As filed with the Securities and Exchange
Commission on September 20, 2021
Registration No. 333-258141
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2 to
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
TAKUNG ART CO.,
LTD
(Exact Name of Registrant as Specified in Its Charter)
Delaware
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26-4731758
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(State or Other Jurisdiction of
Incorporation or Organization)
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(I.R.S. Employer
Identification Number)
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Room 709 Tower 2, Admiralty
Centre, 18 Harcourt Road, Admiralty, Hong Kong
+852 3158 0977
(Address, Including
Zip Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive
Offices)
Tracy Chui-Kam Ng
Room 709 Tower 2, Admiralty Centre, 18 Harcourt
Road,
Admiralty, Hong Kong
+852 3158 0977
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent for Service)
Copies to:
Elizabeth F. Chen, Esq.
Pryor Cashman LLP
7 Times Square
New York, New York 10036
(212) 326 0199
Approximate date of commencement
of proposed sale to the public: From time to time after the effective date of this registration statement.
If the only securities being
registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. ¨
If any of the securities
being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. x
If this form is filed to
register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
¨
If this form is a post-effective
amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ¨
If this form is a registration
statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the
Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ¨
If this form is a post-effective
amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to rule 413(b) under the Securities Act, check the following box. ¨
Indicate by check mark whether
the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging
growth company” in Rule 12b-2 of the Exchange Act:
Large accelerated filer ¨
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Accelerated filer ¨
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Non-accelerated filer x
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Smaller reporting company x
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Emerging growth company ¨
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If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. ¨
CALCULATION OF REGISTRATION FEE
Title of Securities
To Be Registered
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Amount
To Be
Registered (1)
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Proposed
Maximum
Offering Price
Per Share (2)
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Proposed
Maximum
Aggregate
Offering Price (2)
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Amount Of
Registration
Fee (2)
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Common Stock, par value $0.001 per share
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571,429
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$
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6.78
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$
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3,874,288.62
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$
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422.68
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(3)
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(1)
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In accordance with Rule 416 under the Securities Act
of 1933, as amended (the “Securities Act”), this registration statement also shall register and be deemed to cover any
additional shares of common stock of the Registrant which may be offered or become issuable to prevent dilution resulting from stock
splits, stock dividends or similar transactions.
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(2)
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Estimated solely for the purpose of calculation of the registration
fee pursuant to Rule 457(c) under the Securities Act based on a per share price of $6.78, the average of the high and low
reported sales prices of the Registrant's common stock on the NYSE American on July 20, 2021.
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(3)
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Registration fee previously paid.
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The Registrant hereby amends this Registration
Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the
Securities Act or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
The information in this prospectus
is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION, DATED SEPTEMBER
[●], 2021
PROSPECTUS
Takung Art Co., Ltd
571,429 Shares
of
Common Stock
This prospectus relates to
the resale, from time to time, of up to 571,429 shares of our common stock, par value $0.001 per share, which may be offered and sold
from time to time by a single shareholder set forth in the “Selling Shareholder” section of this prospectus. The shares of
common stock that are being registered for resale pursuant to the registration statement of which this prospectus forms a part were issued
by our company to the selling shareholder in a private placement of $5,000,000 at a purchase price of $8.75 per share, which closed on
July 12, 2021.
The selling shareholder will
receive all of the net proceeds from the sale of common stock offered hereby. The selling shareholder may resell the shares of common
stock offered for resale through this prospectus to or through underwriters, broker-dealers, or agents, who may receive compensation
in the form of discounts, concessions or commissions. We will not receive any proceeds from the sale of these shares by the selling shareholder,
but we will bear all costs, fees and expenses in connection with the registration of the shares of common stock offered by the selling
shareholder. The selling shareholder will bear all commissions and discounts, if any, attributable to the sale of the shares of common
stock offered for resale through this prospectus.
The selling shareholder will
determine where they may sell the shares in all cases, including, in the over-the-counter market or otherwise, at market prices prevailing
at the time of sale, at prices related to the prevailing market prices, or at negotiated prices. For information regarding the selling
shareholder and the times and manner in which they may offer or sell shares of our common stock, see “Selling Shareholder”
or “Plan of Distribution.”
Our common stock is listed
on the NYSE American under the symbol TKAT. On September 1, 2021, the last reported sale price for our common stock on the NYSE American
was $13.00 per share.
Our principal executive offices
are located at Room 709 Tower 2, Admiralty Centre, 18 Harcourt Road, Admiralty, Hong Kong and our telephone number at that address is
+852 3158-0977.
Neither the Securities
and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy
or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
Recently, the Chinese government
announced that it would step up supervision of Chinese firms listed offshore. Under the new measures, China will improve regulation of
cross-border data flows and security, crack down on illegal activity in the securities market and punish fraudulent securities issuance,
market manipulation and insider trading, China will also check sources of funding for securities investment and control leverage ratios.
The Cyberspace Administration of China (“CAC”) has also opened a cybersecurity probe into several U.S.-listed tech giants
focusing on anti-monopoly, financial technology regulation and more recently, with the passage of the Data Security Law, how companies
collect, store, process and transfer data.
The Company does not use
variable interest entities in its corporate structure. The Company operates an electronic online platform for artists, art dealers and
art investors to offer and trade in ownership units over valuable artwork. This business does not appear to be within the targeted areas
of concern by the Chinese government. However, because of the Company’s subsidiaries in Hong Kong and mainland China and its operations
there, there is a risk that the Chinese government may in the future seek to affect operations of any company with any level of operations
in Hong Kong or China, including its ability to offer securities to investors, list its securities on a U.S. or other foreign exchange,
conduct its business or accept foreign investment. Substantial uncertainties and restrictions with respect to the political and economic
policies of the PRC government and PRC laws and regulations could have a significant impact upon the business that we may be able to
conduct in the PRC and accordingly on the results of our operations and financial condition. If any or all of the foregoing were to occur,
it could, in turn, result in a material change in the Company’s operations and/or the value of its common stock and/or significantly
limit or completely hinder its ability to offer or continue to offer securities to investors and cause the value of such securities to
significantly decline or be worthless.
Investing in securities involves certain risks. See “Risk
Factors” beginning on page 8 of this prospectus and in the applicable prospectus supplement, as updated in our future filings made
with the Securities and Exchange Commission (the “SEC”) that are incorporated by reference into this prospectus. You should
carefully read and consider these risk factors before you invest in our securities.
The date of this prospectus is [ ]
TABLE OF CONTENTS
The distribution of this
prospectus may be restricted by law in certain jurisdictions. You should inform yourself about and observe any of these restrictions.
If you are in a jurisdiction where offers to sell, or solicitations of offers to purchase, the securities offered by this document are
unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this prospectus
does not extend to you.
We have not authorized anyone
to give any information or make any representation about us that is different from, or in addition to, that contained in this prospectus,
including in any of the materials that we have incorporated by reference into this prospectus, any accompanying prospectus supplement,
and any free writing prospectus prepared or authorized by us. Therefore, if anyone does give you information of this sort, you should
not rely on it as authorized by us. You should rely only on the information contained or incorporated by reference in this prospectus
and any accompanying prospectus supplement.
You should not assume
that the information contained in this prospectus and any accompanying supplement to this prospectus is accurate on any date subsequent
to the date set forth on the front of the document or that any information we have incorporated by reference is correct on any date subsequent
to the date of the document incorporated by reference, even though this prospectus and any accompanying supplement to this prospectus
is delivered or securities are sold on a later date. Neither the delivery of this prospectus, nor any sale made hereunder, shall under
any circumstances create any implication that there has been no change in our affairs since the date hereof or that the information incorporated
by reference herein is correct as of any time subsequent to the date of such information.
PROSPECTUS SUMMARY
You should carefully read
this prospectus and the information described under the heading “Where You Can Find More Information.” Neither we nor the
selling shareholder have authorized anyone to give any information or make any representation about our company that is different from,
or in addition to, that contained in this prospectus, including in any of the materials that have been incorporated by reference into
this prospectus or any accompanying prospectus supplement. Therefore, if anyone does give you information of this sort, you should not
rely on it as authorized by us. You should rely only on the information contained or incorporated by reference in this prospectus and
any accompanying prospectus supplement.
You should not assume
that the information contained in this prospectus and any accompanying supplement to this prospectus is accurate on any date subsequent
to the date set forth on the front of the document or that any information that has been incorporated by reference is correct on any
date subsequent to the date of the document incorporated by reference, even though this prospectus and any accompanying supplement to
this prospectus is delivered or securities are sold on a later date. Neither the delivery of this prospectus, nor any sale made hereunder,
shall under any circumstances create any implication that there has been no change in our affairs since the date hereof or that the information
incorporated by reference herein is correct as of any time subsequent to the date of such information.
The distribution of this
prospectus may be restricted by law in certain jurisdictions. You should inform yourself about and observe any of these restrictions.
If you are in a jurisdiction where offers to sell, or solicitations of offers to purchase, the securities offered by this document are
unlawful, or if you are a person to whom it is unlawful to direct these types of activities, then the offer presented in this prospectus
does not extend to you.
Unless the context otherwise
requires, the terms “the Company,” “we,” “us,” and “our” in this prospectus each refer
to Takung Art Co., Ltd, our subsidiaries and our consolidated entities. “China” and “the PRC” refer to the People’s
Republic of China.
Unless otherwise noted, all
currency figures in this filing are in U.S. dollars. References to “US$,” “$”, “dollars” and “U.S.
dollars” are to the legal currency of the United States. References to “RMB” are to the Chinese yuan, the lawful currency
of China, which is also known as the “Renminbi”. References to “HK$” are to the Hong Kong dollars, the legal
currency of Hong Kong.
Our reporting currency is
U.S. Dollars. This prospectus also contains translations of certain foreign currency amounts into U.S. dollars for the convenience of
the reader. Unless otherwise stated, all translations of HK$ into U.S. dollars were made at HK$7.7534 and HK$7.7894 to US$1.00 and translations
of Renminbi into U.S. dollars were made at RMB6.525 and RMB6.9618 to US$1.00, the exchange rates set forth in the H.10 statistical release
of the Federal Reserve Board on December 31, 2020 and December 31, 2019, respectively. We make no representation that the HK$,
Renminbi or U.S. dollar amounts referred to in this prospectus could have been or could be converted into U.S. dollars, HK$ or Renminbi,
as the case may be, at any particular rate or at all. As of March 31, 2021, the translations of HK$ and Renminbi into U.S. dollars
were made at HK$7.7744 and RMB6.5696 to US$1.00, respectively.
References to “PRC”
or “China” are to the People’s Republic of China, excluding, for the purposes of this prospectus only, Taiwan and the
special administrative regions of Hong Kong and Macau. References to “Hong Kong” are to “Hong Kong, Special Administrative
Region of the People’s Republic of China”. Unless otherwise specified or required by context, references to “we,”
“the Company”, “Takung”, “our” and “us” refer collectively to (i) Takung Art Co.,
Ltd, (ii) the subsidiaries of Takung Art Co., Ltd, Hong Kong Takung Art Company Limited (“Hong Kong Takung”), Hong Kong
MQ Group Limited (“Hong Kong MQ”), a Hong Kong limited liability company and its wholly-owned PRC subsidiary, Takung Cultural
Development (Tianjin) Co., Ltd (“Tianjin Takung”), a wholly-owned subsidiary of Hong Kong Takung incorporated in the Tianjin
Pilot Free-Trade Zone (TJFTZ) in Tianjin, China respectively.
References to Tianjin Takung’s
“registered capital” is to the equity of Tianjin Takung, which under PRC law is measured not in terms of shares owned but
in terms of the amount of capital that has been contributed to a company by a particular shareholder or all shareholders. The portion
of a limited liability company’s total capital contributed by a particular shareholder represents that shareholder’s ownership
of the company, and the total amount of capital contributed by all shareholders is the company’s total equity. Capital contributions
are made to a company by deposits into a dedicated account in the company’s name, which the company may access in order to meet
its financial needs. When a company’s accountant certifies to PRC authorities that a capital contribution has been made and the
company has received the necessary government permission to increase its contributed capital, the capital contribution is registered
with regulatory authorities and becomes a part of the company’s “registered capital.”
Investing in our securities
involves a high degree of risk. We are a holding company incorporated in Delaware. As a holding company with no material operations
of our own, we conduct a substantial majority of our operations through our operating entities established in Hong Kong and the People’s
Republic of China, or the PRC. Our securities offered in this prospectus are securities of our Delaware holding company. We do not believe
that our major business is within the targeted areas of Chinese government's recent statements and actions. However, because of the Company’s
subsidiaries in Hong Kong and the PRC and its operations there, there is a risk that the Chinese government may in the future seek to
affect operations of any company with any level of operations in Hong Kong and the PRC, including its ability to offer securities to
investors, list its securities on a U.S. or other foreign exchange, conduct its business or accept foreign investment. Substantial uncertainties
and restrictions with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a
significant impact upon the business that we may be able to conduct in the PRC and accordingly on the results of our operations and financial
condition. If any or all of the foregoing were to occur, it could, in turn, result in a material change in the Company’s operations
and/or the value of its common stock and/or significantly limit or completely hinder its ability to offer or continue to offer securities
to investors and cause the value of such securities to significantly decline or be worthless. Prior to making a decision about investing
in our securities, you should carefully consider the specific risk factors discussed below, and the risk factors contained in our annual
report on Form 10-K for the fiscal year ended December 31, 2020 under the heading “Item 1A. Risk Factors,” and as described
or may be described in any subsequent quarterly report on Form 10-Q under the heading “Item 1A. Risk Factors,” as well as
in any applicable prospectus supplement and contained or to be contained in our filings with the SEC and incorporated by reference in
this prospectus, together with all of the other information contained in this prospectus, or any applicable prospectus supplement. For
a description of these reports and documents, and information about where you can find them, see “Where You Can Find More Information”
and “Incorporation of Documents by Reference.” If any of the risks or uncertainties described in our SEC filings or any prospectus
supplement or any additional risks and uncertainties actually occur, our business, financial condition and results of operations could
be materially and adversely affected, and the trading price of our securities could decline and you might lose all or part of the value
of your investment.
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Substantial
uncertainties and restrictions with respect to the political and economic policies of the
PRC government and PRC laws and regulations could have a significant impact upon the business
that we may be able to conduct in the PRC and accordingly on the results of our operations
and financial condition.
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Adverse
regulatory developments in China may subject us to additional regulatory review, and additional
disclosure requirements and regulatory scrutiny to be adopted by the SEC in response to risks
related to recent regulatory developments in China may impose additional compliance requirements
for companies like us with China-based operations, all of which could increase our compliance
costs, subject us to additional disclosure requirements.
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Compliance
with China’s new Data Security Law, Measures on Cybersecurity Review (revised draft
for public consultation), Personal Information Protection Law (second draft for consultation),
regulations and guidelines relating to the multi-level protection scheme and any other future
laws and regulations may entail significant expenses and could materially affect our business.
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It
may be difficult for overseas regulators to conduct investigation or collect evidence within
China.
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Our
auditor is headquartered in San Mateo, California, and is subject to inspection by The United
States Public Company Accounting Oversight Board (“PCAOB”) on a regular basis.
To the extent that our independent registered public accounting firm’s audit documentation
related to their audit reports for our company becomes located in China, the PCAOB may not
be able inspect such audit documentation and, as such, you may be deprived of the benefits
of such inspection and our common stock could be delisted from the stock exchange pursuant
to the Holding Foreign Companies Accountable Act.
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FORWARD-LOOKING STATEMENTS
Some of the statements contained
or incorporated by reference in this prospectus may be “forward-looking statements” within the meaning of Section 27A
of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act and may involve
material risks, assumptions and uncertainties. Forward-looking statements typically are identified by the use of terms such as “may,”
“will,” “should,” “believe,” “might,” “expect,” “anticipate,”
“intend,” “plan,” “estimate” and similar words, although some forward-looking statements are expressed
differently.
Although we believe that
the expectations reflected in such forward-looking statements are reasonable, these statements are not guarantees of future performance
and involve certain risks and uncertainties that are difficult to predict and which may cause actual outcomes and results to differ materially
from what is expressed or forecasted in such forward-looking statements. These forward-looking statements speak only as of the date on
which they are made and except as required by law, we undertake no obligation to publicly release the results of any revision or update
of these forward-looking statements, whether as a result of new information, future events or otherwise. If we do update or correct one
or more forward-looking statements, you should not conclude that we will make additional updates or corrections with respect thereto
or with respect to other forward-looking statements. A detailed discussion of risks and uncertainties that could cause actual results
and events to differ materially from our forward-looking statements is included in our periodic reports filed with the SEC and in the
“Risk Factors” section of this prospectus.
THE COMPANY
Overview
Takung Art Co., Ltd is a
holding company that, through Hong Kong Takung Art Company Limited (“Hong Kong Takung”) and Takung Cultural Development (Tianjin)
Co. Ltd., Hong Kong Takung’s wholly-owned subsidiary in China (“Tianjin Takung”), operates an electronic online platform
located at http://en.takungae.com/ for artists, art dealers and art investors to offer and trade in ownership units over valuable artwork.
On June 19, 2019, Takung Art Co., Ltd purchased from Ms. Ma Hiu Ngai, the Company’s shareholder, one (1) ordinary
share of Hong Kong MQ Group Limited (“Hong Kong MQ”), constituting 100% of its issued and outstanding shares, for a cash
consideration of HK$1.00 and therefore made Hong Kong MQ its wholly-owned subsidiary.
Through Hong Kong Takung
and Tianjin Takung, we offer on-line listing and trading services that allow artists/art dealers/owners to access a much bigger art trading
market where they can engage with a wide range of investors that they might not encounter without our platform. Our platform also makes
investment in high-end and expensive artwork more accessible to ordinary people without substantial financial resources. We have deregistered
Takung Art Holdings and Shanghai Takung in an effort to streamline our business operations.
We generate revenue from
our services in connection with the offering and trading of artwork on our system, primarily consisting of listing fees, trading commissions,
and management fees.
We are headquartered in Hong
Kong, Special Administrative Region, People’s Republic of China and conduct business in Hong Kong and Tianjin. Our principal executive
office is located at Room 709, Tower 2, Admiralty Centre, 18 Harcourt Road, Admiralty, Hong Kong.
Corporate History and Structure
We were incorporated in Delaware
under the name Cardigant Medical Inc. on April 17, 2009. Our initial business plan was focused on the development of novel biologic
and peptide-based compounds and enhanced methods for local delivery of treatments for vascular diseases including peripheral artery disease
and ischemic stroke.
Pursuant to the Stock Purchase
Agreement dated as of July 31, 2014, Yong Li, an individual purchased a total of 22,185,230 (pre- Reverse Stock Split) restricted
shares of common stock of the Company from a group of three former shareholders of the Company. In consideration for the shares, Mr. Li
paid the sellers $399,344 in cash which came from his own capital. The sellers were Jerett A. Creed, the Company’s former Chief
Executive Officer, Chief Financial Officer, director and formerly a controlling shareholder of the Company, the Creed Family Limited
Partnership and Ralph Sinibaldi. The shares represented approximately 95% of the Company’s then issued and outstanding common stock.
The sale was consummated on August 28, 2014. As a result of the transaction, there was a change in control of the Company.
On August 27, 2014,
we entered into a Contribution Agreement with Cardigant Neurovascular. Pursuant to the Contribution Agreement, we assigned all our assets,
properties, rights, title and interest used or held for use by our business, (except for certain excluded assets set forth therein) which
was the treatment of atherosclerosis and plaque stabilization in both the coronary and peripheral vasculature using systemic and local
delivery of large molecule therapeutics and peptide mimetics based on high density lipoprotein targets (“Cardigant Business”).
In consideration for such contribution of capital, Cardigant Neurovascular agreed to assume all our liabilities raising from the Cardigant
Business prior to the date of the Contribution Agreement and thereafter with regard to certain contributed contacts. We granted Cardigant
Neurovascular an exclusive option for a period of 6 months to purchase the excluded assets for $1. Cardigant Neurovascular exercised
this option October 20, 2014 and the excluded assets were assigned to Cardigant Neurovascular on October 20, 2014.
Also on October 20,
2014, we acquired the business of Hong Kong Takung through the acquisition of all the share capital of Hong Kong Takung under a Share
Exchange Agreement dated September 23, 2014 in exchange for 209,976,000 (pre-Reverse Stock Split) newly-issued restricted shares
of our common stock to the shareholders of Hong Kong Takung.
Hong Kong Takung is a limited
liability company incorporated on September 17, 2012 under the laws of Hong Kong, Special Administrative Region, China. Although
Hong Kong Takung was incorporated in late 2012, it did not commence business operations until late 2013.
As a result of the transfer
of the excluded assets pursuant to the Contribution Agreement and the acquisition of all the issued and outstanding shares of Hong Kong
Takung, we ceased the Cardigant Business and have now assumed Hong Kong Takung’s business operations.
On November 5, 2014,
we filed a Certificate of Amendment to our Certificate of Incorporation with the Secretary of the State of Delaware to change our name
from “Cardigant Medical Inc.” to “Takung Art Co., Ltd”.
On July 28, 2015, Hong
Kong Takung incorporated a wholly owned subsidiary, Takung (Shanghai) Co., Ltd. (“Shanghai Takung”), in Shanghai Free-Trade
Zone (SFTZ) in Shanghai, China, with a registered capital of $1 million. Shanghai Takung assists in Hong Kong Takung’s operations
by receiving deposits from and making payments to online artwork Traders in mainland China on behalf of Hong Kong Takung. On January 27,
2016, Hong Kong Takung incorporated a wholly owned subsidiary, Takung Cultural Development (Tianjin) Co., Ltd (“Tianjin Takung”)
in the Tianjin Free Trade Zone (TJFTZ) in Tianjin, China with a registered capital of $1 million. Tianjin Takung provides technology
development services to Hong Kong Takung and Shanghai Takung, and also carries out marketing and promotion activities in mainland China.
Management has recently determined to merge the operations of Shanghai Takung with Tianjin Takung’s and deregistered Shanghai Takung
in order to save costs on May 8, 2020.
On August 10, 2015,
we filed a Certificate of Amendment to our Certificate of Incorporation with the Secretary of State of the State of Delaware to effect
a reverse stock split of our issued and outstanding shares of common stock at a ratio of 1-for-25 (the “Reverse Stock Split”).
Upon filing of the Certificate of Amendment, every twenty-five shares of the Company’s issued and outstanding common stock were
automatically converted into one issued and outstanding share of common stock, without any change in par value per share. No fractional
shares will be issued as a result of the Reverse Stock Split. Shareholders who would otherwise be entitled to receive a fractional share
will be entitled to rounding up their fractional shares to the nearest whole number.
Hong Kong Takung Art Holdings
Company Limited (“Takung Art Holdings”) was incorporated in Hong Kong on July 20, 2018 and operates as a holding company
to operate an e-commerce platform for offering, selling and trading whole pieces of artwork instead of units of artwork. Takung Art Holdings
was deregistered on April 29, 2020 due to deregistration of Art Era Internet Technology (Tianjin) Co., Ltd as discussed below.
Art Era Internet Technology
(Tianjin) Co., Ltd (“Art Era”), formed in Tianjin on September 7, 2018, is a directly wholly owned subsidiary of Takung
Art Holdings, and formed as a limited liability company with a registered capital of $2 million located in the Pilot Free Trade Zone
in Tianjin. Art Era mainly focuses on developing our e-commerce platform for art. Art Era was deregistered on June 18, 2019 due
to Company’s plan to put off the e-commerce platform development.
Hong Kong MQ Group Limited
(“Hong Kong MQ”) was formed in Hong Kong on November 27, 2018 and currently has no operations. On June 19, 2019,
as a result of a private transaction, one (1) share of common stock of Hong Kong MQ was transferred from Ms. Hiu Ngai Ma to
the Company. The net asset of Hong Kong MQ was $nil as of the acquisition date. The consideration paid for the ownership transfer, which
represent 100% of the issued and outstanding share capital of Hong Kong MQ, was $0.13 (HK$1). Hong Kong MQ became a direct wholly-owned
subsidiary of the Company.
MQ (Tianjin) Enterprise Management
Consulting Co., Ltd (“Tianjin MQ”) was incorporated in Tianjin, PRC on July 9, 2019 and is a directly wholly owned subsidiary
of Hong Kong MQ. It was established as a limited liability company with a registered capital of $100,000 located in the Pilot Free Trade
Zone in Tianjin. Tianjin MQ will focus on exploring business opportunities. Tianjin MQ was deregistered on August 10, 2020 due to
the Company streamlining its operation.
Business History of Hong Kong Takung
Hong Kong Takung is a limited
liability company incorporated on September 17, 2012 under the laws of Hong Kong, Special Administrative Region, China. Its authorized
capital is 20,000,000 shares. Prior to the Reverse Merger, all its 20,000,000 issued and outstanding shares, par value $0.13 (HK$1) per
share, were owned by Kirin Linkage Limited (4,000,000 shares) and Loyal Heaven Limited (16,000,000 shares), both Cayman Islands companies.
Although Hong Kong Takung
was incorporated in late 2012, it did not commence business operations until late 2013.
Corporate Structure
The diagram below illustrates
our current corporate structure:
Cash Flows
The Company’s entities outside PRC, including
the U.S. holding entity, Hong Kong Takung and Hong Kong MQ, and the entity within PRC, Tianjin Takung, operate independently in terms
of cash flow. Due to the fact that the Chinese government has strict foreign exchange policies that limit the amount of capital that
can be directly transmitted offshore from the PRC entities, the cash transfer between the U.S. holding entity (including its wholly-owned
subsidiaries, the Hong Kong entities) and the PRC entity, Tianjin Takung is limited. Tianjin Takung has only received a one-time initial
capital injection from Hong Kong Takung. Other than that, there is no other operational cash flow transferred between the holding entity
and its subsidiaries across the PRC borders. The U.S. holding entity and the subsidiary entities never have any distribution of earnings
such as dividend or settlement amounts owed. Each entity is taxable by the jurisdiction of its incorporation.
Permissions under Hong Kong Law and the
PRC Law
We are currently not required to obtain permission
from any of the PRC authorities to operate and issue our common stock to foreign investors. In addition, we and our subsidiaries are
not required to obtain permission or approval from the Hong Kong and PRC authorities, including China Securities Regulatory Commission
(“CSRC”), Cyberspace Administration of China (“CAC”) and/or any other entity that is required to approve our
operations other than the standard annual check with local administration bureau. This is subject to the uncertainty of different interpretation
and implementation of the rules and regulations in the PRC that could be potentially adverse to us, which may take place quickly with
little advance notice.
RISK FACTORS
An investment in our securities
involves a high degree of risk. Before making any investment decision, you should carefully consider the risk factors set forth below,
the information under the caption “Risk Factors” in any applicable prospectus supplement, any related free writing prospectus
that we may authorize to be provided to you and the information under the caption “Risk Factors” in our annual report on
Form 10-K that is incorporated by reference in this prospectus, as updated by our subsequent filings under the Securities Exchange
Act of 1934, as amended, or the Exchange Act.
These risks could materially
affect our business, results of operation or financial condition and affect the value of our securities. Additional risks and uncertainties
that are not yet identified may also materially harm our business, operating results and financial condition and could result in a complete
loss of your investment. You could lose all or part of your investment. For more information, see “Where You Can Find More Information.”
Substantial uncertainties and restrictions
with respect to the political and economic policies of the PRC government and PRC laws and regulations could have a significant impact
upon the business that we may be able to conduct in the PRC and accordingly on the results of our operations and financial condition.
Takung Art Co., Ltd is a
holding company that, through Hong Kong Takung Art Company Limited and Takung Cultural Development (Tianjin) Co. Ltd., Hong Kong Takung’s
wholly-owned subsidiary in China, operates an electronic online platform for artists, art dealers and art investors to offer and trade
in ownership units over valuable artwork. Because of the majority of our operations are in the PRC and Hong Kong, economic, political
and legal developments in the PRC will significantly affect our business, financial condition, results of operations and prospects.
Our business operations
may be adversely affected by the current and future political environment in the PRC. The Chinese government exerts substantial influence
and control over the manner in which we must conduct our business activities. Our ability to operate in China may be adversely affected
by changes in Chinese laws and regulations. Under the current government leadership, the government of the PRC has been pursuing reform
policies which have adversely affected China-based operating companies whose securities are listed in the United States, with significant
policies changes being made from time to time without notice. There are substantial uncertainties regarding the interpretation and application
of PRC laws and regulations. Only after 1979 did the Chinese government begin to promulgate a comprehensive system of laws that regulate
economic affairs in general, deal with economic matters encourage foreign investment in China. Although the influence of the law has
been increasing, China has not developed a fully integrated legal system and recently enacted laws and regulations may not sufficiently
cover all aspects of economic activities in China. Also, because these laws and regulations are relatively new, and because of the limited
volume of published cases and their lack of force as precedents, interpretation and enforcement of these laws and regulations involve
significant uncertainties. New laws and regulations that affect existing and proposed future businesses may also be applied retroactively.
In addition, there have been constant changes and amendments of laws and regulations over the past 30 years in order to keep up with
the rapidly changing society and economy in China. Because government agencies and courts provide interpretations of laws and regulations
and decide contractual disputes and issues, their inexperience in adjudicating new business and new polices or regulations in certain
less developed areas causes uncertainty and may affect our business. Consequently, we cannot predict the future direction of Chinese
legislative activities with respect to either businesses with foreign investment or the effectiveness on enforcement of laws and regulations
in China. The uncertainties, including new laws and regulations and changes of existing laws, as well as judicial interpretation by inexperienced
officials in the agencies and courts in certain areas, may cause possible problems to foreign investors. In addition, Uncertainties regarding
the enforcement of laws and the fact that rules and regulations in China can change quickly with little advance notice, along with the
risk that the Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted
overseas and/or foreign investment in China-based issuers could result in a material change in our operations, financial performance
and/or the value of our common stock or impair our ability to raise money. Although the PRC government has been pursuing economic reform
policies for more than two decades, the PRC government continues to exercise significant control over economic growth in the PRC through
the allocation of resources, controlling payments of foreign currency, setting monetary policy and imposing policies that impact particular
industries in different ways. We cannot assure you that the PRC government will continue to pursue policies favoring a market oriented
economy or that existing policies will not be significantly altered, especially in the event of a change in leadership, social or political
disruption, or other circumstances affecting political, economic and social life in the PRC. Any adverse changes in Chinese laws and
regulations and the Chinese government’s significant oversight and discretion over the conduct of our business could significantly
limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of our securities to
significantly decline or be worthless.
Adverse regulatory developments in China may
subject us to additional regulatory review, and additional disclosure requirements and regulatory scrutiny to be adopted by the SEC in
response to risks related to recent regulatory developments in China may impose additional compliance requirements for companies like
us with China-based operations, all of which could increase our compliance costs, subject us to additional disclosure requirements.
The recent regulatory developments
in China, in particular with respect to restrictions on China-based companies raising capital offshore, may lead to additional regulatory
review in China over our financing and capital raising activities in the United States. In addition, we may be subject to industry-wide
regulations that may be adopted by the relevant PRC authorities, which may have the effect of restricting the scope of our operations
in China, or causing the suspension or termination of our business operations in China entirely, all of which will materially and adversely
affect our business, financial condition and results of operations. We may have to adjust, modify, or completely change our business
operations in response to adverse regulatory changes or policy developments, and we cannot assure you that any remedial action adopted
by us can be completed in a timely, cost-efficient, or liability-free manner or at all.
On July 30, 2021, in response
to the recent regulatory developments in China and actions adopted by the PRC government, the Chairman of the SEC issued a statement
asking the SEC staff to seek additional disclosures from offshore issuers associated with China-based operating companies before their
registration statements will be declared effective. On August 1, 2021, the China Securities Regulatory Commission stated in a statement
that it had taken note of the new disclosure requirements announced by the SEC regarding the listings of Chinese companies and the recent
regulatory development in China, and that both countries should strengthen communications on regulating China-related issuers. We cannot
guarantee that we will not be subject to tightened regulatory review and we could be exposed to government interference in China.
Compliance with China’s new Data Security
Law, Measures on Cybersecurity Review (revised draft for public consultation), Personal Information Protection Law (second draft for
consultation), regulations and guidelines relating to the multi-level protection scheme and any other future laws and regulations may
entail significant expenses and could materially affect our business.
Recently, the Cyberspace
Administration of China has taken action against several Chinese internet companies in connection with their initial public offerings
on U.S. securities exchanges, for alleged national security risks and improper collection and use of the personal information of Chinese
data subjects. According to the official announcement, the action was initiated based on the National Security Law, the Cyber Security
Law and the Measures on Cybersecurity Review, which are aimed at “preventing national data security risks, maintaining national
security and safeguarding public interests.” On July 10, 2021, the Cyberspace Administration of China published a revised draft
of the Measures on Cybersecurity Review, expanding the cybersecurity review to data processing operators in possession of personal information
of over 1 million users if the operators intend to list their securities in a foreign country.
We do not believe we are
among the data processing processor as mentioned above. It is unclear at the present time how widespread the cybersecurity review requirement
and the enforcement action will be and what effect they will have on the e-commerce platform for artwork generally and Tianjin Takung
in particular. China’s regulators may impose penalties for non-compliance ranging from fines or suspension of operations, and this
could lead to us delisting from the U.S. stock market.
Also, on August 20, 2021,
the National People’s Congress passed the Personal Information Protection Law, which will be implemented on November 1, 2021. The
law creates a comprehensive set of data privacy and protection requirements that apply to the processing of personal information and
expands data protection compliance obligations to cover the processing of personal information of persons by organizations and individuals
in China, and the processing of personal information of persons in China outside of China if such processing is for purposes of providing
products and services to, or analyzing and evaluating the behavior of, persons in China. The law also proposes that critical information
infrastructure operators and personal information processing entities who process personal information meeting a volume threshold to-be-set
by Chinese cyberspace regulators are also required to store in China personal information generated or collected in China, and to pass
a security assessment administered by Chinese cyberspace regulators for any export of such personal information. Lastly, the draft contains
proposals for significant fines for serious violations of up to RMB 50 million or 5% of annual revenues from the prior year.
Interpretation, application
and enforcement of these laws, rules and regulations evolve from time to time and their scope may continually change, through new legislation,
amendments to existing legislation and changes in enforcement. Compliance with the Cyber Security Law and the Data Security Law could
significantly increase the cost to us of providing our service offerings, require significant changes to our operations or even prevent
us from providing certain service offerings in jurisdictions in which we currently operate or in which we may operate in the future.
Despite our efforts to comply with applicable laws, regulations and other obligations relating to privacy, data protection and information
security, it is possible that our practices, offerings or platform could fail to meet all of the requirements imposed on us by the Cyber
Security Law, the Data Security Law and/or related implementing regulations. Any failure on our part to comply with such law or regulations
or any other obligations relating to privacy, data protection or information security, or any compromise of security that results in
unauthorized access, use or release of personally identifiable information or other data, or the perception or allegation that any of
the foregoing types of failure or compromise has occurred, could damage our reputation, discourage new and existing counterparties from
contracting with us or result in investigations, fines, suspension or other penalties by Chinese government authorities and private claims
or litigation, any of which could materially adversely affect our business, financial condition and results of operations. Even if our
practices are not subject to legal challenge, the perception of privacy concerns, whether or not valid, may harm our reputation and brand
and adversely affect our business, financial condition and results of operations. Moreover, the legal uncertainty created by the Data
Security Law and the recent Chinese government actions could materially adversely affect our ability, on favorable terms, to raise capital,
including engaging in follow-on offerings of our securities in the U.S. market.
We believe that we are
currently compliant with the regulations or policies that have been issued by the CAC to date. As of the date of this prospectus, we
have not been involved in any investigations on cybersecurity or data security initiated by related governmental regulatory authorities,
and we have not received any inquiry, notice, warning, or sanction in such respect. However, as uncertainties remain regarding the interpretation
and implementation of these laws and regulations, we cannot assure you that we will comply with such regulations in all respects and
we may be ordered to rectify or terminate any actions that are deemed illegal by regulatory authorities. We may also become subject to
fines and/or other sanctions which may have material adverse effect on our business, operations and financial condition.
It may be difficult for U.S. regulators, such
as the Department of Justice, the SEC, and other authorities, to conduct investigation or collect evidence within China.
Shareholder claims or regulatory
investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in China. For
example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigations
initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory
authorities of another country or region to implement cross-border supervision and administration, such cooperation with regulatory authorities
in the Unities States—including the SEC and the Department of Justice—may not be efficient in the absence of mutual and practical
cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, which became effective in March 2020, no overseas
securities regulator is allowed to directly conduct investigation or evidence collection activities within the PRC territory. While detailed
interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator
to directly conduct investigation or evidence collection activities within China may further increase the difficulties you face in protecting
your interests.
Our auditor is headquartered in San Mateo, California, and is subject to inspection by the PCAOB on a regular basis. To the extent
that our independent registered public accounting firm’s audit documentation related to their audit reports for our company become
located in China, the PCAOB may not be able inspect such audit documentation and, as such, you may be deprived of the benefits of such
inspection and our common stock could be delisted from the stock exchange pursuant to the Holding Foreign Companies Accountable Act.
Our independent registered
public accounting firm issued an audit opinion on the financial statements included in this prospectus filed with the SEC and will issue
audit reports related to our company in the future. As auditors of companies that are traded publicly in the United States and a firm
registered with the PCAOB, our auditor is required by the laws of the United States to undergo regular inspections by the PCAOB. However,
to the extent that our auditor’s work papers become located in China, such work papers will not be subject to inspection by the
PCAOB because the PCAOB is currently unable to conduct inspections without the approval of the Chinese authorities. Inspections of certain
other firms that the PCAOB has conducted outside of China have identified deficiencies in those firms’ audit procedures and quality
control procedures, which may be addressed as part of the inspection process to improve future audit quality. We are required by the
Holding Foreign Companies Accountable Act to have an auditor that is subject to the inspection by the PCAOB. While our present auditor
is located in the United States and the PCAOB is able to conduct inspections on such auditor, to the extent this status changes in the
future and our auditor’s audit documentation related to their audit reports for our company becomes outside of the inspection by
the PCAOB, our common stock could be delisted from the stock exchange pursuant to the Holding Foreign Companies Accountable Act.
USE OF PROCEEDS
We will not receive any proceeds
from the sale of our common stock offered by this prospectus. The Selling Shareholder will receive all of the proceeds. We will pay all
costs, fees and expenses incurred in connection with the registration of the shares of our common stock covered by this prospectus.
DESCRIPTION OF CAPITAL
STOCK
The following is a summary
of our capital stock and certain provisions of our certificate of incorporation and bylaws. This summary does not purport to be complete
and is qualified in its entirety by the provisions of our certificate of incorporation, as amended, our bylaws and applicable provisions
of the laws of the State of Delaware.
See “Where You Can
Find More Information” elsewhere in this prospectus for information on where you can obtain copies of our articles of incorporation
and our bylaws, which have been filed with and are publicly available from the SEC.
As of August 31, 2021, our authorized capital
stock consists of 1,000,000,000 shares of common stock, $0.001 par value per share, of which 12,398,873 shares are issued and outstanding.
The authorized and unissued shares of our common
stock are available for issuance without further action by our shareholders, unless such action is required by applicable law or the
rules of the NYSE American, or any stock exchange on which our securities may be listed at such time. Unless approval of our shareholders
is so required, our board of directors will not seek shareholder approval for the issuance and sale of our common stock.
DESCRIPTION OF COMMON STOCK
Each outstanding share of common stock is entitled
to one vote, either in person or by proxy, on all matters that may be voted upon by their holders at meetings of the shareholders.
Holders of our common stock:
(i) have equal ratable rights to dividends from
funds legally available therefore, if declared by the Board of Directors;
(ii) are entitled to share ratably in all our
assets available for distribution to holders of common stock upon our liquidation, dissolution or winding up;
(iii) do not have preemptive, subscription or
conversion rights; and
(iv) are entitled to one non-cumulative vote per
share on all matters on which shareholders may vote at all meetings of our shareholders.
The holders of shares of our common stock do not
have cumulative voting rights, which means that the holder or holders of more than fifty percent (50%) of outstanding shares voting for
the election of directors can elect all of our directors if they so choose and, in such event, the holders of the remaining shares will
not be able to elect any of the our directors.
Our common stock is listed on the NYSE American
under the symbol “TKAT.” The transfer agent and registrar for our common stock is VStock Transfer, LLC, 18 Lafayette Place,
Woodmere, New York 11598.
SELLING SHAREHOLDER
We have agreed to register
571,429 shares of our common stock which are beneficially owned by the Selling Shareholder.
On July 8, 2021, we
entered into a Securities Purchase Agreement (the “Purchase Agreement”) with Sabby Volatility Warrant Master Fund, Ltd.
(the “Selling Shareholder”) pursuant to which we sold to the Selling Shareholder, through a private placement, an aggregate
of 571,429 shares (the “Shares”) of the common stock, at a purchase price of $8.75 per share, for aggregate gross proceeds
to us of $5,000,000 (the “Private Placement”). The Shares are restricted shares and cannot be resold without an effective
registration statement or a valid exemption. The Private Placement closed on July 12, 2021 (the “Closing”).
On July 8, 2021, we
also entered into a Registration Rights Agreement with the Selling Shareholder, pursuant to which we are required to file an initial
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 such 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.
The Shares are being registered
to permit public secondary trading of these securities, and the Selling Shareholder may offer these shares for resale from time to time
as described in “Plan of Distribution.”
The following table sets
forth the name of the Selling Shareholder, the number of shares of common stock owned beneficially by the Selling Shareholder as of September
1, 2021, and the number of shares that may be offered for resale by the Selling Shareholder from time to time. These shares may also
be sold by donees, pledgees, and other transferees or successors in the interest of the Selling Shareholder.
The Selling Shareholder may
decide to sell all, some, or none of the shares of the common stock listed below. We currently have no agreements, arrangements or understandings
with the Selling Shareholder regarding the sale of any of the securities covered by this prospectus. We cannot provide you with any estimate
of the number of shares of our common stock that the Selling Shareholder will hold in the future.
For purposes of this table,
beneficial ownership is determined in accordance with Rule 13d-3 promulgated under the Exchange Act, and includes voting power and
investment power with respect to such shares. In calculating the percentage ownership or percent of equity vote for a given individual
or group, the number of shares of common stock outstanding for that individual or group includes unissued shares subject to options,
warrants, rights or conversion privileges exercisable within sixty days held by such individual or group, but are not deemed outstanding
by any other person or group.
The applicable percentage
of ownership is based on an aggregate of 12,398,873 shares of our Common Stock outstanding on September 1, 2021.
Name of Selling Shareholder
|
|
Number of
Shares of
Common Stock
Owned Before
the Offering
|
|
Percent of
Common Stock
Owned Before
the Offering
|
|
Shares
Available
for Sale
Under This
Prospectus
|
|
Number
of Shares
of Common
Stock To
Be Owned
After the
Termination of
the Offering
|
|
Percent
of Common
Stock to
be Owned
After
Completion of
the Offering
|
|
Sabby Volatility Warrant Master Fund, Ltd.
(2)
|
|
|
571,429
|
|
|
4.6
|
%
|
|
571,429
|
|
|
(1)
|
|
(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Because (a) the Selling Shareholder may offer all or some of the
shares of our common stock that it holds in the offering contemplated by this prospectus, (b) the offering of shares of our
common stock is not being underwritten on a firm commitment basis, and (c) the Selling Shareholder could purchase additional
shares of our common stock from time to time, no estimate can be given as to the number of shares or percent of our common stock
that will be held by the Selling Shareholder upon termination of the offering.
|
|
|
|
|
(2)
|
The address of Sabby Volatility Warrant Master Fund, Ltd. is c/o Sabby Management, LLC, 10
Mountainview Road, Suite 205, Upper Saddle River, NJ 07458.
|
PLAN OF DISTRIBUTION
The common stock covered
by this prospectus may be offered and sold from time to time by the Selling Shareholder. The term “Selling Shareholder” includes
pledgees, donees, transferees or other successors in interest selling shares received after the date of this prospectus from the Selling
Shareholder as a pledge, gift, partnership distribution or other non-sale related transfer. The number of shares beneficially owned by
the Selling Shareholder will decrease as and when they effect any such transfers. The plan of distribution for the Selling Shareholder’s
shares sold hereunder will otherwise remain unchanged, except that the transferees, pledgees, donees or other successors will be Selling
Shareholders hereunder. To the extent required, we may amend and supplement this prospectus from time to time to describe a specific
plan of distribution. The Selling Shareholder will act independently of us in making decisions with respect to the timing, manner and
size of each sale. Once sold under this registration statement, of which this prospectus forms a part, the shares of common stock will
be freely tradable in the hands of persons other than our affiliates.
We will not receive any of the proceeds from the
sale by the Selling Shareholder of the shares of common stock. We will bear all fees and expenses incident to our obligation to register
the shares of common stock.
The Selling Shareholder may
make these sales at prices and under terms then prevailing or at prices related to the then current market price. The Selling Shareholder
may also make sales in negotiated transactions. The Selling Shareholder may offer their shares from time to time pursuant to one or more
of the following methods:
|
●
|
ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
●
|
one or more block trades in which the broker-dealer will attempt to
sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction;
|
|
●
|
purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
|
|
●
|
an exchange distribution in accordance with the rules of the applicable
exchange;
|
|
●
|
public or privately negotiated transactions;
|
|
●
|
on the NYSE American (or through the facilities of any national securities
exchange or U.S. inter- dealer quotation system of a registered national securities association, on which the shares are then listed,
admitted to unlisted trading privileges or included for quotation);
|
|
●
|
through underwriters, brokers or dealers (who may act as agents or
principals) or directly to one or more purchasers;
|
|
●
|
a combination of any such methods of sale; and
|
|
●
|
any other method permitted pursuant to applicable law.
|
In connection with distributions of the shares
or otherwise, the Selling Shareholder may:
|
●
|
enter into hedging transactions with broker-dealers or other financial
institutions, which may in turn engage in short sales of the shares in the course of hedging the positions they assume;
|
|
●
|
sell the shares short after the effective date of the registration
statement of which this prospectus forms a part and redeliver the shares to close out such short positions;
|
|
●
|
enter into option or other transactions with broker-dealers or other
financial institutions which require the delivery to them of shares offered by this prospectus, which they may in turn resell; and
|
|
●
|
pledge shares to a broker-dealer or other financial institution, which,
upon a default, they may in turn resell.
|
In addition to the foregoing
methods, the Selling Shareholder may offer their shares from time to time in transactions involving principals or brokers not otherwise
contemplated above, in a combination of such methods as described above or any other lawful methods. The Selling Shareholder may also
transfer, donate or assign its shares to lenders, family members and others and each of such persons will be deemed to be a Selling Shareholder
for purposes of this prospectus. The Selling Shareholder or its successors in interest may from time to time pledge or grant a security
interest in some or all of the shares of common stock, and if the Selling Shareholder defaults in the performance of its secured obligations,
the pledgees or secured parties may offer and sell the shares of common stock from time to time under this prospectus; provided,
however in the event of a pledge or then default on a secured obligation by the Selling Shareholder, in order for the shares to
be sold under this registration statement, unless permitted by law, we must distribute a prospectus supplement and/or amendment to this
registration statement amending the list of selling shareholders to include the pledgee, secured party or other successors in interest
of the Selling Shareholder under this prospectus.
The Selling Shareholder may
also sell their shares pursuant to Rule 144 under the Securities Act, provided the Selling Shareholder meets the criteria and conform
to the requirements of such rule.
The Selling Shareholder may
effect such transactions directly or indirectly through underwriters, broker-dealers or agents acting on their behalf. Broker-dealers
or agents may receive commissions, discounts or concessions from the Selling Shareholder, in amounts to be negotiated immediately prior
to the sale (which compensation as to a particular broker-dealer might be in excess of customary commissions for routine market transactions).
If the shares of common stock are sold through underwriters or broker-dealers, the Selling Shareholder will be responsible for underwriting
discounts or commissions or agent's commissions. Neither we, nor the Selling Shareholder, can presently estimate the amount of that compensation.
If the Selling Shareholder notifies us that a material arrangement has been entered into with a broker- dealer for the sale of shares
through a block trade, special offering, exchange, distribution or secondary distribution or a purchase by a broker or dealer, we will
file a prospectus supplement, if required by Rule 424 under the Securities Act, setting forth: (i) the name of the selling
shareholder and the participating broker-dealers; (ii) the number of shares involved; (iii) the price at which the shares were
sold; (iv) the commissions paid or discounts or concessions allowed to the broker-dealers, where applicable; (v) a statement
to the effect that the broker-dealers did not conduct any investigation to verify the information set out or incorporated by reference
in this prospectus; and any other fact material to the transaction.
The Selling Shareholder and
any other person participating in a distribution of the shares covered by this prospectus will be subject to applicable provisions of
the Exchange Act, including, without limitation, Regulation M, which may limit the timing of purchases and sales of any of the shares
by the Selling Shareholder and any other such person. Furthermore, under Regulation M, any person engaged in the distribution of the
shares may not simultaneously engage in market-making activities with respect to the particular shares being distributed for certain
periods prior to the commencement of, or during, that distribution. All of the above may affect the marketability of the shares and the
ability of any person or entity to engage in market-making activities with respect to the shares. We have advised the Selling Shareholder
that the anti-manipulation rules of Regulation M under the Exchange Act may apply.
In offering the shares covered
by this prospectus, the Selling Shareholder, and any broker-dealers and any other participating broker-dealers who execute sales for
the Selling Shareholder, may be deemed to be “underwriters” within the meaning of the Securities Act in connection with these
sales. Any profits realized by the Selling Shareholder and the compensation of such broker-dealers may be deemed to be underwriting discounts
and commissions. We are not aware that the Selling Shareholder has entered into any arrangements with any underwriters or broker-dealers
regarding the sale of its shares of our common stock.
LEGAL MATTERS
The validity of the securities
offered hereby has been passed upon for us by Pryor Cashman LLP.
EXPERTS
Our consolidated financial
statements as of December 31, 2020, and for the year ended December 31, 2020, have been incorporated by reference in the registration
statement in reliance on the report of WWC, P.C., an independent registered public accounting firm, and upon the authority of said firm
as experts in accounting and auditing. Our consolidated financial statements as of December 31, 2019, and for the year ended December 31,
2019, have been incorporated by reference in the registration statement in reliance on the report of Marcum Bernstein & Pinchuk
LLP, an independent registered public accounting firm, and upon the authority of said firm as experts in accounting and auditing.
INCORPORATION OF CERTAIN
INFORMATION BY REFERENCE
The SEC allows us to “incorporate
by reference” the information we file with them into this prospectus. This means that we can disclose important information about
us and our financial condition to you by referring you to another document filed separately with the SEC instead of having to repeat
the information in this prospectus. The information incorporated by reference is considered to be part of this prospectus and later information
that we file with the SEC will automatically update and supersede this information. This prospectus incorporates by reference any future
filings made with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, between the date of the initial registration
statement and prior to effectiveness of the registration statement and the documents listed below that we have previously filed with
the SEC:
|
●
|
our Quarterly Report on Form 10-Q for the quarters ended March 31,
2021 and June 30, 2021, filed with the SEC on May 17,
2021 and August 13,
2021;
|
We also incorporate by reference
all documents that we file with the SEC on or after the effective time of this prospectus pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act and prior to the sale of all the securities registered hereunder or the termination of the registration statement. Nothing
in this prospectus shall be deemed to incorporate information furnished but not filed with the SEC.
Any statement contained in
this prospectus or in a document incorporated or deemed to be incorporated by reference in this prospectus shall be deemed to be modified
or superseded for purposes of this prospectus to the extent that a statement contained herein or in the applicable prospectus supplement
or in any other subsequently filed document that also is or is deemed to be incorporated by reference modifies or supersedes the statement.
Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this prospectus.
You may request a copy of
the filings incorporated herein by reference, including exhibits to such documents that are specifically incorporated by reference, at
no cost, by writing or calling us at the following address or telephone number:
Takung Art Co., Ltd
Room 709 Tower 2, Admiralty Centre, 18 Harcourt
Road,
Admiralty, Hong Kong
+852 3158-0977
Statements contained in this
prospectus as to the contents of any contract or other documents are not necessarily complete, and in each instance you are referred
to the copy of the contract or other document filed as an exhibit to the registration statement or incorporated herein, each such statement
being qualified in all respects by such reference and the exhibits and schedules thereto.
WHERE YOU CAN FIND MORE
INFORMATION
This prospectus is part of
a registration statement on Form S-3 that we filed with the SEC registering the securities that may be offered and sold hereunder.
The registration statement, including exhibits thereto, contains additional relevant information about us and these securities, as permitted
by the rules and regulations of the SEC, we have not included in this prospectus. A copy of the registration statement can be obtained
at the address set forth below or at the SEC’s website as noted below. You should read the registration statement, including any
applicable prospectus supplement, for further information about us and these securities.
We file annual, quarterly
and current reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet
at the SEC’s website at http:/www.sec.gov, or at our corporate website at http://www.takungart.com.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth all expenses payable
by us in connection with the offering of our securities being registered hereby.
SEC registration fee
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$
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422.68
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Legal fees and expenses
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*
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Accounting fees and expenses
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*
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Printing and miscellaneous expenses
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*
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Total expenses
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*
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*
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Estimated expenses are presently not known and cannot be estimated.
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Item 15. Indemnification of Directors and
Officers.
Section 145 of the Delaware
General Corporation Law authorizes a corporation’s board of directors to grant, and authorizes a court to award, indemnity to officers,
directors, and other corporate agents.
As permitted by Section 102(b)(7) of
the Delaware General Corporation Law, the Registrant’s amended and restated certificate of incorporation includes provisions that
eliminate the personal liability of its directors and officers for monetary damages for breach of their fiduciary duty as directors and
officers.
In addition, as permitted
by Section 145 of the Delaware General Corporation Law, the amended and restated certificate of incorporation and bylaws of the
Registrant provide that:
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The Registrant shall indemnify its directors and officers
for serving the Registrant in those capacities or for serving other business enterprises at the Registrant’s request, to the
fullest extent permitted by Delaware law. Delaware law provides that a corporation may indemnify such person if such person acted
in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the Registrant and,
with respect to any criminal proceeding, had no reasonable cause to believe such person’s conduct was unlawful.
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The Registrant may, in its discretion, indemnify employees
and agents in those circumstances where indemnification is permitted by applicable law.
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The Registrant may be required to advance expenses, as
incurred, to its directors and officers in connection with defending a proceeding, except that such director or officer shall undertake
to repay such advances if it is ultimately determined that such person is not entitled to indemnification.
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The Registrant may not be obligated pursuant to the amended
and restated bylaws to indemnify a person with respect to proceedings initiated by that person, except with respect to proceedings
authorized by the Registrant’s board of directors or brought to enforce a right to indemnification.
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The rights conferred in the amended and restated certificate
of incorporation and bylaws are not exclusive, and the Registrant is authorized to enter into indemnification agreements with its
directors, officers, employees, and agents and to obtain insurance to indemnify such persons.
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The Registrant may not retroactively amend the bylaw provisions
to reduce its indemnification obligations to directors, officers, employees, and agents.
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The Registrant is in the
process of obtaining directors and officers insurance to insure such persons against certain liabilities.
These indemnification provisions
may be sufficiently broad to permit indemnification of the Registrant’s officers and directors for liabilities (including reimbursement
of expenses incurred) arising under the Securities Act.
Item 16. Exhibits and Financial Schedule
See the Exhibit Index
attached to this registration statement and incorporated herein by reference.
Item 17. Undertakings.
The undersigned registrant
hereby undertakes:
(1) To file, during
any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) to include
any prospectus required by Section 10(a)(3) of the Securities Act;
(ii) to reflect
in the prospectus any facts or events arising after the effective date of this registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in this registration
statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation
of Registration Fee” table in the effective registration statement; and
(iii) to
include any material information with respect to the plan of distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
provided, however, that paragraphs (1)(i),
(1)(ii) and (1)(iii) do not apply if the information required to be included in a post-effective amendment by those paragraphs
is contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to Section 13 or Section 15(d) of
the Exchange Act, that are incorporated by reference in this registration statement, or is contained in a form of prospectus filed pursuant
to Rule 424(b) that is part of this registration statement.
(2) That, for the purposes
of determining any liability under the Securities Act, each post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration
by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose
of determining liability under the Securities Act to any purchaser:
(i) Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of
the date the filed prospectus was deemed part of and included in the registration statement; and
(ii) Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5) or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing
the information required by section 10(a) of the Securities Act shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of
securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person
that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the
securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus
that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration
statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such
effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such effective date.
(5) That, for the purpose
of determining liability of a Registrant under the Securities Act to any purchaser in the initial distribution of the securities:
The undersigned Registrant
undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this registration statement, regardless
of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means
of any of the following communications the undersigned Registrant will be a seller to the purchaser and will be considered to offer or
sell such securities to such purchaser:
(i) any preliminary
prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the
undersigned Registrant;
(iii) the
portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant
or its securities provided by or on behalf of the undersigned Registrant; and
(iv) any
other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.
(6) The undersigned
registrant hereby undertakes that:
(i) For purposes
of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration
statement in reliance upon rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared
effective.
(ii) For
the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The Registrant hereby undertakes
that, for purposes of determining any liability under the Securities Act, each filing of the Registrant’s annual report pursuant
to Section 13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an employee benefit plan’s
annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in this registration statement
shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification
for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant
to the indemnification provisions described herein, or otherwise, the Registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification
by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
SIGNATURES
Pursuant to the requirements
of the Securities Act, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing
on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized,
in Hong Kong on the 20th day of September, 2021.
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TAKUNG ART CO., LTD
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By:
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/s/ Tracy Chui-Kam Ng
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Tracy Chui-Kam Ng
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Chief Financial Officer
(Principal Financial Officer)
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Pursuant to the requirements
of the Securities Act, this registration statement has been signed by the following persons in the capacities and on the dates indicated.
Signature
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Title
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Date
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/s/ Kwok Leung Paul Li
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Chief Executive Officer
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September 20, 2021
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Kwok Leung Paul Li
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(Principal Executive Officer)
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/s/ Tracy Chui-Kam Ng
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Chief Financial Officer
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September 20, 2021
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Tracy Chui-Kam Ng
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(Principal Financial and Accounting Officer)
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*
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Director
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September 20, 2021
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Xiaoyu Zhang
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*
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Director
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September 20, 2021
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Jiangping (Gary) Xiao
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*
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Director
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September 20, 2021
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Li Lv
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*By: /s/ Tracy Chui-Kam Ng
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Tracy Chui-Kam Ng
Attorney-in-fact
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EXHIBIT INDEX
* Filed previously
(1)
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Incorporated herein by reference to the exhibits to our registration statement on Form S-1
filed with the SEC on August 16, 2011.
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(2)
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Incorporated herein by reference to the exhibit to our current report
on Form 8-K filed with the SEC on March 7, 2013.
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(3)
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Incorporated herein by reference to the exhibit to our current report on Form 8-K
filed with the SEC on November 6, 2014.
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(4)
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Incorporated herein by reference to Exhibit 3.1 to our current report on Form 8-K
filed with the SEC on August 12, 2015.
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(5)
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Incorporated herein by reference to Exhibit 4.1 to our Registration Statement on Form S-3 filed with
the SEC on July 23, 2021.
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(6)
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Incorporated herein by reference to Exhibit 10.1 to our current report on Form 8-K filed by
the Company with the SEC on July 13, 2021
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(7)
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Incorporated herein by reference to Exhibit 10.2 to our current report on Form 8-K filed by
the Company with the SEC on July 13, 2021
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