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Item 1.01
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Entry into a Material Definitive Agreement.
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On July 8, 2021, Takung Art
Co., Ltd, a Delaware corporation (the “Company”), entered into a securities purchase agreement (the “Purchase
Agreement”) and a registration rights agreement (the “Registration Rights Agreement”) with an institutional
investor (the “Investor”). The Company closed the transaction contemplated under the Purchase Agreement on July 12,
2021.
Private Placement Pursuant to the Purchase
Agreement
Pursuant to the terms of the
Purchase Agreement, the Company sold 571,429 shares (the “Shares”) of its common stock, par value $0.001 per share
(the “Common Stock”), to the Investor at a price of $8.75 per share, for gross proceeds of $5,000,000 before deducting
the placement agent fee and offering expenses (the “Private Placement”).
The Purchase Agreement provides
that the Company and its subsidiaries, subject to certain exceptions, shall not (i) issue any shares of Common Stock or Common Stock equivalents
or (ii) file any registration statement other than as contemplated pursuant to the Registration Rights Agreement, from the date of the
Purchase Agreement until the earlier of (1) 5 trading days after the Effective Date (as defined in the Purchase Agreement, which is the
earliest of the date that (a) the initial registration statement under the Registration Rights Agreement has been declared effective by
the Securities and Exchange Commission (“SEC”), (b) all of the Shares have been sold pursuant to Rule 144, (c) following
the one year anniversary of the closing provided that a holder of Shares is not an affiliate of the Company, or (d) all of the Shares
may be sold pursuant to an exemption from registration under Section 4(a)(1) of the Securities Act without volume or manner-of-sale restrictions)
and (2) 30 days after such date that the Shares may be sold without limitation pursuant to Rule 144.
The purchase and sale of the
Shares was completed on July 12, 2021.
Registration Rights Agreement
On July 8, 2021, the Company
and the Investor also entered into the Registration Rights Agreement, pursuant to which the Company is required to file an initial registration
statement (the “Registration Statement”) with the SEC covering the resale of the Shares no later than 17 calendar days
after the date of the closing and to use best efforts to have the Registration Statement declared effective as promptly as practical thereafter,
and in any event no later than 75 calendar days after the closing in the event of a “full review” by the SEC.
Engagement Letter with the Placement Agent
Maxim Group LLC (the “Placement
Agent”) acted as exclusive placement agent in connection with the Private Placement pursuant to an Engagement Letter between
the Company and the Placement Agent dated April 28, 2021 (the “Engagement Letter”). The Engagement Letter provides,
among other things, that the Placement Agent will receive a commission equal to seven and a half percent (7.5%) of the gross proceeds
of the offering.
The Engagement Letter and
the Purchase Agreement contain customary representations and warranties, agreements and obligations, conditions to closing and termination
provisions. The representations, warranties and covenants contained in the Engagement Letter and the Purchase Agreement were made only
for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Engagement Letter and the Purchase
Agreement, and may be subject to limitations agreed upon by the contracting parties.
The
foregoing description of the Purchase Agreement, the Registration Rights Agreement and the Engagement Letter do not purport to be complete
and are qualified in their entirety by reference to the full text of such agreements, copies of which are attached hereto as Exhibits
10.1, 10.2 and 10.3, respectively, and are incorporated herein by reference. Readers should review such agreements for a complete understanding
of the terms and conditions associated with these transactions.