Item 1.01. Entry into a Material Definitive Agreement.
On February 16, 2021, ZW Data Action Technologies Inc. (the “Company”)
and certain institutional investors (the “Investors”) entered into a securities purchase agreement, pursuant to which
the Company agreed to sell to such investors an aggregate of 5,212,000 shares (the “Shares”) of common stock of the
Company, par value $0.001 per share (the “Common Stock”) at a per share price of $3.59 or gross proceeds of approximately
$18.7 million.
The Company also agreed to sell to the Investors, in a concurrent private
placement, unregistered warrants to purchase up to an aggregate of 2,606,000 shares of Common Stock at an exercise price of $3.59
per share (the “Warrants”). The Warrants will expire three
and one-half years from the issuance date of the Warrants. Pursuant to the terms of a registration rights agreement, the Company
has agreed that within
30 days from the closing of the Closing Date under the Securities Purchase Agreement, the Company will file a registration statement on Form
S-3 (or other appropriate form if the Company is not then S-3 eligible) providing for the resale by the Investors of the Warrant
Shares and use commercially reasonable efforts to cause such registration to become effective no later than 75 days following the
closing date of the offering and the placement provided the SEC does not review the registration statement or 110 days following
the closing date of the offering and the placement in the event the SEC reviews the registration statement.
Net proceeds to the Company from the sale of the
Shares and the placement of the Warrants, after deducting estimated offering expenses and placement agent fees, are expected to
be approximately $17.1 million. The transaction is expected to close on or about February 18, 2021, subject to satisfaction of
customary closing conditions.
The offering of the Shares is being made pursuant
to the Company’s effective shelf registration statement on Form S-3 (File No. 333-228061), which was declared effective by
the Securities and Exchange Commission on August 3, 2020. With respect to the Warrants and the Placement Warrant (as defined below),
the placement is being made pursuant to Regulation D of the Securities Act of 1933, as amended (the “Securities Act”),
and the rules and regulations promulgated thereunder.
On February 16, 2021, the Company entered
into a placement agency 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 and placement. The Company has agreed to pay the Placement Agent an aggregate fee equal to 7.0% of the gross
proceeds from the sale of the Shares in this offering. The Company has also agreed to issue to the Placement Agent a warrant (the
“Placement 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 $4.4875 per share and will expire three and
one-half years from the issuance date of the Placement Warrants. The Company also agreed to reimburse the Placement Agent up to
$30,000 for travel, due diligence or related expenses, and an additional $30,000 for legal expenses.
A copy of the Placement Agent Agreement, form of securities purchase
agreement, form of Warrant, form of Placement Warrant and form of registration rights agreement are attached hereto as Exhibits
10.1, 10.2, 4.1, 4.2 and 4.3, respectively, and are incorporated herein by reference. The foregoing summaries of the terms of the
Placement Agency Agreement, securities purchase agreement and the warrants and Placement Warrant are subject to, and qualified
in their entirety by, such documents.
On February 16, 2021, 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.