Item 1.01. Entry into a Material Definitive Agreement.
On April 29, 2020, IT
Tech Packaging, Inc. (the “Company”) and certain institutional investors entered into a securities purchase
agreement (the “Purchase Agreement”), pursuant to which the Company agreed to sell to such investors an aggregate
of 4,400,000 shares of common stock, par value $0.001 (the “Common Stock”) in a registered direct offering
and warrants (the “Warrants”) to purchase up to 4,400,000 shares of the Common Stock in a concurrent private
placement, for gross proceeds of approximately $2.55 million (the “Financing”). The purchase price for each
share of Common Stock and the corresponding warrant is $0.58.
The Warrants will be exercisable
commencing on November 4, 2020, six months after the date of issuance, at an exercise price of $0.7425 and will expire on November
4, 2025, five years and six months after the date of issuance. In the event of a stock split, stock dividend, combination, subsequent
right offering or reclassification of the outstanding shares of Common Stock, the exercise price and the number of shares issuable
upon exercise of the warrants shall be proportionately adjusted.
The Company agreed not
to enter into any subsequent issuance of Common Stock from April 29, 2020 until thirty (30) days after the closing of the Financing.
The Company agreed to file, as soon as practicable (and in any event within 45 calendar days of the closing date), a registration
statement on Form S-3 (or other appropriate form if the Company is not then S-3 eligible) providing for the resale by the investors
of the warrant shares issued and issuable upon exercise of the Warrants. The Company agreed to use commercially reasonable efforts
to cause such registration to become effective within 181 days following the closing date and to keep such registration statement
effective at all times until no such investor owns any Warrants or warrant shares underlying the Warrants.
Concurrently with the
execution of the Purchase Agreement, certain officers and directors and 5% shareholders of the Company entered into lock-up agreements
(the “Lock-Up Agreements”) pursuant to which they have agreed, among other things, not to sell or dispose of
any shares of Common Stock which are or will be beneficially owned by them for ninety days following the closing of the Financing.
The Company currently
intends to use the net proceeds from the Financing for general corporate and working capital purposes.
The Company entered into
a letter agreement dated April 21, 2020 (the “Letter Agreement’) with Maxim Group LLC, as exclusive placement
agent (the “Placement Agent”), pursuant to which the Placement Agent agreed to act as the sole lead/exclusive
placement agent in connection with the Financing. The Company agreed to pay the Placement Agent an aggregate fee equal
to 7.0% of the gross proceeds raised in the Financing. The Company also agreed to reimburse the Placement Agent for certain expenses,
including for fees and expenses related to legal expenses limited to $50,000.
A copy of the Letter Agreement,
form of the Purchase Agreement, form of the Lock-up Agreement, and form of warrants are attached hereto as Exhibits 10.1, 10.2,
10.3, and 4.1, respectively, and are incorporated herein by reference. The foregoing summaries of the terms of the Letter Agreement,
the Purchase Agreement, the Lock-up Agreement and the warrants are subject to, and qualified in their entirety by, such documents.
On April 30 2020, the
Company issued a press release announcing the Financing. A copy of the press release is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.