Item 1.01. Entry into a Material Definitive Agreement.
On April 11, 2019,
China Bat Group, Inc. (the “
Company
”) and certain institutional investors (the “
Purchasers
”)
entered into a securities purchase agreement (the “
Purchase Agreement
”), pursuant to which the Company agreed
to sell to such investors an aggregate of 1,680,000 shares of common stock (the “Common Stock”) in a registered direct
offering and warrants to purchase up to approximately 1,680,000 shares of the Company’s Common Stock in a concurrent private
placement, for gross proceeds of approximately $3.7 million (the “
Financing
”). The warrants will be exercisable
immediately following the date of issuance and have an exercise price of $2.20. The warrants will expire 5 years from the earlier
of the date on which the shares of Common Stock issuable upon exercise of the warrants may be sold pursuant to an effective registration
statement or may be exercised on a cashless basis and be immediately sold pursuant to Rule 144. The purchase price for each share
of Common Stock and the corresponding warrant is $2.20. Each warrant is subject to anti-dilution provisions to reflect stock dividends
and splits or other similar transactions, but not as a result of future securities offerings at lower prices. The warrants contain
a mandatory exercise right for the Company to force exercise of the warrants if the Company’s common stock trades at or above
$6.60 for 20 consecutive trading days provided, among other things, that the shares issuable upon exercise of the warrants are
registered or could be sold pursuant to Rule 144 and the daily trading volume exceeds 200,000 shares per trading day on each trading
day in a period of 20 consecutive trading days prior to the applicable date.
The Company agreed
in the Purchase Agreement that it would not issue any Common Stock (or Common Stock equivalents) for 60 calendar days following
the closing of the Offering subject to certain exception. The Company also agreed in the Purchase Agreement that it would file
with the Commission a registration statement on Form S-1 (or such other form as the Company is then eligible to use) as soon as
practicable (and in any event within 45 calendar days of the date of the Purchase Agreement) providing for the resale by the Purchasers
of the shares of Common Stock issuable upon exercise of the Warrants, and that it would use commercially reasonable efforts to
cause such registration statement to become effective as soon as practicable.
Concurrently with
the execution of the Purchase Agreement, certain officers and directors of the Company entered into lock-up agreements (the “
Lock-Up
Agreements
”) pursuant to which they have agreed, among other things, not to sell or dispose of any shares of Company
Common Stock which are or will be beneficially owned by them for sixty days following the closing of the Financing.
The Company currently
intends to use the net proceeds from the Financing for working capital and general corporate purposes. The Financing is expected
to close on or about April 15, 2019, subject to satisfaction of customary closing conditions.
The Company entered
into a letter agreement dated February 25, 2019 (the “
Letter Agreement’
) with Maxim Group LLC, as exclusive
placement agent (the “Placement Agent”), pursuant to which the Placement Agent agreed to act as the sole lead/exclusive
placement agent in connection with the Financing. The Company agreed to pay the Placement Agent an aggregate fee equal
to 7% of the gross proceeds raised in the Financing. The Company also agreed to reimburse the Placement Agent for certain expenses,
including for fees and expenses related to legal expenses limited to $90,000.
A copy of the Letter
Agreement, form of the Purchase Agreement, form of the Lock-up Agreement, and form of warrants are attached hereto as Exhibits
10.1, 10.2, 10.3, and 4.1, respectively, and are incorporated herein by reference. The foregoing summaries of the terms of the
Letter Agreement, Purchase Agreement, the Lock-up Agreement and the warrants are subject to, and qualified in their entirety by,
such documents.
On April 11, 2019,
the Company issued a press release announcing the Financing. A copy of the press release is attached hereto as Exhibit 99.1 and
is incorporated herein by reference.