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Item 1.01
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Entry into a Material Definitive Agreement.
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On January 7, 2021,
Pingtan Marine Enterprise Ltd. (the “Company”) entered into a Securities Purchase Agreement (the “Purchase Agreement”)
with an accredited investor named therein (the “Purchaser”), pursuant to which the Company agreed to issue and sell,
in a registered direct offering (the “Offering”), 4,000,000 of the Company’s Series A Convertible Preferred Shares,
par value $0.001 per share (“Series A Preferred Shares”), at a purchase price of $1.00 per share and a stated value
of $1.10 that are convertible into the Company’s ordinary shares, for gross proceeds of approximately $4,000,000. The closing
of the Offering is expected to take place on or about January 8, 2021, subject to the satisfaction of customary closing conditions.
The Purchase Agreement
contains customary representations, warranties and agreements by the Company, customary conditions to closing, indemnification
obligations of the Company, including for liabilities under the Securities Act of 1933, as amended, termination provisions and
other obligations and rights of the parties. The Offering is being made pursuant to an effective shelf registration statement on
Form S-3 (File No. 333-248620) previously filed with and declared effective by the U.S. Securities and Exchange Commission, and
a prospectus supplement thereunder. A copy of the opinion of Maples and Calder (Hong Kong)
LLP relating to the legality of the issuance and sale of the securities in the Offering is attached to this Current Report
on Form 8-K as Exhibit 5.1. This Current Report on Form 8-K shall not constitute an offer
to sell or the solicitation of an offer to buy securities, nor shall there be any sale of securities in any state in which such
offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.
The estimated net proceeds
from the Offering, after deducting estimated offering expenses payable by the Company and placement agent fees, are expected to
be approximately $3.43 million. The Company intends to use the net proceeds from the Offering for working capital, general corporate
purposes (including sales and marketing and the satisfaction of outstanding amounts payable to its vendors in connection with trade
payables) and transaction expenses. The Company may also use a portion of the net proceeds from the Offering to finance acquisitions
of, or investments in, competitive and complementary businesses, products or services as a part of its growth strategy.
In connection with
the Offering, the Company’s board approved the Certificate of Designation for the Series A Preferred Shares (the “Certificate
of Designation”), establishing and designating the rights, powers and preferences of the Series A Preferred Shares. The Company
designated 4,000,000 Series A Preferred Shares. Pursuant to the Certificate of Designation, the holders of the Series A Preferred
Shares are entitled, among other things, to the right to receive dividends on the stated value of such Series A Preferred Share
at a dividend rate equal to 8.0% per annum for a guaranteed period of one year. The Series A Preferred Shares have no voting rights,
except with respect to certain amendments to the rights, preferences or powers of the Series A Preferred Shares, the authorization,
creation or increase of certain parity shares or shares ranking senior to the Series A Preferred Shares, or as otherwise required
by law or the Certificate of Designation. Each Series A Preferred Share is convertible into the Company’s ordinary shares
at a conversion price equal to the lesser of (i) $2.00 and (ii) 90% of the lowest volume weighted average price of the ordinary
shares on a trading day during the ten trading days prior to the conversion date, but not lower than $0.44, subject to certain
adjustments. In the event of any liquidation of the Company, the Series A Preferred Shares rank senior to the Company’s ordinary
shares in the distribution of assets, to the extent legally available for distribution.
On January 7,
2021, the Company engaged Spartan Capital Securities, LLC (the “Placement Agent”) to act as its exclusive
placement agent for the Offering pursuant to a Placement Agent Agreement, dated January 7, 2021 (the “Placement Agent
Agreement”). In consideration for its placement agent services, the Company agreed to pay the Placement Agent, in
addition to out-of-pocket expenses of up to $35,000 and legal expenses of up to $50,000, (i) a cash fee of 6.5% of the gross
proceeds received by the Company from the sale of the Series A Preferred Shares in the Offering and (ii) a number of warrants
to purchase the Company’s ordinary shares equal to 7.0% of the gross proceeds received by the Company from the sale of
the Series A Preferred Shares in the Offering divided by the closing price of the Company’s ordinary shares on January
7, 2021, at an exercise price per share of $1.87, subject to adjustment, which equates to 149,733 ordinary shares, pursuant
to a Placement Agent Ordinary Share Purchase Warrant, to be issued at closing by the Company to the Placement Agent (the
“Placement Agent Warrant”). The Placement Agent Warrant will be exercisable, in whole or in part, commencing on a
date that is six months and one day after the closing of the Offering and expires on the five-year anniversary of the closing
of the Offering.
The foregoing is only
a summary of the material terms of the documents related to the Offering. The foregoing descriptions of the Purchase Agreement,
the Certificate of Designation, the Placement Agent Agreement and the Placement Agent Warrant are not complete and are qualified
in their entireties by reference to the full text of the Purchase Agreement, the Certificate of Designation, the Placement Agent
Agreement and the Placement Agent Warrant, copies of which are filed with this Current Report on Form 8-K as Exhibits 10.1, 3.1,
10.2 and 4.1, respectively, and incorporated herein by reference.