consummate the Acquisition and have
made certain other customary covenants in the Exchange Agreement.
Termination
The Exchange Agreement may be terminated
prior to the closing by:
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the mutual written consent of Sorghum and us;
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written notice by either Sorghum or us if the closing has not occurred by the six month anniversary of the date of the Exchange Agreement, which date is also referred to herein as the outside date, so long as no breach of the Exchange Agreement by such terminating party or its affiliates (or, with respect to Sorghum, the Sellers) caused the closing not to have occurred by such date;
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written notice by either us or Sorghum if any governmental authority of competent jurisdiction has issued a final and non-appealable order or taken any other action permanently restraining, enjoining or otherwise prohibiting the transactions contemplated by the Exchange Agreement , so long as no breach of the Exchange Agreement by such terminating party or its affiliates (or, with respect to Sorghum, the Sellers) was a substantial cause of, or substantially resulted in, such action by such governmental authority;
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written notice by Sorghum for a breach of our representations, warranties, covenants or agreements in the Exchange Agreement which would result in the related closing condition not being met and such breach is incapable of cure or is not cured within the earlier of 20 days after notice of such breach or the outside date;
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written notice by us for a breach of Sorghum’s or the Sellers’s representations, warranties, covenants or agreements in the Exchange Agreement which would result in the related closing condition not being met and such breach is incapable of cure or is not cured within the earlier of 20 days after notice of such breach or the outside date;
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written notice by us if there shall have been a material adverse effect on Sorghum or its subsidiaries which is uncured and continuing; or
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written notice by us if the requisite shareholder vote in favor of the Exchange Agreement and the Acquisition is not obtained at our special meeting.
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If the Exchange Agreement is terminated, all further obligations
of the parties under the Exchange Agreement will terminate and will be of no further force and effect and no party will have any
further liability thereunder to any other party, except that certain obligations related to public announcements, confidential
information, fees and expenses, and termination fees and general provisions will continue in effect, and no party shall be relieved
of liability for any fraud claims or willful breach of the Exchange Agreement prior to such termination.
Fees and
Expenses
In the event that we terminate the Exchange
Agreement for breach by Sorghum or a material adverse effect on Sorghum or its subsidiaries which is uncured and continuing or
for the failure to obtain the requisite shareholder vote in favor of the Exchange Agreement and the Acquisition at our special
meeting, Sorghum will be required to pay us as liquidated damages a termination fee equal to the transaction expenses incurred
by or on behalf of us or any of our affiliates in connection with the Exchange Agreement or the transactions contemplated hereby.
In the event Sorghum terminates the Exchange Agreement for breach by us or a material adverse effect on us or our subsidiaries
which is uncured and continuing, we will be required to pay Sorghum as liquidated damages a termination fee equal to the transaction
expenses incurred by or on behalf of Sorghum or any of its affiliates in connection with the Exchange Agreement or the transactions
contemplated hereby.
Other than the termination fee described
above, each party will bear its own expenses in connection with the Exchange Agreement and the transactions contemplated thereby.
In connection with the consummation of
the Acquisition, the Company also agreed to (i) enter into a Lock-Up Agreement with the Sellers with respect to the Exchange Shares
received by the Sellers in the Acquisition; and (ii) a Non-Competition and Non-Solicitation Agreement in favor of us and Sorghum
and our respective successors, affiliates and subsidiaries relating to the post-Acquisition company’s business.
Board of Directors
and Management Following the Acquisition
Immediately following the closing of the
Acquisition, the current chief executive officer and chairman of CCCR shall resign and the chief executive officer of Sorghum shall
become the chief executive officer and chairman of CCCR.
Efforts
to Obtain Shareholder Approval and Consummate the Acquisition; Regulatory Matters
Unless the Exchange Agreements terminated
in accordance with its terms, we have agreed to call a special meeting of our shareholders, for the purpose of such shareholders
considering and voting on the approval and adoption of the Exchange Agreement and the Acquisition and the other transactions contemplated
thereby, including, if required, the amendment and restatement of our charter, the appointment of directors and committee members
in accordance with the requirements of the Exchange Agreement and any other matters required to be voted upon by such shareholders
in connection with the transactions contemplated in the Exchange Agreement. Our board of directors has approved the Exchange Agreement
and the Acquisition and directed that the Exchange Agreement and the Acquisition be submitted to our shareholders for their consideration.
Moreover, each party to the Exchange Agreement
has agreed to execute and deliver such documents and take such further actions as may be reasonably necessary or desirable to carry
out the provisions of the Exchange Agreement and the transactions contemplated thereby, including the Acquisition. Upon the terms
and subject to the conditions of the Exchange Agreement, each of the parties to the Exchange Agreement will use all commercially
reasonable efforts under the circumstances to take, or cause to be taken, all actions and to do, or cause to be done, all other
things necessary, proper or advisable to consummate and make effective the transactions contemplated by the Exchange Agreement(including
the Acquisition), as soon as reasonably practicable, including preparing and filing as soon as practicable all documentation to
effect all necessary notices, reports and other filings.
The parties are also required to, as soon
as reasonably practicable, cooperate and use their commercially reasonable efforts to prepare and file with governmental authorities
requests for approval of, and have such governmental authorities approve, the transactions contemplated by the Exchange Agreement.
Each party also agreed to use its commercially reasonable efforts to obtain any required consents of third parties for the transactions
contemplated by the Exchange Agreement. However, in no event will a party be required to agree to any term, condition or modification
with respect to obtaining any governmental authority or third party consent in connection with the transactions contemplated by
the Exchange Agreement that would, or would be reasonably likely to, result in a material adverse effect to such party or its affiliates
or require such party to cease, sell or otherwise dispose of, or hold separate, any material assets or businesses.
We cannot assure you that any of the approvals
of governmental authorities or other third parties described above will be obtained, and, if obtained, we cannot assure you as
to the date of such approvals or the absence of any litigation challenging any such approvals. We are not aware of, and Sorghum
and the Sellers have not identified to us, any material governmental authority or third party approvals or actions that are required
for completion of the Acquisition, except for the approval of NASDAQ for listing of additional shares. It is presently contemplated
that if any such additional approvals or actions are required, those approvals or actions will be sought, but there can be no
assurance that any additional approvals or actions will be obtained.
The foregoing summaries
of the Exchange Agreement, and the transactions contemplated thereunder and any other agreements to be entered into by the parties
are qualified in their entirety by reference to the full text of the Exchange Agreement which is attached hereto as Exhibit 2.1,
and is incorporated herein by reference. You are urged to read all of the exhibits attached hereto in their entirety.