Item 1.01. Entry into a Material Definitive Agreement.
On December 10, 2020, ZW Data Action Technologies Inc. (the
“Company”) and certain institutional investors entered into a securities purchase agreement, pursuant to which the
Company agreed to sell to such investors an aggregate of 4,320,989 shares of common stock of the Company, par value $0.001 per
share (the “Common Stock”) together with warrants to purchase a total of 1,728,396 shares of Common Stock, for gross
proceeds of approximately $7.0 million. Each purchaser of shares of Common Stock will receive a warrant to purchase a number of
shares equal to 40% of the number of shares of Common Stock the purchaser purchases in the offering with a warrant term of 36 months
(the “Warrants”). The purchase price for each share of Common Stock and the related Warrant is $1.62. Each warrant
has an exercise price of $2.03. Each Warrant is subject to anti-dilution provisions that require adjustment of the number of shares
of Common Stock that may be acquired upon exercise of the Warrant, or to the exercise price of such shares, or both, to reflect
stock dividends and splits, subsequent rights offerings, pro-rata distributions, and certain fundamental transactions. The Warrants
also contain “full ratchet” price protection in the event of subsequent issuances below the applicable exercise price.
The closing of the offering is expected to take place on or
about December 14, 2020, subject to the satisfaction of customary closing conditions.
On October 28, 2020, the Company entered into a letter agreement
with FT Global Capital, Inc., as exclusive placement agent (the “Placement Agent”), pursuant to which the Placement
Agent has agreed to act as placement agent on a best efforts basis in connection with the above offering. The Company
has agreed to pay the Placement Agent an aggregate fee equal to 7.0% of the gross proceeds from the sale of shares of Common Stock
and the Warrants in this offering. The Company has also agreed to issue to the Placement Agent a warrant to purchase a number of
shares of Common Stock equal to 7.0% of the aggregate number of shares of Common Stock sold in this offering, which warrant will
have an exercise price of $2.03 per share and will terminate on the three-year anniversary of the closing of the offering. The
Company also agreed to extend certain piggy-back registration rights with respect to the Placement Agent warrants, and to reimburse
the Placement Agent up to $30,000 for travel, due diligence or related expenses, and additional $30,000 for legal expenses.
The shares of Common Stock, the Warrants, and shares of Common
Stock issuable upon exercise of the Warrants will be issued pursuant to a prospectus supplement filed with the Securities and Exchange
Commission (the “SEC”), in connection with a takedown from the Company’s shelf registration statement on Form
S-3 (File No. 333-228061), which was declared effective by the SEC on August 3, 2020.
A copy of the Placement Agent letter agreement, form of securities
purchase agreement and form of Warrant are attached hereto as Exhibits 10.1, 10.2 and 4.1, respectively, and are incorporated herein
by reference. The foregoing summaries of the terms of the letter agreement, securities purchase agreement and the warrants are
subject to, and qualified in their entirety by, such documents.
On December 10, 2020, the Company issued a press release announcing
the offering. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.