Filed
Pursuant to Rule 424(b)(5)
Registration
No. 333-229323
PROSPECTUS
SUPPLEMENT
(To
Prospectus dated February 11, 2019)
1,200,000
Ordinary Shares
Pursuant
to this prospectus supplement and the accompanying prospectus, we are offering up to 1,200,000 ordinary shares, no par value (the “Ordinary
Shares”) of Taoping Inc. (the “Company”) at a price of $4.15 per share directly to certain investors. In a concurrent
private placement, we are also selling to the same investors warrants to purchase an aggregate of up to 360,000 Ordinary Shares at an
exercise price of $4.56 per share (the “Warrants”). The Warrants will be exercisable for a period of three years commencing
on the issue date. The Warrants and the Ordinary Shares issuable upon the exercise of such warrants are not being registered under the
Securities Act of 1933, as amended, or the Securities Act, and are not being offered pursuant to this prospectus supplement and the accompanying
prospectus and are being offered pursuant to an exemption from the registration requirements of the Securities Act provided in Section
4(a)(2) of the Securities Act and Rule 506(b) promulgated thereunder.
Our
Ordinary Shares trade on the NASDAQ Capital Market under the symbol “TAOP.” The last reported sale price of our Ordinary
Shares on the NASDAQ Capital Market on July 12, 2021 was $4.08 per share. As of the date of this prospectus supplement, the aggregate
market value of our outstanding Ordinary Shares held by non-affiliates is approximately $56.73 million, based on 13,646,360 Ordinary
Shares issued and outstanding, of which approximately 9,361,070 Ordinary Shares are held by non-affiliates, and a per share price
of $6.06 based on the closing price of our Ordinary Shares on May 12, 2021, which is the highest closing sale price of our Ordinary Shares
on The Nasdaq Capital Market within the prior 60 days.
During
the 12 calendar months prior to and including the date of this Prospectus Supplement, we have sold $5.95 million of our Ordinary Shares
pursuant to General Instruction I.B.5 of Form F-3. Pursuant to General Instruction I.B.5 of Form F-3, in no event will we sell securities
registered in a public primary offering with a value exceeding more than one-third of our public float in any 12 calendar month period
that ends on, and includes, the date of this prospectus supplement, so long as our public float remains below $75.0 million.
We
have not retained an underwriter or placement agent with respect to this offering and therefore are not paying any underwriting discounts
or commissions. We estimate the total expenses of this offering will be approximately $0.25 million.
Please
read “Risk Factors” beginning on page S-4 of this prospectus supplement and on page 2 of the accompanying prospectus.
Neither
the Securities and Exchange Commission nor any states securities commission has approved or disapproved of these securities or determined
if this prospectus supplement or the accompanying prospectus is truthful or complete. Any representation to the contrary is a criminal
offense.
The
date of this prospectus supplement is July 12, 2021
TABLE
OF CONTENTS
You
should rely only on the information contained in this prospectus supplement and the accompanying prospectus. We have not authorized anyone
else to provide you with additional or different information. We are offering to sell, and seeking offers to buy Ordinary Shares only
in jurisdictions where offers and sales are permitted. You should not assume that the information in this prospectus supplement or the
accompanying prospectus is accurate as of any date other than the date on the front of those documents or that any document incorporated
by reference is accurate as of any date other than its filing date.
No
action is being taken in any jurisdiction outside the United States to permit a public offering of the Ordinary Shares or possession
or distribution of this prospectus supplement or the accompanying prospectus in that jurisdiction. Persons who come into possession of
this prospectus supplement or the accompanying prospectus in jurisdictions outside the United States are required to inform themselves
about and to observe any restrictions as to this offering and the distribution of this prospectus supplement and the accompanying prospectus
applicable to that jurisdiction.
ABOUT
THIS PROSPECTUS SUPPLEMENT
On
January 22, 2019, we filed with the Securities and Exchange Commission, or the SEC, a registration statement on Form F-3 (File No. 333-229323)
utilizing a shelf registration process relating to the securities described in this prospectus supplement. The registration statement
was declared effective on February 11, 2019. Under this shelf registration process, we have registered, among others, to sell, from time
to time, up to $80,000,000 in the aggregate of Ordinary Shares, debt securities, warrants and units.
This
document is in two parts. The first part is the prospectus supplement, which describes the specific terms of this offering and adds,
updates and changes information contained in the accompanying prospectus. The second part is the accompanying prospectus, which gives
more general information, some of which may not apply to this offering. To the extent there is a conflict between the information contained
in this prospectus supplement, on the one hand, and the information contained in the accompanying prospectus or any document incorporated
by reference in this prospectus supplement or the accompanying prospectus, on the other hand, you should rely on the information in this
prospectus supplement. However, if any statement in one of these documents is inconsistent with a statement in another document having
a later date — for example, a document incorporated by reference in this prospectus supplement or the accompanying
prospectus — the statement in the document having the later date modifies or supersedes the earlier statement as
our business, financial condition, results of operations and prospects may have changed since the earlier dates.
This
prospectus supplement and the accompanying prospectus include important information about us, our Ordinary Shares and other information
you should know before investing. You should carefully read this prospectus supplement, the accompanying prospectus, all information
incorporated by reference herein and therein, as well as the additional information described under the heading “Where You Can
Find More Information.”
This
prospectus supplement and the accompanying prospectus and any free writing prospectus may contain and incorporate by reference, market
data and industry statistics and forecasts that are based on independent industry publications and other publicly available information.
Although we believe these sources are reliable, we do not guarantee the accuracy or completeness of this information, and we have not
independently verified this information. In addition, the market and industry data and forecasts that may be included or incorporated
by reference in this prospectus supplement and the accompanying prospectus or any applicable free writing prospectus may involve estimates,
assumptions and other risks and uncertainties and are subject to change based on various factors, including those discussed under the
heading “Risk Factors” contained in this prospectus supplement and the accompanying prospectus and any applicable free writing
prospectus, and under similar headings in other documents that are incorporated by reference into this prospectus supplement. Accordingly,
investors should not place undue reliance on this information.
FORWARD-LOOKING
INFORMATION
This
prospectus supplement contains “forward-looking statements” that involve substantial risks and uncertainties. All statements
other than statements of historical facts contained in this prospectus supplement, including statements regarding our future results
of operations and financial position, strategy and plans, and our expectations for future operations, are forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange
Act. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,”
“can,” “continue,” “could,” “estimates,” “expects,” “intends,”
“may,” “plans,” “potential,” “predicts,” “should,” or “will”
or the negative of these terms or other comparable terminology. Our actual results may differ materially or perhaps significantly from
those discussed herein, or implied by, these forward-looking statements. Forward-looking statements included or incorporated by reference
in this prospectus supplement or our other filings with the SEC, include, but are not necessarily limited to, those relating to:
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our
limited operating history of selling cloud-based products and services;
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our
independent registered auditors’ substantial doubt about our ability to continue as a going concern
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lack
of insurance coverage for our product-related liabilities and other business liability;
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outbreak
of coronavirus;
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uncertainties
related to China’s legal system and economic, political and social events in China;
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a
general economic downturn; and
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our
potential failure to maintain compliance with NASDAQ continued listing requirements.
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The
foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or
risk factors with which we are faced that may cause our actual results to differ from those anticipated in our forward-looking statements.
Please see “Risk Factors” in our reports filed or furnished with the SEC or in this prospectus supplement and the accompanying
prospectus for additional risks which could adversely impact our business and financial performance.
Moreover,
new risks regularly emerge and it is not possible for our management to predict or articulate all risks we face, nor can we assess the
impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results to differ from
those contained in any forward-looking statements. All forward-looking statements included in this prospectus supplement and the accompanying
prospectus are based on information available to us on the date of this prospectus supplement or the accompanying prospectus, as applicable.
Except to the extent required by applicable laws or rules, we undertake no obligation to publicly update or revise any forward-looking
statement, whether as a result of new information, future events or otherwise.
PROSPECTUS
SUMMARY
This
summary highlights information about us and the offering contained elsewhere in, or incorporated by reference into, this prospectus supplement
and the accompanying prospectus. It is not complete and may not contain all the information that may be important to you. You should
carefully read the entire prospectus supplement and the accompanying prospectus, as well as the information incorporated by reference,
before making an investment decision, especially the information presented under the heading “Risk Factors” beginning on
page S-4 of this prospectus supplement, and our financial statements and the notes to those financial statements, which are incorporated
by reference, and the other financial information appearing elsewhere in or incorporated by reference into this prospectus supplement.
See “Incorporation of Certain Information by Reference.” In this prospectus supplement, except as otherwise indicated or
as the context otherwise requires, “Taoping,” “the Company,” “we,” “our” and “us”
refer to Taoping Inc. and its subsidiaries and other consolidated entities.
About
Taoping Inc.
Company
Overview
We
are a leading provider of cloud-app technologies for Smart City IoT platforms, digital advertising delivery, and other internet-based
information distribution systems in China. Our Internet ecosystem enables all participants of the new media community to efficiently
promote branding, disseminate information, and exchange resources. In addition, we provide a broad portfolio of software and hardware
with fully integrated solutions, including Information Technology infrastructure, Internet-enabled display technologies, and IoT platforms
to customers in government, education, residential community management, media, transportation, and other private sectors.
We
were founded in 1993 and are headquartered in Shenzhen, China. Prior to 2014, we generated majority of our revenues through selling our
products mostly to public service entities to help improve their operational efficiency and service quality. Since 2014, we have expanded
and diversified our customer base into the private sector as well. Our customers in the private sector include, among others, elevator
maintenance companies, residential community management, advertising agencies, auto dealerships, and educational institutes. Our new
corporate mission is to make publicity accessible and affordable for businesses of all sizes.
We
generated revenues from sales of hardware products, software products, system integration services, and related maintenance and support
services. In 2015, with the introduction of our cloud-based software as a service (SaaS) offering, we expected to generate additional
recurring monthly revenues from SaaS fees. In 2019 and 2020, only a very small portion of our revenue was generated from SaaS, which
is expected to increase in the coming years with the nationwide roll-out of our cloud-based ad display terminal network.
In
May 2017, we completed our transformation to a provider of CAT and IoT technology based digital advertising distribution network and
new media resource sharing platform, and offered an end-to-end digital advertising solution enabling customers to efficiently and cost-effectively
direct advertisements to specific interactive ad display terminals in the out-of-home advertising market across China. In 2017, we became
profitable as a result of a successful transition of our business model. We continued to improve our financial position in 2018. However,
due to the unfavorable macro-economic environment and the slowdown of the out-of-home advertising market in China, we had net loss of
approximately $18.3 million and $3.6 million respectively in 2020 and 2019. For years going forward, we will continue to execute our
business plan and build a nationwide cloud-based ad terminal network by penetrating into more cities throughout China, which is expected
to generate substantial recurring service revenue for the Company, in addition to equipment sales.
Starting
from January 2020, the coronavirus outbreak, also known as COVID-19, has caused the Chinese government to take quarantine measures, such
as nationwide lockdowns, transportation restrictions, public gathering prohibitions and temporary closures of non-essential businesses,
which had put economic activities in a suspension mode until late March, in addition to the regular Chinese New Year Holiday. Although
the COVID-19 pandemic has largely been contained in China since the third quarter of 2020 and businesses have gradually resumed to operations,
China’s economic recovery still faces great challenges.
We
report financial and operational information in the following two segments:
(1)
Cloud-based Technology (CBT) segment — The CBT segment is our current and future focus of corporate development. It includes our
cloud-based products and services offered to customers in the private sector including new media, healthcare, education, and residential
community management. In this segment, we generate revenues from the sales of hardware, and the provision of total solutions of interactive
advertisement display terminals integrated with proprietary software, out-of-home digital advertising distribution, and advertising time
slot programmed trading transactions. We also generate revenue from monthly software subscription and Software-as-a Service (SaaS) fees.
(2)
Traditional Information Technology (TIT) segment — The TIT segment includes our project-based technology products and services
offered to the public sector, including Digital Public Security Technology (DPST) and Multi-screen Digital Display Systems (MDDS). In
this segment, we generate revenues from the sales of software and systems integration services.
Starting
from 2021, we also expanded to digital assets and blockchain businesses, through purchase of Antminers, general-purpose servers, establishment
or lease of data centers in various locations, and potential acquisition of companies in this market.
Corporate
Information
We
were incorporated in the British Virgin Islands on June 18, 2012. Our principal executive office is located at 21st Floor, Everbright
Bank Building, Zhuzilin, Futian District, Shenzhen, Guangdong Province 518040, People’s Republic of China. Our telephone number
is (+86) 755-8831-9888.
The
following chart reflects our organizational structure as of the date of this prospectus supplement.
THE
OFFERING
Ordinary
Shares Offered by Us
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1,200,000
shares
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Offering
Price Per Share
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$4.15
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Ordinary
Shares Outstanding Immediately Before the Offering*
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13,646,360
shares
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Ordinary
Shares to be Outstanding Immediately After the Offering (assumes all Ordinary Shares offered in this offering are sold and excludes
the shares underlying the Warrants)*
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14,846,360
shares
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Market
for the Ordinary Shares
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Our
Ordinary Shares are traded on the Nasdaq Capital Market under the symbol “TAOP.”
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Use
of Proceeds
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We
intend to use the net proceeds from this offering for working capital and other general corporate purposes. See “Use of Proceeds”
on page S-7 of this prospectus supplement.
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Risk
Factors
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Investing
in our securities involves a high degree of risk. For a discussion of factors you should consider carefully before deciding to invest
in our Ordinary Shares. See “Risk Factors” beginning on page S-4 of this prospectus supplement and on page 2 of the accompanying
prospectus and other information included or incorporated by reference in this prospectus supplement and the accompanying prospectus.
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Concurrent
Private Placement
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In
a concurrent private placement, we are selling to the same investors Warrants to purchase up to 360,000 Ordinary Shares with an exercise
price of $4.56 per share with a term of three years following the issue date. The Warrants and the Ordinary Shares
issuable upon the exercise of the Warrants are not being offered pursuant to this prospectus supplement and the accompanying prospectus.
See “Private Placement Transaction.”
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Transfer
Agent and Registrar
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Transhare
Corporation
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*The
number of our Ordinary Shares to be outstanding after this offering is based on 13,646,360 Ordinary Shares outstanding on July 12, 2021.
The
number of our Ordinary Shares outstanding immediately before and immediately after this offering excludes:
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up
to 26,667 Ordinary Shares issuable upon exercise of the warrants issued in October 2019;
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up
to 53,334 Ordinary Shares issuable upon exercise of the warrants issued in March 2020;
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up
to 53,333 Ordinary Shares issuable upon exercise of the warrants issued in September 2020;
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up
to 1,000,000 Ordinary Shares issuable upon exercise of the warrants issued in February 2021;
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up
to 915,000 Ordinary Shares issuable upon exercise of the warrants issued in April 2021;
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up
to 360,000 Ordinary Shares issuable upon exercise of the warrants issued in the concurrent private placement in July 2021;
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up
to 1,000,000 Ordinary Shares issuable upon conversion of the convertible note issued in September 2020 (the “September 2020
Notes”); and
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up
to 390,714 Ordinary Shares issuable upon the exercise of outstanding options, which were granted to our officers, employees and consultants
in July 2020 under our equity incentive plans.
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RISK
FACTORS
Any
investment in our securities involves a high degree of risk. You should consider carefully the risks described below as well as the risks
described in the section captioned “Risk Factors” in our annual report on Form 20-F for the year ended December 31, 2020,
and as updated by any document that we subsequently file with the SEC that is incorporated by reference in this prospectus supplement
or the accompanying prospectus, together with other information in this prospectus supplement, the accompanying prospectus and the information
and documents incorporated by reference in this prospectus supplement and the accompanying prospectus before you make a decision to invest
in our securities. If any of such risks actually occur, our business, operating results, prospects or financial condition could be materially
and adversely affected. This could cause the trading price of our Ordinary Shares to decline and you may lose all or part of your investment.
The risks described below are not the only ones that we face. Additional risks not presently known to us or that we currently deem immaterial
may also affect our business operations. The risks discussed below also include forward-looking statements and our actual results may
differ substantially from those discussed in these forward-looking statements. See “Forward-Looking Information.”
RISKS
RELATED TO THIS OFFERING
If
the COVID-19 pandemic is not effectively controlled in a short period of time, our business operation and financial condition in the
long-term may be materially and adversely affected as a result of any slowdown in economic growth, operation disruptions or other factors
that we cannot predict.
The
spread of the novel coronavirus (“COVID-19”), which was declared a pandemic by the World Health Organization in March 2020,
has caused different countries and cities to mandate curfews, including “shelter-in-place” and closures of most non-essential
businesses as well as other measures to mitigate the spread of the virus. All of our operating subsidiaries and affiliated entities are
located in China. All of our employees and substantially all of our customers and suppliers are also located in China. For most of the
first quarter of 2020, we scaled back operations, as our employees worked remotely or at premises in shifts for limited periods of time
in response to nationwide lockdowns and quarantines. The pandemic has also depressed customers’ demand for our products and services,
since businesses across China largely suspended or reduced operations during the first quarter of 2020. Our business and operations resumed
during the second quarter of 2020. However, the extent of the long-term adverse impact of COVID-19 on our business and operations is
highly uncertain and depends on several factors, such as the duration, severity, and geographic spread of the pandemic, development of
the testing and treatment and stimulus measures of the government, all of which are out of our control.
Given
the uncertainty of the outbreak, the spread of COVID-19 may be prolonged and worsened, and we may be forced to scale back or even suspend
our operations. As COVID-19 spreads outside China, the global economy is suffering a noticeable slowdown. As this outbreak persists,
commercial activities throughout the world have been curtailed with decreased consumer spending, business operation disruptions, interrupted
supply chain, difficulties in travel and reduced workforces. The duration and intensity of disruptions resulting from the COVID-19 outbreak
is uncertain. It is unclear as to when the outbreak will be contained, and we also cannot predict if the impact will be short-lived or
long-lasting. The extent to which outbreak impacts our long-term financial results will depend on its future developments. If the COVID-19
pandemic is not effectively controlled in a short period of time, our long-term business operation and financial condition may be materially
and adversely affected as a result of any slowdown in economic growth, operation disruptions or other factors that we cannot predict.
We
will have broad discretion as to the use of the proceeds from this offering, and we may not use the proceeds effectively.
Subject
to certain limited exceptions set forth in the offering documents, we have agreed to use the net proceeds from this offering solely for
working capital and general corporate purposes. We have considerable discretion in the application of the net proceeds of this offering.
You will not have the opportunity, as part of your investment decision, to assess whether the net proceeds are being used in a manner
agreeable to you. You must rely on our judgment regarding the application of the net proceeds of this offering. The net proceeds may
be used for corporate purposes that do not improve our profitability or increase the price of our shares. The net proceeds may also be
placed in investments that do not produce income or that lose value. The failure to use such funds by us effectively could have a material
adverse effect on our business, financial condition, operating results and cash flow.
A
large number of shares may be sold in the market following this offering, which may significantly depress the market price of our Ordinary
Shares.
The
Ordinary Shares sold in the offering will be freely tradable without restriction or further registration under the Securities Act. As
a result, a substantial number of our Ordinary Shares may be sold in the public market following this offering. If there are significantly
more Ordinary Shares offered for sale than buyers are willing to purchase, then the market price of our Ordinary Shares may decline to
a market price at which buyers are willing to purchase the offered Ordinary Shares and sellers remain willing to sell the Ordinary Shares.
If
we fail to maintain compliance with the continued listing requirements of NASDAQ, we would face possible delisting, which would result
in a limited public market for trading our shares and make obtaining future debt or equity financing more difficult for us.
Our
Ordinary Shares are traded and listed on the Nasdaq Capital Market under the symbol of “TAOP.” Our shares may be delisted,
if we fail to regain compliance with certain continued listing requirements of the Nasdaq Stock Market, or NASDAQ, in a timely manner.
On
June 18, 2019, we received a notification letter from the Listing Qualifications Staff of NASDAQ notifying us that the minimum bid price
per share for our Ordinary Shares has been below $1.00 for a period of 30 consecutive business days and we therefore no longer meet the
minimum bid price requirements set forth in Nasdaq Listing Rule 5550(a)(2). We regained the compliance with the minimum bid price rule
on August 20, 2020 by implementing a 1-for-6 share combination of our outstanding Ordinary Shares effective on July 30, 2020.
If
we fail to maintain compliance with the NASDAQ continued listing requirements, our Ordinary Shares may lose their status on Nasdaq Capital
Market and they would likely be traded on the over-the-counter market. As a result, selling our Ordinary Shares could be more difficult
because smaller quantities of shares would likely be bought and sold, transactions could be delayed, and security analysts’ coverage
of us may be reduced. In addition, in the event our Ordinary Shares are delisted, broker dealers would have bear certain regulatory burdens
which may discourage broker dealers from effecting transactions in our Ordinary Shares and further limiting the liquidity of our shares.
These factors could result in lower prices and larger spreads in the bid and ask prices for our Ordinary Shares. Such delisting from
NASDAQ and continued or further declines in our share price could also greatly impair our ability to raise additional necessary capital
through equity or debt financing, and could significantly increase the ownership dilution to shareholders caused by our issuing equity
in financing or other transactions.
If
our Ordinary Shares were delisted from NASDAQ, we may become subject to the trading complications experienced by “Penny Stocks”
in the over-the-counter market.
Delisting
from NASDAQ may cause our Ordinary Shares to become subject to the SEC’s “penny stock” rules. The SEC generally defines
a penny stock as an equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per
share, subject to specific exemptions. One such exemption is to be listed on NASDAQ. The market price of our Ordinary Shares is currently
below $5.00 per share. Therefore, were we to be delisted from NASDAQ, our Ordinary Shares will become subject to the SEC’s “penny
stock” rules. These rules require, among other things, that any broker engaging in a purchase or sale of our securities provide
its customers with: (i) a risk disclosure document, (ii) disclosure of market quotations, if any, (iii) disclosure of the compensation
of the broker and its salespersons in the transaction, and (iv) monthly account statements showing the market values of our securities
held in the customer’s accounts. A broker would be required to provide the bid and offer quotations and compensation information
before effecting the transaction. This information must be contained on the customer’s confirmation. Generally, brokers are less
willing to effect transactions in penny stocks due to these additional delivery requirements. These requirements may make it more difficult
for shareholders to purchase or sell our Ordinary Shares. Because the broker, not us, prepares this information, we would not be able
to assure that such information is accurate, complete or current.
The
market price of our Ordinary Shares has been volatile, leading to the possibility that their value may be depressed at a time when you
want to sell your holdings.
The
market price of our Ordinary Shares has been volatile, and this volatility may continue. From January 1, 2021 through July 12, 2021 the
closing price of our Ordinary Shares on the NASDAQ Capital Market has ranged from a high of $14.06 to a low of $2.81. Numerous
factors, many of which are beyond our control, may cause the market price of our Ordinary Shares to fluctuate significantly. These factors
include, among others:
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actual
or anticipated changes in our earnings, fluctuations in our operating results or our failure to meet the expectations of financial
market analysts and investors;
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changes
in financial estimates by us or by any securities analysts who might cover our share;
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speculation
about our business in the press or the investment community;
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significant
developments relating to our relationships with our customers or suppliers;
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stock
market price and volume fluctuations of other publicly traded companies and, in particular, those that are in our industry;
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customer
demand for our services and products;
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investor
perceptions of our industry in general and our company in particular;
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the
operating and share performance of comparable companies;
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general
economic conditions and trends;
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major
catastrophic events;
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announcements
by us or our competitors of new products, significant acquisitions, strategic partnerships or divestitures;
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changes
in accounting standards, policies, guidance, interpretation or principles;
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loss
of external funding sources;
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sales
of our Ordinary Shares, including sales by our directors, officers or significant shareholders;
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additions
or departures of key personnel; and
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investor
perception of litigation, investigation or other legal proceedings involving us or certain of our individual shareholders or their
family members.
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Any
of these factors may result in large and sudden changes in the volume and price at which our Ordinary Shares will trade. We cannot give
any assurance that these factors will not occur in the future again. In addition, the securities market has from time to time experienced
significant price and volume fluctuations that are not related to the operating performance of particular companies. These market fluctuations
may also have a material adverse effect on the market price of our Ordinary Shares. In the past, following periods of volatility in the
market price of their stock, many companies have been the subject of securities class action litigation. If we become involved in similar
securities class action litigation in the future, it could result in substantial costs and diversion of our management’s attention
and resources and could harm our stock price, business, prospects, financial condition and results of operations.
USE
OF PROCEEDS
We
estimate that the net proceeds from this offering will be approximately $4.73 million, after deducting the estimated expenses of this
registered direct offering and the concurrent private placement.
We
intend to use the net proceeds from this offering for working capital and general corporate purposes.
The
amounts and timing of our use of proceeds will vary depending on a number of factors, including the amount of cash generated or used
by our operations, and the rate of growth, if any, of our business. As a result, we will retain broad discretion in the allocation of
the net proceeds of this offering. In addition, while we have not entered into any agreements, commitments or understandings relating
to any significant transaction as of the date of this prospectus supplement, we may use a portion of the net proceeds to pursue acquisitions,
joint ventures and other strategic transactions. Depending on future events and others changes in the business climate, we may determine
at a later time to use the net proceeds for different purposes.
CAPITALIZATION
AND INDEBTEDNESS
The
table below sets forth our capitalization and indebtedness as of December 31, 2020:
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(1)
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on
an actual basis;
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(2)
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on
a pro forma basis, given the effect of (i) the issuance of 299,318 Ordinary Shares to certain investor upon conversion of a convertible
note issued in March 2020, which amount is calculated based on the sum of outstanding principal amount and accrued and unpaid interest
as of December 31, 2020; (ii) the issuance of 292,105 Ordinary Shares to certain investor upon conversion of a convertible note issued
in September 2020, which amount is calculated based on the sum of outstanding principal amount and accrued and unpaid interest as
of December 31, 2020; (iii) the issuance and sale of 740,740 Ordinary Shares in the registered direct offering in January 2021 at
the offering price of $2.70 per share; (iv) the issuance and sale of 1,900,000 Ordinary Shares in the private placement in February
2021 at the offering price of $4.08 per share; (v) the issuance and sale of 500,000 Ordinary Shares in the registered direct offering
in March 2021 at the offering price of $6.70 per share; (vi) the issuance of 1,213,630 Ordinary Shares upon the closing of acquisition
of Taoping New Media Co., Ltd. in June 2021; (vii) the issuance of 7,000 Ordinary Shares to a consultant as compensation for its
service; (viii) the issuance of warrants to purchase up to 1,000,000 Ordinary Shares of the Company to certain consultant in February
2021; (ix) the issuance of warrants to purchase up to 900,000 Ordinary Shares to certain consultants in April 2021; (x) the issuance
of warrants to purchase up to 15,000 Ordinary Shares to certain consultant in April 2021;and (xi) the issuance of 200,000 Ordinary
Shares to certain employees in March 2021 as equity awards.
|
|
|
|
|
(3)
|
on
a pro forma as adjusted basis to give effect to (i) the issuance and sale of 1,200,000 Ordinary Shares in the registered direct offering
pursuant to this prospectus supplement at the offering price of $4.15 per share and (ii) the issuance of Warrants to purchase up
to 360,000 Ordinary Shares in the concurrent private placement. We estimate that the net proceeds from this offering will
be approximately $4.73 million, after deducting the estimated expenses of this registered direct offering and the concurrent private
placement.
|
|
|
As
of December 31, 2020
|
|
|
|
Actual(1)*
|
|
|
Pro
Forma(2)***
|
|
|
Pro
Forma
As
Adjusted(3)***
|
|
Total
Current Liabilities
|
|
$
|
29,800,451
|
|
|
$
|
30,116,011
|
|
|
$
|
30,116,011
|
|
Short-term
bank loans
|
|
|
6,210,176
|
|
|
|
6,210,176
|
|
|
|
6,210,176
|
|
Convertible
note payable
|
|
|
1,180,908
|
|
|
|
584,009
|
|
|
|
584,009
|
|
Stockholders’
equity
|
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary
Shares**
|
|
|
131,247,787
|
|
|
|
155,222,265
|
|
|
|
158,879,346
|
|
Additional
paid-in capital
|
|
|
15,643,404
|
|
|
|
26,749,552
|
|
|
|
27,823,471
|
|
Reserve
|
|
|
14,044,269
|
|
|
|
14,044,269
|
|
|
|
14,044,269
|
|
Accumulated
deficit
|
|
|
(192,212,544
|
)
|
|
|
(195,147,645
|
)
|
|
|
(195,147,645
|
)
|
Accumulated
other comprehensive income
|
|
|
23,612,413
|
|
|
|
23,612,413
|
|
|
|
23,612,413
|
|
Total
equity of the Company
|
|
$
|
(7,664,671
|
)
|
|
$
|
24,480,854
|
|
|
$
|
29,211,854
|
|
Non-controlling
interest
|
|
|
8,640,871
|
|
|
|
8,640,871
|
|
|
|
8,640,871
|
|
Total
Equity
|
|
|
976,200
|
|
|
|
33,121,725
|
|
|
|
37,852,725
|
|
Total
capitalization
|
|
$
|
8,367,284
|
|
|
$
|
39,915,910
|
|
|
$
|
44,646,910
|
|
*
Based on 8,486,956 Ordinary Shares issued and outstanding as of December 31, 2020
**
Does not include any potential cash proceeds that we may receive from the exercise of any outstanding warrants of the Company.
***The
pro forma information above is illustrative only. You should read the above table together with our financial statements and the related
notes and the information included in our annual report on Form 20-F, dated April 30, 2021, which is incorporated by reference herein.
DESCRIPTION
OF ORDINARY SHARES WE ARE OFFERING
In
this offering, we are offering 1,200,000 Ordinary Shares pursuant to this prospectus supplement and the accompanying prospectus. A description
of the Ordinary Shares that we are offering pursuant to this Prospect Supplement is set forth under the heading “Description of
Share Capital” starting on page 4 of the accompanying prospectus.
PRIVATE
PLACEMENT TRANSACTION
The
material terms and provisions of the Warrants being offered in the concurrent private placement are summarized below. This summary is
subject to, and qualified in its entirety by, the terms of the Warrants as set forth in the form Warrant to be furnished as an exhibit
to our report on Form 6-K filed with the SEC on or about July 14, 2021.
In
a concurrent private placement, we will issue and sell to the investors Warrants to purchase up to 360,000 Ordinary Shares at an exercise
price equal to $4.56 per share.
The
Warrants and the Ordinary Shares issuable upon the exercise of such warrants are not being registered under the Securities Act, are not
being offered pursuant to this prospectus supplement and the accompanying prospectus and are being offered pursuant to the exemption
provided in Section 4(a)(2) under the Securities Act and/or Rule 506(b) promulgated thereunder. Accordingly, the investors may only sell
Ordinary Shares issued upon the exercise of Warrants pursuant to an effective registration statement under the Securities Act covering
the resale of those shares, an exemption under Rule 144 under the Securities Act or another applicable exemption under the Securities
Act.
Warrant
Exercisability.
The Warrants issued in the concurrent private placement is exercisable for a period of three years, at the initial exercise price
of $4.56 per share, in whole or in part by delivering to us a duly executed exercise notice and by payment in full in immediately available
funds for the number of Ordinary Shares purchased upon such exercise.
Exercise
Price Adjustment. The exercise price of the Warrants is subject to appropriate adjustment in the event of certain share dividends
and distributions, share splits, share combinations, reclassifications or similar events affecting our Ordinary Shares and also upon
any distributions of assets, including cash, stock or other property to our shareholders.
Rights
as a Shareholder. Prior to exercise of the Warrants, the holder of Warrants shall not, by reason of by being a holder, be entitled
to any rights of a shareholder with respect to the shares underlying the Warrants.
PLAN
OF DISTRIBUTION
We
are selling 1,200,000 Ordinary Shares in a registered direct offering to certain investors in a privately negotiated transaction pursuant
to this prospectus supplement and accompanying prospectus at a price of $4.15 per share. Such Ordinary Shares were offered directly to
the investors without a placement agent, underwriter, broker or dealer.
Transfer
Agent and Registrar
The
transfer agent and registrar for our Ordinary Shares is Transhare Corporation, 2849 Executive Dr., Suite 200, Clearwater FL 33762 and
its telephone number is (303) 662-1112.
Listing
Our
Ordinary Shares are traded on the Nasdaq Capital Market under the symbol “TAOP.”
LEGAL
MATTERS
The
validity of the issuance of the Ordinary Shares offered hereby will be passed upon for us by Maples and Calder, British Virgin Islands
counsel.
EXPERTS
The
consolidated financial statements of Taoping Inc. as of December 31, 2020 and 2019 and for the years ended December 31, 2020, 2019 and
2018 have been incorporated by reference herein in reliance upon the reports of UHY LLP, independent registered public accounting firm,
incorporated by reference herein, 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. This means that we can disclose important
information to you by referring you to those documents. Each document incorporated by reference is current only as of the date of such
document, and the incorporation by reference of such documents shall not create any implication that there has been no change in our
affairs since the date thereof or that the information contained therein is current as of any time subsequent to its date. The information
incorporated by reference is considered to be a part of this prospectus supplement and should be read with the same care. When we update
the information contained in documents that have been incorporated by reference by making future filings with the SEC, the information
incorporated by reference in this prospectus supplement is considered to be automatically updated and superseded. In other words, in
the case of a conflict or inconsistency between information contained in this prospectus supplement and information incorporated by reference
in this prospectus supplement, you should rely on the information contained in the document that was filed later.
The
documents we are incorporating by reference as of their respective dates of filing are:
|
●
|
Our
Annual Report on Form 20-F for the fiscal year ended December 31, 2020, filed with the SEC on April 30, 2021.
|
|
|
|
|
●
|
Our
Reports of Foreign Private Issuer on Form 6-K furnished on May 10, 2021, June 15, 2021, July 1, 2021 and July 14, 2021; and
|
|
|
|
|
●
|
The
description of the Company’s Ordinary Shares contained in the Form 8-K12B, filed with the SEC on October 31, 2012, and any
further amendment or report filed hereafter for the purpose of updating such description.
|
All
subsequent annual reports on Form 20-F and all subsequent reports on Form 6-K submitted by us to the SEC, that are identified by us as
being incorporated by reference, shall be deemed to be incorporated by reference into this prospectus supplement and deemed to be a part
hereof after the date of this prospectus supplement but before the termination of the offering under this prospectus supplement. Unless
expressly incorporated by reference, nothing in this prospectus supplement and the accompanying prospectus shall be deemed to incorporate
by reference information furnished to, but not filed with, the SEC.
Any
statement contained in a document incorporated or deemed to be incorporated by reference into this prospectus supplement will be deemed
to be modified or superseded for purposes of this prospectus supplement to the extent that a statement contained in this prospectus supplement
or any other subsequently filed document that is deemed to be incorporated by reference into this prospectus supplement modifies or supersedes
the statement. Any statement so modified or superseded will not be deemed, except as so modified or superseded, to constitute a part
of this prospectus supplement.
Copies
of all documents incorporated by reference in this prospectus supplement, including exhibits to these documents, will be provided at
no cost to each person, including any beneficial owner, who receives a copy of this prospectus supplement on the written or oral request
of that person made to:
Taoping
Inc.
21st
Floor, Everbright Bank Building, Zhuzilin
Futian
District, Shenzhen, Guangdong 518040
People’s
Republic of China
Telephone
number (+86)755-8370-8333.
You
may also obtain information about us by visiting our website at www.taop.com. Information contained in our website is not part
of this prospectus. We have included our website address in this prospectus solely as an inactive textual reference.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the SEC a registration statement on Form F-3 (File No. 333-229323) under the Securities Act with respect to the securities
offered by this prospectus supplement. This prospectus supplement and the accompanying prospectus, which constitute a part of our registration
statement on Form F-3, omit some information contained in the registration statement in accordance with SEC rules and regulations. You
should review the information and exhibits in the registration statement for further information on us and the securities we are offering.
Statements in this prospectus supplement and the accompanying prospectus concerning any document we filed as an exhibit to the registration
statement or that we otherwise filed with the SEC are not intended to be comprehensive and are qualified by reference to these filings.
You should review the complete document to evaluate these statements.
We
are subject to the reporting requirements of the Exchange Act that are applicable to a foreign private issuer. In accordance with the
Exchange Act, we file reports, including annual reports on Form 20-F containing financial statements audited by an independent accounting
firm. We also furnish to the SEC, under cover of Reports of Foreign Private Issuer on Form 6-K, material information required to be made
public by us or filed by us with and made public by any stock exchange or distributed by us to our shareholders. As a foreign private
issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements to shareholders,
and our officers, directors and principal shareholders are exempt from the “short-swing profits” reporting and liability
provisions contained in Section 16 of the Exchange Act and related Exchange Act rules. In addition, we are not required under the Exchange
Act to file periodic reports and financial statements as frequently or as promptly as U.S. companies whose securities are registered
under the Exchange Act.
The
SEC maintains an Internet site that contains reports, information statements and other information regarding issuers, such as us, that
file electronically with the SEC (http://www.sec.gov).
Additionally,
we make these filings available, free of charge, on our website at www.taop.com as soon as reasonably practicable after we electronically
file such materials with, or furnish them to, the SEC. The information on our website, other than these filings, is not, and should not
be, considered part of this prospectus supplement and is not incorporated by reference into this document.
PROSPECTUS
TAOPING
INC.
$80,000,000
Ordinary
Shares
Debt
Securities
Warrants
Units
Offered
by Taoping Inc.
And
500,000
Ordinary Shares Offered by the Selling Shareholder Named Herein
This
prospectus relates to a primary offering by us and a secondary offering by the selling shareholder named in this prospectus (the “Selling
Shareholder”).
In
the primary offering, we may offer, issue and sell from time to time our ordinary shares, no par value (“Ordinary Shares”),
debt securities, warrants, or units up to $80,000,000 or its equivalent in any other currency, currency units, or composite currency
or currencies in one or more issuances. We may sell any combination of these securities in one or more offerings.
In
addition, the Selling Shareholder may offer and sell from time to time up to 500,000 Ordinary Shares, covered by this prospectus.
This
prospectus describes some of the general terms that may apply to these securities and the general manner in which they may be offered.
The specific terms of any securities to be offered, and the specific manner in which they may be offered, will be described in a supplement
to this prospectus or incorporated into this prospectus by reference. You should read this prospectus and any supplement carefully before
you invest. Each prospectus supplement will indicate if the securities offered thereby will be listed or quoted on a securities exchange
or quotation system.
The
information contained or incorporated in this prospectus or in any prospectus supplement is accurate only as of the date of this prospectus,
or such prospectus supplement, as applicable, regardless of the time of delivery of this prospectus or any sale of our securities.
Our
Ordinary Shares are listed on the NASDAQ Capital Market under the symbol “TAOP.” On January 17, 2019, the last reported per
share sale price of our Ordinary Share was $1.15. As of January 17, 2019, the aggregate market value of our outstanding Ordinary Shares
held by non-affiliates was approximately $27.61 million, which was calculated based on approximately 41,760,163 shares of outstanding
ordinary shares, of which approximately 24,011,452 shares were held by non-affiliates. We have not offered and sold any securities pursuant
to General Instruction I.B.5 of Form F-3 during the prior 12 calendar month period that ends on, and includes, the date of this prospectus.
We
may offer securities through underwriting syndicates managed or co-managed by one or more underwriters, through agents, or directly to
purchasers. The prospectus supplement for each offering of securities will describe the plan of distribution for that offering. For general
information about the distribution of securities offered, please see “Plan of Distribution” in this prospectus.
Investing
in our securities involves risks. You should carefully consider the risk factors beginning on page 2 of this prospectus, in any accompanying
prospectus supplement and in any related free writing prospectus, and in the documents incorporated by reference into this prospectus,
any accompanying prospectus supplement and any related free writing prospectus before making any decision to invest in our securities.
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.
The
date of this prospectus is February 11, 2019
TABLE
OF CONTENTS
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or the SEC, using a “shelf”
registration process. Under this shelf registration process, we may sell our securities described in this prospectus in one or more offerings
up to a total dollar amount of $80,000,000 (or its equivalent in foreign or composite currencies). In addition, this prospectus relates
to the resale, from time to time, by the Selling Shareholder identified in this prospectus under the caption “Selling Shareholder,”
of up to 500,000 Ordinary Shares.
This
prospectus provides you with a general description of the securities that may be offered. Each time we offer our securities, we will
provide you with a supplement to this prospectus that will describe the specific amounts, prices and terms of the securities we offer.
The prospectus supplement may also add, update or change information contained in this prospectus. This prospectus, together with applicable
prospectus supplements and the documents incorporated by reference in this prospectus and any prospectus supplements, includes all material
information relating to this offering. Please read carefully both this prospectus and any prospectus supplement together with additional
information described below under “Where You Can Find More Information.”
You
should rely only on the information contained in or incorporated by reference in this prospectus and any applicable prospectus supplement.
Neither we nor the Selling Shareholder have authorized anyone to provide you with different or additional information. If anyone provides
you with different or inconsistent information, you should not rely on it. We nor the Selling Shareholder take no responsibility for,
and can provide no assurance as to the reliability of, any other information that others may give you. The information contained in this
prospectus is accurate only as of the date of this prospectus, regardless of the time of delivery of this prospectus or any sale of securities
described in this prospectus. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these
securities in any jurisdiction where the offer or sale is not permitted.
You
should not assume that the information contained in this prospectus and the accompanying prospectus supplement is accurate on any date
subsequent to the date set forth on the front of the document or that any information that we have incorporated by reference is correct
on any date subsequent to the date of the document incorporated by reference. Our business, financial condition, results of operations
and prospects may have changed since those dates.
TAOPING
INC.
We
are a leading provider of cloud-app technologies for Smart City IoT (Internet of Things) platforms, digital advertising delivery, and
other internet-based information distribution systems in China. Our Internet ecosystem enables all participants of the new media community
to efficiently promote branding, disseminate information, and exchange resources. In addition, we provide a broad portfolio of software,
hardware with fully integrated solutions, including Information Technology infrastructure, Internet-enabled display technologies, and
IoT platforms to customers in government, education, residential community management, media, transportation, and other private sectors.
We
were founded in 1993 and are headquartered in Shenzhen, China. As of September 30, 2018, we had approximately 110 employees.
Prior
to 2014, we generated the majority of our revenues through selling our products and services mostly to the public service entities to
help them improve their operational efficiency and service quality. Since 2014, we have expanded and diversified our customer base to
the private sector as well. Our customers in the private sector include, among others, elevator maintenance companies, residential community
management, advertising agencies, auto dealerships, and educational institutes. Our new corporate mission is to make publicity accessible
and affordable for businesses of all sizes.
We
generated revenues from sales of hardware products, software products, system integration services, and related maintenance and support
services. Starting in 2015, with the introduction of our cloud-based software as a service (SaaS) offering, we expect to generate additional
recurring monthly revenues from SaaS fees. In 2016 and 2017, a small portion of our revenue was generated from SaaS, which is expected
to increase in the coming years with the roll-out of our cloud-based elevator IoT and ad display terminals.
In
May 2017, we completed our transformation to a provider of Cloud-App-Terminal (CAT) and IoT technology based digital advertising distribution
network and new media resource sharing platform, and offered an end-to-end digital advertising solution enabling customers to efficiently
and cost-effectively direct advertisements to specific interactive ad display terminals in the Out-of-Home advertising market across
China. In 2017, we became profitable as a result of a successful transition of our business model. During the nine months of 2018, we
continued to expand the market and our revenue increased by 34.8% to $16.5 million from $12.2 million and net income attributable to
the Company increased 67.4% to $1.9 million from $1.1 million, compared to the same period of last year.
We
report financial and operational information in the following two segments:
|
(1)
|
Cloud-based
Technology (CBT) segment — The CBT segment is our current and future focus of corporate development. It includes our cloud-based
products and services offered to customers in the private sector including new media, healthcare, education, and residential community
management. In this segment, we generate revenues from the sales of hardware, and total solutions of interactive advertisement display
terminals integrated with proprietary software, Out-of-Home digital advertising distribution and advertising time slot programmed
trading transactions. We also generate revenue from monthly software subscription and Software-as-a Service (SaaS) fees.
|
|
|
|
|
(2)
|
Traditional
Information Technology (TIT) segment — The TIT segment includes our project-based technology products and services offered
to the public sector, including Digital Public Security Technology (DPST) and Multi-screen Digital Display Systems (MDDS). In this
segment, we generate revenues from the sales of software and systems integration services.
|
RISK
FACTORS
An
investment in our securities involves a high degree of risk. Some of these risks include:
|
●
|
We
have a limited operating history of selling our cloud-based products and services and may be unable to achieve or sustain profitability
or reasonably predict our future results.
|
|
|
|
|
●
|
Our
independent registered auditors have expressed substantial doubt about our ability to continue as a going concern.
|
|
|
|
|
●
|
Our
periodic operating results are difficult to predict and could fall below investors’ expectations or estimates by securities
research analysts, which may cause the trading price of our ordinary shares to decline.
|
|
|
|
|
●
|
PRC
laws and regulations governing our businesses and the validity of certain of our contractual relationships with iASPEC are uncertain.
If we are found to be in violation of such PRC laws and regulations, our business may be negatively affected and we may be forced
to relinquish our interests in those operations.
|
|
|
|
|
●
|
If
we fail to comply with the continued listing requirements of NASDAQ, we would face possible delisting, which would result in a limited
public market for trading our shares and make obtaining future debt or equity financing more difficult for us.
|
|
|
|
|
●
|
Because
we are incorporated under the laws of the British Virgins Islands, or BVI, it may be more difficult for our shareholders to protect
their rights than it would be for a shareholder of a corporation incorporated in another jurisdiction.
|
We
operate in a highly competitive environment in which there are numerous factors which can influence our business, financial position
or results of operations and which can also cause the market value of our ordinary shares to decline. Many of these factors are beyond
our control and therefore, are difficult to predict. Prior to making a decision about investing in our securities, you should carefully
consider the risk factors noted above, the risk factors discussed in the sections entitled “Risk Factors” contained in our
most recent Annual Report on Form 20-F filed with the SEC, and in any applicable prospectus supplement and our other filings with the
SEC and incorporated by reference in this prospectus or any applicable prospectus supplement, together with all of the other information
contained in this prospectus or any applicable prospectus supplement. 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. In that case, the trading price of our securities could decline and you might
lose all or part of your investment.
FORWARD-LOOKING
STATEMENTS
This
prospectus contains or incorporates forward-looking statements within the meaning of section 27A of the Securities Act and section 21E
of the Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements are management’s beliefs and assumptions.
In addition, other written or oral statements that constitute forward-looking statements are based on current expectations, estimates
and projections about the industry and markets in which we operate and statements may be made by or on our behalf. Words such as “should,”
“could,” “may,” “expect,” “anticipate,” “intend,” “plan,” “believe,”
“seek,” “estimate,” variations of such words and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are
difficult to predict. There are a number of important factors that could cause our actual results to differ materially from those indicated
by such forward-looking statements.
We
describe material risks, uncertainties and assumptions that could affect our business, including our financial condition and results
of operations, under “Risk Factors” and may update our descriptions of such risks, uncertainties and assumptions in any prospectus
supplement. We base our forward-looking statements on our management’s beliefs and assumptions based on information available to
our management at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is
expressed, implied or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking
statements. Reference is made in particular to forward-looking statements regarding growth strategies, financial results, product and
service development, competitive strengths, intellectual property rights, litigation, mergers and acquisitions, market acceptance or
continued acceptance of our products, accounting estimates, financing activities, ongoing contractual obligations and sales efforts.
Except as required under the federal securities laws, the rules and regulations of the SEC, stock exchange rules, and other applicable
laws, regulations and rules, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution
of this prospectus, whether as a result of new information, future events, changes in assumptions, or otherwise.
USE
OF PROCEEDS
Except
as described in any prospectus supplement and any free writing prospectus in connection with a specific offering, we currently intend
to use the net proceeds from the sale of the securities offered by us under this prospectus to fund the growth of our business, primarily
working capital, and for general corporate purposes.
We
may also use a portion of the net proceeds to acquire or invest in technologies, products and/or businesses that we believe will enhance
the value of our Company, although we do not currently have any agreements or understandings with third parties to make any material
acquisitions of, or investment in, other businesses. Depending on future events and others changes in the business climate, we may determine
at a later time to use the net proceeds for different purposes. As a result, our management will have broad discretion in the allocation
of the net proceeds and investors will be relying on the judgment of our management regarding the application of the proceeds of any
sale of the securities. Additional information on the use of net proceeds from the sale of securities covered by this prospectus may
be set forth in the prospectus supplement relating to the specific offering.
We
will not receive any proceeds from any sale of our Ordinary Shares by the Selling Shareholder.
SELLING
SHAREHOLDER
This
prospectus relates to the possible resale by the Selling Shareholder, Mr. Jianghuai Lin, our President, Chief Executive Officer and Chairman
of the Board of Directors, of up to 500,000 of our Ordinary Shares. These shares were acquired by the Selling Shareholder in November
2018 pursuant to a securities purchase agreement that the Selling Shareholder entered into with the Company on September 11, 2018. The
Selling Shareholder purchased 500,000 Ordinary Shares from the Company at a price of $1.50 per share.
Pursuant
to this prospectus, the Selling Shareholder may from time to time offer and sell any or all of the Ordinary Shares set forth below. When
we refer to the “Selling Shareholder” in this prospectus, we mean Mr. Lin and the pledgees, donees, transferees, assignees,
successors and others who later come to hold any of the Selling Shareholder’s interest in Ordinary Shares other than through a
public sale.
The
following table is based on information supplied to us by the Selling Shareholder and sets forth, as of January 17, 2019, information
regarding the Selling Shareholders’ beneficial ownership of our Ordinary Shares offered by him. Beneficial ownership is determined
in accordance with the rules of the SEC. In computing the number of Ordinary Shares beneficially owned by the Selling Shareholder and
the percentage of ownership of the Selling Shareholder, Ordinary Shares and underlying shares of convertible securities, options or warrants
held by the Selling Shareholder that are convertible or exercisable, as the case may be, within 60 days of January 17, 2019 are included.
The Selling Shareholder’s percentage of ownership in the following table is based upon 41,760,163 Ordinary Shares of the Company
outstanding as of January 17, 2019.
|
|
Before
the Offering
|
|
|
|
|
|
After
the Offering
|
|
Name
and Address of Beneficial Owner
|
|
Number
of Ordinary Shares
|
|
|
Percentage
of Outstanding Ordinary
|
|
|
Number
of
Ordinary
Shares Being Offered
|
|
|
Number
of Ordinary Shares
|
|
|
Percentage
of Outstanding Ordinary Shares
|
|
Jianghuai
Lin c/o Taoping Inc. 21st Floor, Everbright Bank Building Zhuzilin, Futian District Shenzhen, Guangdong, 518040 People’s Republic
of China
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17,458,134
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41.8
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%
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500,000
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16,958,134
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40.6
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%
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The
registration of these Ordinary Shares does not mean that the Selling Shareholder will sell or otherwise dispose of all or any of those
securities. The Selling Shareholder may sell or otherwise dispose of all, a portion or none of such shares from time to time. We do not
know the number of shares, if any, that will be offered for sale or other disposition by the Selling Shareholder under this prospectus.
Furthermore, the Selling Shareholder may have sold, transferred or disposed of the shares covered hereby in transactions exempt from
the registration requirements of the Securities Act since the date on which we filed this prospectus.
We
will not receive any proceeds from the sales by the Selling Shareholder. We have agreed to bear expenses incurred by the Selling Shareholder
that relate to the registration of the shares being offered and sold by the Selling Shareholder, including the SEC registration fee and
legal, accounting, printing and other expenses of this offering.
DESCRIPTION
OF SHARE CAPITAL
The
following describes our share capital, summarizes the material provisions of our amended and restated memorandum and articles of association,
which is based upon, and is qualified by reference to, our amended and restated memorandum and articles of association. This summary
does not purport to be a summary of all of the provisions of our amended and restated memorandum and articles of association. You should
read our amended and restated memorandum and articles of association which are filed as exhibits to the registration statement of which
this prospectus forms a part, for the provisions that are important to you.
The
Company is authorized to issue 100,000,000 Ordinary Shares, with no par value each. The Ordinary Shares may be issued from time to time
at the discretion of the Board of Directors without shareholder approval. The Board of Directors of the Company is authorized to issue
these shares in different classes and series and, with respect to each class or series, to determine the designations, powers, preferences,
privileges and other rights, including dividend rights, conversion rights, terms of redemption and liquidation preferences, any or all
of which may be greater than the powers and rights associated with the Ordinary Shares, at such times and on such other terms as they
think proper.
As
of January 17, 2019, there were 41,760,163 Ordinary Shares outstanding, all of which were
fully paid.
Register
of Members
Under
BVI law, a share in a BVI company is duly issued only when the name of the shareholder is entered in the register of members of a company,
and the register of members is by statute regarded as prima facie evidence of the shareholders of a company. A person becomes a shareholder
of a BVI company, and is therefore able to benefit from the rights attaching to such shares, only on the date that such person is entered
on the register of members.
Rights
and Obligations of Shareholders
Dividends.
Subject to the BVI Business Companies Act (as amended), or the BVI Act, the directors may, by resolution of directors, authorize a distribution
(including a dividend) by us to shareholders at such time and of such an amount as they think fit if they are satisfied, on reasonable
grounds, that immediately after the distribution, the value of our assets exceeds our liabilities and we are able to pay our debts as
they fall due. Any distribution payable in respect of a share which has remained unclaimed for three years from the date when it became
due for payment shall, if the board of the directors so resolves, be forfeited and cease to remain owing by us. The directors may, before
authorizing any distribution, set aside out of our profits such sum as they think proper as a reserve fund, and may invest the sum so
set apart as a reserve fund upon such securities as they may select. The holder of each ordinary share has the right to an equal share
in any distribution paid by us.
Voting
Rights. Each ordinary share confers on the shareholder the right to one vote at a meeting of the shareholders or on any resolution
of shareholders on all matters before our shareholders.
Winding
Up. The holder of each ordinary share is entitled to an equal share in the distribution of the surplus assets of us on a winding
up.
Redemption.
The directors may, on behalf of the Company, purchase, redeem or otherwise acquire any of our own shares for such consideration as the
directors consider fit, and either cancel or hold such shares as treasury shares. Shares may be purchased or otherwise acquired in exchange
for newly issued shares. The directors shall not, unless permitted pursuant to the BVI Act, purchase, redeem or otherwise acquire any
of our own shares unless immediately after such purchase, redemption or other acquisition, the value of our assets exceeds our liabilities
and we are able to pay our debts as they fall due.
Changes
in Rights of Shareholders
Under
our memorandum and articles of association, if at any time the shares which we are authorized to issue are divided into different classes
of shares, the rights attaching to any class may only be changed by a consent in writing of the holders of a majority of the issued shares
of that class or with the sanction of a resolution passed by the holders of at least a majority of the shares of the class present in
person or by proxy at a separate general meeting of the holders of the shares of the class. At such a separate general meeting, the quorum
shall be at least one person holding or representing by proxy a majority of the issued shares of the class.
Meetings
Under
the BVI Act, there is no requirement for an annual meeting of shareholders. Under our articles of association, we are required to hold
an annual meeting of shareholders at the time designated by the Board of Directors. Our annual shareholders’ meetings may be held
in such place within or outside the BVI as our Board of Directors considers appropriate.
Our
Board of Directors shall call a shareholders’ meeting if requested in writing to do so by shareholders entitled to exercise at
least 10% of the voting rights in respect of the matter for which the meeting is being requested.
Our
Board of Directors shall give not less than 10 days and not more than 60 days prior written notice of a shareholders’ meeting to
those persons whose names on, either (a) the date the notice is given or (b) on a date fixed by the directors as the record date (which
must be a date that is not less than 10 days nor more than 60 days prior to the meeting), appear as shareholders in our register and
are entitled to vote at the meeting. The inadvertent failure of the directors to give notice of a meeting to a shareholder, or the fact
that a shareholder has not received notice, does not invalidate the meeting.
Our
articles of association provide that a meeting of shareholders is duly constituted if, at the commencement of the meeting, there are
shareholders present in person or by proxy representing not less than a majority of the votes of the shares or class or series of shares
entitled to vote on resolutions of shareholders to be considered at the meeting. A shareholder may be represented at a meeting of shareholders
by a proxy (who need not be a shareholder) who may speak and vote on behalf of the shareholder. A written instrument giving the proxy
such authority must be produced at the place appointed for such purpose. A shareholder shall be deemed to be present at the meeting if
he participates by telephone or other electronic means and all shareholders participating in the meeting are able to hear each other.
Holders
of our ordinary shares are entitled to one vote for each share held of record on all matters at all meetings of shareholders, except
at a meeting where holders of a particular class or series of shares are entitled to vote separately. Our shareholders have no cumulative
voting rights. Our shareholders take action by a majority of votes cast, unless otherwise provided by the BVI Act or our memorandum and
articles of association.
Limitations
on Ownership of Securities
There
are no limitations on the right of non-residents or foreign persons to own our securities imposed by BVI law or by our memorandum and
articles of association.
Change
in Control of Company
Our
Board of Directors is authorized to issue our ordinary shares in different classes and series and, with respect to each class or series,
to determine the designations, powers, preferences, privileges and other rights, including dividend rights, conversion rights, terms
of redemption and liquidation preferences, any or all of which may be greater than the powers and rights associated with the ordinary
shares, at such times and on such other terms as they think proper. Such power could be used in a manner that would delay, defer or prevent
a change of control of our Company.
Ownership
Threshold
There
are no provisions governing the ownership threshold above which shareholder ownership must be disclosed imposed by BVI law or by our
memorandum and articles of association.
Changes
in Capital
Subject
to the provisions of our amended and restated memorandum and articles of association, the BVI Act and the rules of NASDAQ, our unissued
shares shall be at the disposal of the directors who may, without prejudice to any rights previously conferred on the holders of any
existing shares or class or series of shares, offer, allot, grant options over or otherwise dispose of the shares to such persons, at
such times and upon such terms and conditions as we may by resolution of directors determine.
Subject
to the provisions of the amended and restated memorandum of association relating to changes in the rights of shareholders and the powers
of directors in relation to shareholders, we may, by a resolution of members, amend our memorandum of association to increase or decrease
the number of ordinary shares authorized to be issued.
DESCRIPTION
OF DEBT SECURITIES
The
following is a summary of the general terms of the debt securities that we may issue. We will file a prospectus supplement that may contain
additional terms when we issue debt securities. The terms presented here, together with the terms in a related prospectus supplement,
will be a description of the material terms of the debt securities. You should also read the indenture under which the debt securities
are to be issued. We have filed a form of indenture governing different types of debt securities with the SEC as an exhibit to the registration
statement of which this prospectus is a part. All capitalized terms have the meanings specified in the indenture.
We
may issue, from time to time, debt securities, in one or more series, that will consist of senior debt, senior subordinated debt or subordinated
debt. We refer to the subordinated debt securities and the senior subordinated debt securities together as the subordinated securities.
The debt securities that we may offer will be issued under an indenture between us and an entity, identified in the applicable prospectus
supplement, as trustee. Debt securities, whether senior, senior subordinated or subordinated, may be issued as convertible debt securities
or exchangeable debt securities. The following is a summary of the material provisions of the indenture filed as an exhibit to the registration
statement of which this prospectus is a part.
As
you read this section, please remember that for each series of debt securities, the specific terms of your debt security as described
in the applicable prospectus supplement will supplement and, if applicable, may modify or replace the general terms described in the
summary below. The statement we make in this section may not apply to your debt security.
General
Terms of the Indenture
The
indenture does not limit the amount of debt securities that we may issue. It provides that we may issue debt securities up to the principal
amount that we may authorize and may be in any currency or currency unit that we may designate. We may, without the consent of the holders
of any series, increase the principal amount of securities in that series in the future, on the same terms and conditions and with the
same CUSIP numbers as that series. Except for the limitations on consolidation, merger and sale of all or substantially all of our assets
contained in the indenture, the terms of the indenture do not contain any covenants or other provisions designed to give holders of any
debt securities protection against changes in our operations, financial condition or transactions involving us.
We
may issue the debt securities issued under the indenture as “discount securities,” which means they may be sold at a discount
below their stated principal amount. These debt securities, as well as other debt securities that are not issued at a discount, may be
issued with “original issue discount”, or OID, for U.S. federal income tax purposes because of interest payment and other
characteristics. Material U.S. federal income tax considerations applicable to debt securities issued with original issue discount will
be described in more detail in any applicable prospectus supplement.
The
applicable prospectus supplement for a series of debt securities that we issue will describe, among other things, the following terms
of the offered debt securities:
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the
title and authorized denominations of the series of debt securities;
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any
limit on the aggregate principal amount of the series of debt securities;
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whether
such debt securities will be issued in fully registered form without coupons or in a form registered as to principal only with coupons
or in bearer form with coupons;
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whether
issued in the form of one or more global securities and whether all or a portion of the principal amount of the debt securities is
represented thereby;
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the
price or prices at which the debt securities will be issued;
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the
date or dates on which principal is payable;
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the
place or places where and the manner in which principal, premium or interest, if any, will be payable and the place or places where
the debt securities may be presented for transfer and, if applicable, conversion or exchange;
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interest
rates, and the dates from which interest, if any, will accrue, and the dates when interest is payable and the maturity;
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the
right, if any, to extend the interest payment periods and the duration of the extensions;
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our
rights or obligations to redeem or purchase the debt securities;
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any
sinking fund or other provisions that would obligate us to repurchase or otherwise redeem some or all of the debt securities;
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conversion
or exchange provisions, if any, including conversion or exchange prices or rates and adjustments thereto;
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the
currency or currencies of payment of principal or interest;
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the
terms applicable to any debt securities issued at a discount from their stated principal amount;
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the
terms, if any, under which any debt securities will rank junior to any of our other debt;
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whether
and upon what terms the debt securities may be defeased, if different from the provisions set forth in the indenture;
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if
the amount of payments of principal or interest is to be determined by reference to an index or formula, or based on a coin or currency
other than that in which the debt securities are stated to be payable, the manner in which these amounts are determined and the calculation
agent, if any, with respect thereto;
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the
provisions, if any, relating to any collateral provided for the debt securities;
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if
other than the entire principal amount of the debt securities when issued, the portion of the principal amount payable upon acceleration
of maturity as a result of a default on our obligations;
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the
events of default and covenants relating to the debt securities that are in addition to, modify or delete those described in this
prospectus;
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the
nature and terms of any security for any secured debt securities; and
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any
other specific terms of any debt securities.
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The
applicable prospectus supplement will present material U.S. federal income tax considerations for holders of any debt securities and
the securities exchange or quotation system on which any debt securities are to be listed or quoted.
Senior
Debt Securities
Payment
of the principal of, premium and interest, if any, on senior debt securities will rank on a parity with all of our other secured/unsecured
and unsubordinated debt.
Senior
Subordinated Debt Securities
Payment
of the principal of, premium and interest, if any, on senior subordinated debt securities will be junior in right of payment to the prior
payment in full of all of our unsubordinated debt, including senior debt securities and any credit facility. We will state in the applicable
prospectus supplement relating to any senior subordinated debt securities the subordination terms of the securities as well as the aggregate
amount of outstanding debt, as of the most recent practicable date, that by its terms would be senior to the senior subordinated debt
securities. We will also state in such prospectus supplement limitations, if any, on issuance of additional senior debt.
Subordinated
Debt Securities
Payment
of the principal of, premium and interest, if any, on subordinated debt securities will be subordinated and junior in right of payment
to the prior payment in full of all of our senior debt, including our senior debt securities and senior subordinated debt securities.
We will state in the applicable prospectus supplement relating to any subordinated debt securities the subordination terms of the securities
as well as the aggregate amount of outstanding indebtedness, as of the most recent practicable date, that by its terms would be senior
to the subordinated debt securities. We will also state in such prospectus supplement limitations, if any, on issuance of additional
senior indebtedness.
Conversion
or Exchange Rights
Debt
securities may be convertible into or exchangeable for other securities being registered in this registration statement, including, for
example, shares of our equity securities. The terms and conditions of conversion or exchange will be stated in the applicable prospectus
supplement. The terms will include, among others, the following:
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the
conversion or exchange price;
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the
conversion or exchange period;
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provisions
regarding the ability of us or the holder to convert or exchange the debt securities;
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events
requiring adjustment to the conversion or exchange price; and
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provisions
affecting conversion or exchange in the event of our redemption of the debt securities.
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Consolidation,
Merger or Sale
We
cannot consolidate or merge with or into, or transfer or lease all or substantially all of our assets to, any person, and we cannot permit
any other person to consolidate with or merge into us, unless (1) we will be the continuing corporation or (2) the successor corporation
or person to which our assets are transferred or leased is a corporation organized under the laws of the United States, any state of
the United States or the District of Columbia and it expressly assumes our obligations under the debt securities and the indenture. In
addition, we cannot complete such a transaction unless immediately after completing the transaction, no event of default under the indenture,
and no event which, after notice or lapse of time or both, would become an event of default under the indenture, shall have occurred
and be continuing. When the person to whom our assets are transferred or leased has assumed our obligations under the debt securities
and the indenture, we shall be discharged from all our obligations under the debt securities and the indenture except in limited circumstances.
This
covenant would not apply to any recapitalization transaction, a change of control of us or a highly leveraged transaction, unless the
transaction or change of control were structured to include a merger or consolidation or transfer or lease of all or substantially all
of our assets.
Events
of Default
The
term “Event of Default,” when used in the indenture, unless otherwise indicated, means any of the following:
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failure
to pay interest for 30 days after the date payment is due and payable;
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failure
to pay principal or premium, if any, on any debt security when due, either at maturity, upon any redemption, by declaration or otherwise;
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failure
to make sinking fund payments when due;
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failure
to perform other covenants for 60 days after notice that performance was required;
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events
in bankruptcy, insolvency or reorganization relating to us; or
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any
other Event of Default provided in the applicable officer’s certificate, resolution of our board of directors or the supplemental
indenture under which we issue a series of debt securities.
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An
Event of Default for a particular series of debt securities does not necessarily constitute an Event of Default for any other series
of debt securities issued under the indenture.
If
an Event of Default with respect to any series of senior debt securities occurs and is continuing, then either the trustee for such series
or the holders of a majority in aggregate principal amount of the outstanding debt securities of such series, by notice in writing, may
declare the principal amount of and interest on all of the debt securities of such series to be due and payable immediately; provided,
however, unless otherwise provided in the applicable prospectus supplement, if such an Event of Default occurs and is continuing with
respect to more than one series of senior debt securities under the indenture, the trustee for such series or the holders of a majority
in aggregate principal amount of the outstanding debt securities of all such series of senior debt securities of equal ranking (or, if
any of such senior debt securities are discount securities, such portion of the principal amount as may be specified in the terms of
that series), voting as one class, may make such declaration of acceleration as to all series of such equal ranking and not the holders
of the debt securities of any one of such series of senior debt securities.
If
an Event of Default with respect to any series of subordinated securities occurs and is continuing, then either the trustee for such
series or the holders of a majority in aggregate principal amount of the outstanding debt securities of such series, by notice in writing,
may declare the principal amount of and interest on all of the debt securities of such series to be due and payable immediately; provided,
however, unless otherwise provided in the applicable prospectus supplement, if such an Event of Default occurs and is continuing with
respect to more than one series of subordinated securities under the indenture, the trustee for such series or the holders of a majority
in aggregate principal amount of the outstanding debt securities of all such series of subordinated securities of equal ranking (or,
if any of such subordinated securities are discount securities, such portion of the principal amount as may be specified in the terms
of that series), voting as one class, may make such declaration of acceleration as to all series of equal ranking and not the holders
of the debt securities of any one of such series of subordinated securities. The holders of not less than a majority in aggregate principal
amount of the debt securities of all affected series of equal ranking may, after satisfying certain conditions, rescind and annul any
of the above-described declarations and consequences involving such series.
If
an Event of Default relating to events in bankruptcy, insolvency or reorganization of us occurs and is continuing, then the principal
amount of all of the debt securities outstanding, and any accrued interest, will automatically become due and payable immediately, without
any declaration or other act by the trustee or any holder.
The
indenture imposes limitations on suits brought by holders of debt securities against us. Except for actions for payment of overdue principal
or interest, no holder of debt securities of any series may institute any action against us under the indenture unless:
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holder has previously given to the trustee written notice of default and continuance of such default;
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the
holders of not less than a majority in principal amount of the outstanding debt securities of the affected series of equal ranking
have requested that the trustee institute the action;
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the
requesting holders have offered the trustee reasonable indemnity for expenses and liabilities that may be incurred by bringing the
action;
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the
trustee has not instituted the action within 60 days of the request; and
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the
trustee has not received inconsistent direction by the holders of a majority in principal amount of the outstanding debt securities
of the affected series of equal ranking.
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We
will be required to file annually with the trustee a certificate, signed by one of our officers, stating whether or not the officer knows
of any default by us in the performance, observance or fulfillment of any condition or covenant of the indenture.
Registered
Global Securities and Book Entry System
The
debt securities of a series may be issued in whole or in part in book-entry form and may be represented by one or more fully registered
global securities or in unregistered form with or without coupons. We will deposit any registered global securities with a depositary
or with a nominee for a depositary identified in the applicable prospectus supplement and registered in the name of such depositary or
nominee. In such case, we will issue one or more registered global securities denominated in an amount equal to the aggregate principal
amount of all of the debt securities of the series to be issued and represented by such registered global security or securities. This
means that we will not issue certificates to each holder.
Unless
and until it is exchanged in whole or in part for debt securities in definitive registered form, a registered global security may not
be transferred except as a whole:
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by
the depositary for such registered global security to its nominee;
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by
a nominee of the depositary to the depositary or another nominee of the depositary; or
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by
the depositary or its nominee to a successor of the depositary or a nominee of the successor.
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The
prospectus supplement relating to a series of debt securities will describe the specific terms of the depositary arrangement involving
any portion of the series represented by a registered global security. We anticipate that the following provisions will apply to all
depositary arrangements for registered debt securities:
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ownership
of beneficial interests in a registered global security will be limited to persons that have accounts with the depositary for such
registered global security, these persons being referred to as “participants,” or persons that may hold interests through
participants;
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upon
the issuance of a registered global security, the depositary for the registered global security will credit, on its book-entry registration
and transfer system, the participants’ accounts with the respective principal amounts of the debt securities represented by
the registered global security beneficially owned by the participants;
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any
dealers, underwriters, or agents participating in the distribution of the debt securities represented by a registered global security
will designate the accounts to be credited; and
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ownership
of beneficial interest in such registered global security will be shown on, and the transfer of such ownership interest will be effected
only through, records maintained by the depositary for such registered global security for interests of participants, and on the
records of participants for interests of persons holding through participants.
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The
laws of some states may require that specified purchasers of securities take physical delivery of the securities in definitive form.
These laws may limit the ability of those persons to own, transfer or pledge beneficial interests in registered global securities.
So
long as the depositary for a registered global security, or its nominee, is the registered owner of such registered global security,
the depositary or such nominee, as the case may be, will be considered the sole owner or holder of the debt securities represented by
the registered global security for all purposes under the indenture. Except as stated below, owners of beneficial interests in a registered
global security:
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will
not be entitled to have the debt securities represented by a registered global security registered in their names;
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will
not receive or be entitled to receive physical delivery of the debt securities in the definitive form; and
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will
not be considered the owners or holders of the debt securities under the relevant indenture.
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Accordingly,
each person owning a beneficial interest in a registered global security must rely on the procedures of the depositary for the registered
global security and, if the person is not a participant, on the procedures of a participant through which the person owns its interest,
to exercise any rights of a holder under the indenture.
We
understand that under existing industry practices, if we request any action of holders or if an owner of a beneficial interest in a registered
global security desires to give or take any action that a holder is entitled to give or take under the indenture, the depositary for
the registered global security would authorize the participants holding the relevant beneficial interests to give or take the action,
and the participants would authorize beneficial owners owning through the participants to give or take the action or would otherwise
act upon the instructions of beneficial owners holding through them.
We
will make payments of principal and premium, if any, and interest, if any, on debt securities represented by a registered global security
registered in the name of a depositary or its nominee to the depositary or its nominee, as the case may be, as the registered owners
of the registered global security. None of us, the trustee or any other agent of ours or the trustee will be responsible or liable for
any aspect of the records relating to, or payments made on account of, beneficial ownership interests in the registered global security
or for maintaining, supervising or reviewing any records relating to the beneficial ownership interests.
We
expect that the depositary for any debt securities represented by a registered global security, upon receipt of any payments of principal
and premium, if any, and interest, if any, in respect of the registered global security, will immediately credit participants’
accounts with payments in amounts proportionate to their respective beneficial interests in the registered global security as shown on
the records of the depositary. We also expect that standing customer instructions and customary practices will govern payments by participants
to owners of beneficial interests in the registered global security held through the participants, as is now the case with the securities
held for the accounts of customers in bearer form or registered in “street name.” We also expect that any of these payments
will be the responsibility of the participants.
If
the depositary for any debt securities represented by a registered global security is at any time unwilling or unable to continue as
depositary or stops being a clearing agency registered under the Exchange Act, we will appoint an eligible successor depositary. If we
fail to appoint an eligible successor depositary within 90 days, we will issue the debt securities in definitive form in exchange for
the registered global security. In addition, we may at any time and in our sole discretion decide not to have any of the debt securities
of a series represented by one or more registered global securities. In that event, we will issue debt securities of the series in a
definitive form in exchange for all of the registered global securities representing the debt securities. The trustee will register any
debt securities issued in definitive form in exchange for a registered global security in the name or names as the depositary, based
upon instructions from its participants, shall instruct the trustee.
We
may also issue bearer debt securities of a series in the form of one or more global securities, referred to as “bearer global securities.”
The prospectus supplement relating to a series of debt securities represented by a bearer global security will describe the applicable
terms and procedures. These will include the specific terms of the depositary arrangement and any specific procedures for the issuance
of debt securities in definitive form in exchange for a bearer global security, in proportion to the series represented by a bearer global
security.
Discharge,
Defeasance and Covenant Defeasance
We
can discharge or decrease our obligations under the indenture as stated below.
We
may discharge obligations to holders of any series of debt securities that have not already been delivered to the trustee for cancellation
and that have either become due and payable or are by their terms to become due and payable, or are scheduled for redemption, within
sixty (60) days. We may effect a discharge by irrevocably depositing with the trustee cash or U.S. government obligations, as trust funds,
in an amount certified to be enough to pay when due, whether at maturity, upon redemption or otherwise, the principal of, premium and
interest, if any, on the debt securities and any mandatory sinking fund payments.
Unless
otherwise provided in the applicable prospectus supplement, we may also discharge any and all of our obligations to holders of any series
of debt securities at any time, which we refer to as defeasance. We may also be released from the obligations imposed by any covenants
of any outstanding series of debt securities and provisions of the indenture, and we may omit to comply with those covenants without
creating an event of default under the trust declaration, which we refer to as covenant defeasance. We may effect defeasance and covenant
defeasance only if, among other things:
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we
irrevocably deposit with the trustee cash or U.S. government obligations, as trust funds, in an amount certified to be enough to
pay at maturity, or upon redemption, the principal, premium and interest, if any, on all outstanding debt securities of the series;
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we
deliver to the trustee an opinion of counsel from a nationally recognized law firm to the effect that the holders of the series of
debt securities will not recognize income, gain or loss for U.S. federal income tax purposes as a result of the defeasance or covenant
defeasance and that defeasance or covenant defeasance will not otherwise alter the holders’ U.S. federal income tax treatment
of principal, premium and interest, if any, payments on the series of debt securities; and
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in
the case of subordinated debt securities, no event or condition shall exist that, based on the subordination provisions applicable
to the series, would prevent us from making payments of principal of, premium and interest, if any, on any of the applicable subordinated
debt securities at the date of the irrevocable deposit referred to above or at any time during the period ending on the 91st day
after the deposit date.
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In
the case of a defeasance by us, the opinion we deliver must be based on a ruling of the Internal Revenue Service issued, or a change
in U.S. federal income tax law occurring, after the date of the indenture, since such a result would not occur under the U.S. federal
income tax laws in effect on such date.
Although
we may discharge or decrease our obligations under the indenture as described in the two preceding paragraphs, we may not avoid, among
other things, our duty to register the transfer or exchange of any series of debt securities, to replace any temporary, mutilated, destroyed,
lost or stolen series of debt securities or to maintain an office or agency in respect of any series of debt securities.
Modification
of the Indenture
The
indenture provides that we and the trustee may enter into supplemental indentures without the consent of the holders of debt securities
to:
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secure
any debt securities and provide the terms and conditions for the release or substitution of the security;
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evidence
the assumption by a successor corporation of our obligations;
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add
covenants for the protection of the holders of debt securities;
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add
any additional events of default;
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cure
any ambiguity or correct any inconsistency or defect in the indenture;
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add
to, change or eliminate any of the provisions of the indenture in a manner that will become effective only when there is no outstanding
debt security which is entitled to the benefit of the provision as to which the modification would apply;
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establish
the forms or terms of debt securities of any series;
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eliminate
any conflict between the terms of the indenture and the Trust Indenture Act of 1939;
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evidence
and provide for the acceptance of appointment by a successor trustee and add to or change any of the provisions of the indenture
as is necessary for the administration of the trusts by more than one trustee; and
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make
any other provisions with respect to matters or questions arising under the indenture that will not be inconsistent with any provision
of the indenture as long as the new provisions do not adversely affect the interests of the holders of any outstanding debt securities
of any series created prior to the modification.
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The
indenture also provides that we and the trustee may, with the consent of the holders of not less than a majority in aggregate principal
amount of debt securities of all series of senior debt securities or of Subordinated Securities of equal ranking, as the case may be,
then outstanding and affected, voting as one class, add any provisions to, or change in any manner, eliminate or modify in any way the
provisions of, the indenture or modify in any manner the rights of the holders of the debt securities. We and the trustee may not, however,
without the consent of the holder of each outstanding debt security affected thereby:
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extend
the final maturity of any debt security;
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reduce
the principal amount or premium, if any;
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reduce
the rate or extend the time of payment of interest;
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reduce
any amount payable on redemption or impair or affect any right of redemption at the option of the holder of the debt security;
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change
the currency in which the principal, premium or interest, if any, is payable;
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reduce
the amount of the principal of any debt security issued with an original issue discount that is payable upon acceleration or provable
in bankruptcy;
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alter
provisions of the relevant indenture relating to the debt securities not denominated in U.S. dollars;
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impair
the right to institute suit for the enforcement of any payment on any debt security when due;
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if
applicable, adversely affect the right of a holder to convert or exchange a debt security; or
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reduce
the percentage of holders of debt securities of any series whose consent is required for any modification of the indenture.
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The
indenture provides that the holders of not less than a majority in aggregate principal amount of the then outstanding debt securities
of any and all affected series of equal ranking, by notice to the relevant trustee, may on behalf of the holders of the debt securities
of any and all such series of equal ranking waive any default and its consequences under the indenture except:
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a
continuing default in the payment of interest on, premium, if any, or principal of, any such debt security held by a non-consenting
holder; or
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a
default in respect of a covenant or provision of the indenture that cannot be modified or amended without the consent of the holder
of each outstanding debt security of each series affected.
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Concerning
the Trustee
The
indenture provides that there may be more than one trustee under the indenture, each for one or more series of debt securities. If there
are different trustees for different series of debt securities, each trustee will be a trustee of a trust under the indenture separate
and apart from the trust administered by any other trustee under that indenture.
Except
as otherwise indicated in this prospectus or any prospectus supplement, any action permitted to be taken by a trustee may be taken by
such trustee only on the one or more series of debt securities for which it is the trustee under the indenture. Any trustee under the
indenture may resign or be removed from one or more series of debt securities. All payments of principal of, premium and interest, if
any, on, and all registration, transfer, exchange, authentication and delivery of, the debt securities of a series will be effected by
the trustee for that series at an office designated by the trustee.
If
the trustee becomes a creditor of ours, the indenture places limitations on the right of the trustee to obtain payment of claims or to
realize on property received in respect of any such claim as security or otherwise. The trustee may engage in other transactions. If
it acquires any conflicting interest relating to any duties concerning the debt securities, however, it must eliminate the conflict or
resign as trustee.
The
holders of a majority in aggregate principal amount of any and all affected series of debt securities of equal ranking then outstanding
will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the trustee
concerning the applicable series of debt securities, provided that the direction:
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would
not conflict with any rule of law or with the relevant indenture;
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would
not be unduly prejudicial to the rights of another holder of the debt securities; and
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would
not involve any trustee in personal liability.
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The
indenture provides that in case an Event of Default shall occur, not be cured and be known to any trustee, the trustee must use the same
degree of care as a prudent person would use in the conduct of his or her own affairs in the exercise of the trustee’s power. The
trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any of the holders
of the debt securities, unless they shall have offered to the trustee security and indemnity satisfactory to the trustee.
No
Individual Liability of Incorporators, Stockholders, Officers or Directors
The
indenture provides that in case an Event of Default shall occur, not be cured and be known to any trustee, the trustee must use the same
degree of care as a prudent person would use in the conduct of his or her own affairs in the exercise of the trustee’s power. The
trustee will be under no obligation to exercise any of its rights or powers under the indenture at the request of any of the holders
of the debt securities, unless they shall have offered to the trustee security and indemnity satisfactory to the trustee.
Governing
Law
The
indenture and the debt securities will be governed by, and construed in accordance with, the laws of the State of New York.
DESCRIPTION
OF WARRANTS
We
may issue warrants for the purchase of Ordinary Shares and/or debt securities in one or more series. We may issue warrants independently
or together with Ordinary Shares and/or debt securities, and the warrants may be attached to or traded separate and apart from these
securities. Each series of warrants will be issued under a warrant agreement all as set forth in the prospectus supplement. A copy of
the form of warrant agreement, including any form of warrant certificates representing the warrants, reflecting the provisions to be
included in the warrant agreements and/or warrant certificates that will be entered into with respect to particular offerings of warrants,
will be furnished to the SEC as an exhibit to a Form 6-K to be incorporated into the registration statement of which this prospectus
constitutes a part prior to the issuance of any warrants.
The
applicable prospectus supplement or term sheet will describe the terms of the warrants offered thereby, any warrant agreement relating
to such warrants and the warrant certificates, including but not limited to the following:
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the
title of the warrants;
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the
offering price or prices of the warrants, if any;
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the
minimum or maximum amount of the warrants which may be exercised at any one time;
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the
currency or currency units in which the offering price, if any, and the exercise price are payable;
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the
number of securities, if any, with which such warrants are being offered and the number of such warrants being offered with each
security;
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the
date, if any, on and after which such warrants and the related securities, if any, will be transferable separately;
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the
amount of securities purchasable upon exercise of each warrant and the price at which the securities may be purchased upon such exercise,
and events or conditions under which the amount of securities may be subject to adjustment;
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the
date on which the right to exercise such warrants shall commence and the date on which such right shall expire;
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the
circumstances, if any, which will cause the warrants to be deemed to be automatically exercised;
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any
material risk factors, if any, relating to such warrants;
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the
identity of any warrant agent; and
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any
other material terms of the warrants.
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Prior
to the exercise of any warrants, holders of such warrants will not have any rights of holders of the securities purchasable upon such
exercise, including the right to receive payments of dividends or the right to vote such underlying securities. Prospective purchasers
of warrants should be aware that material U.S. federal income tax, accounting and other considerations may be applicable to instruments
such as warrants.
DESCRIPTION
OF UNITS
We
may issue units comprised of one or more of the other securities described in this prospectus in any combination. Each unit will be issued
so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights
and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities
included in the unit may not be held or transferred separately, at any time or at any time before a specified date.
The
applicable prospectus supplement may describe:
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the
designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those
securities may be held or transferred separately;
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any
provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and
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any
additional terms of the governing unit agreement.
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The
applicable prospectus supplement will describe the terms of any units. The preceding description and any description of units in the
applicable prospectus supplement does not purport to be complete and is subject to and is qualified in its entirety by reference to the
unit agreement and, if applicable, collateral arrangements and depositary arrangements relating to such units.
PLAN
OF DISTRIBUTION
We,
or the Selling Shareholder, as applicable, may sell the securities offered by this prospectus in any one or more of the following ways
(or in any combination) from time to time:
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directly
to investors, including through privately negotiated transactions, a specific bidding, auction or other process;
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to
investors through agents;
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directly
to agents;
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to
or through underwriters or dealers;
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in
“at the market” offerings, within the meaning of the Rule 415(a)(4) of the Securities Act, to or through a market maker
or into an existing trading market on an exchange or otherwise;
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through
a combination of any such methods of sale; or
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through
any other method permitted by applicable law and described in the applicable prospectus supplement.
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The
accompanying prospectus supplement will set forth the terms of the offering and the method of distribution and will identify any firms
acting as underwriters, dealers or agents in connection with the offering, including:
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the
names and addresses of any underwriters, dealers or agents;
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the
purchase price of the securities and the proceeds to us from the sale, if any;
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any
over-allotment options under which underwriters may purchase additional securities from us;
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any
underwriting discounts and other items constituting compensation to underwriters, dealers or agents;
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any
public offering price, any discounts or concessions allowed or reallowed or paid to dealers; and
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any
securities exchange or market on which the securities offered in the prospectus supplement may be listed.
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If
underwriters are used in the sale, the underwriters will acquire the offered securities for their own account and may resell them from
time to time in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined
at the time of sale. The offered securities may be offered either to the public through underwriting syndicates represented by one or
more managing underwriters or by one or more underwriters without a syndicate. Unless otherwise set forth in a prospectus supplement,
the obligations of the underwriters to purchase any series of securities will be subject to certain conditions precedent and the underwriters
will be obligated to purchase all of such series of securities if any are purchased. Only those underwriters identified in such prospectus
supplement are deemed to be underwriters in connection with the securities offered in the prospectus supplement. Any underwritten offering
may be on a best efforts or a firm commitment basis.
In
connection with the sale of our securities, underwriters or agents may receive compensation (in the form of discounts, concessions or
commissions) from us, the Selling Shareholder, or from purchasers of securities for whom they may act as agents. Underwriters may sell
securities to or through dealers, and such dealers may receive compensation in the form of discounts, concessions or commissions from
the underwriters and/or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate
in the distribution of our securities may be deemed to be “underwriters” as that term is defined in the Securities Act, and
any discounts allowed or commissions paid, and any profit on the resale of the securities they realize may be deemed to be underwriting
discounts and commissions under the Securities Act. Any person who may be deemed to be an underwriter will be identified, and the compensation
received from us or the selling stockholder will be described, in the prospectus supplement. Maximum compensation to any underwriters,
dealers or agents will not exceed any applicable Financial Industry Regulatory Authority limitations.
Underwriters
and agents may be entitled to indemnification by us or the Selling Shareholder against some civil liabilities, including liabilities
under the Securities Act, or to contributions with respect to payments which the underwriters or agents may be required to make relating
to these liabilities. Underwriters and agents may be customers of, engage in transactions with, or perform services for us or the Selling
Shareholder in the ordinary course of business.
Unless
otherwise specified in the related prospectus supplement, each series of securities will be a new issue with no established trading market,
other than Ordinary Shares, which are listed on the NASDAQ Stock Market. Any Ordinary Shares sold pursuant to a prospectus supplement
will be listed on the NASDAQ Stock Market, subject to official notice of issuance. We may elect to list any series of debt securities
on an exchange, but we are not obligated to do so. It is possible that one or more underwriters may make a market in the securities,
but such underwriters will not be obligated to do so and may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of, or the trading market for, any offered securities.
The
aggregate proceeds to us or the Selling Shareholder from the sale of our Ordinary Shares, as applicable, will be the purchase price of
our Ordinary Shares less discounts or commissions, if any. We and the Selling Shareholder reserve the right to accept and, together with
our or its agents from time to time, as applicable, to reject, in whole or in part, any proposed purchase of our Ordinary Shares to be
made directly or through agents. We will not receive any of the proceeds from any offering by the Selling Shareholder.
To
facilitate the offering of the Ordinary Shares offered by us or the Selling Shareholder, certain persons participating in the offering
may engage in transactions that stabilize, maintain or otherwise affect the price of our Ordinary Shares. This may include over-allotments
or short sales, which involve the sale by persons participating in the offering of more shares than were sold to them. In these circumstances,
these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their over-allotment
option, if any. In addition, these persons may stabilize or maintain the price of our Ordinary Shares by bidding for or purchasing shares
in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating in the offering may be reclaimed
if shares sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize
or maintain the market price of our Ordinary Shares at a level above that which might otherwise prevail in the open market. These transactions
may be discontinued at any time.
The
Selling Shareholder may, from time to time, pledge or grant a security interest in some of the Ordinary Shares owned by it and, if the
Selling Shareholder defaults in the performance of its secured obligations, the pledgees or secured parties may offer and sell the Ordinary
Shares, from time to time, under this prospectus, or under an amendment or supplement to this prospectus amending the list of the Selling
Shareholders to include the pledgee, transferee or other successors in interest as the Selling Shareholder under this prospectus. The
Selling Shareholder also may transfer the Ordinary Shares in other circumstances, in which case the transferees, pledgees or other successors
in interest will be the selling beneficial owners for purposes of this prospectus.
The
Selling Shareholder may use this prospectus in connection with resales of the Ordinary Shares. The Selling Shareholder may be deemed
to be an underwriter under the Securities Act in connection with the Ordinary Shares they resell and any profits on the sales may be
deemed to be underwriting discounts and commissions under the Securities Act. Unless otherwise set forth in a prospectus supplement,
the Selling Shareholder will receive all the net proceeds from the resale of the Ordinary Shares sold by it.
The
Selling Shareholder also may in the future resell a portion of the Ordinary Shares in open market transactions in reliance upon Rule
144 under the Securities Act, provided that they meet the criteria and conform to the requirements of that rule, or pursuant to other
available exemptions from the registration requirements of the Securities Act.
EXPENSES
OF ISSUANCE AND DISTRIBUTION
The
following table sets forth the various expenses in connection with the sale and distribution of the securities being registered. We will
bear all of the expenses shown below.
Securities
and Exchange Commission registration fee
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$
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9,766.30
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FINRA
filing fee
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*
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Printing
and engraving expenses
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*
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Legal
fees and expenses
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*
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Accounting
fees and expenses
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15,000
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Transfer
agent fees and expenses
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*
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Miscellaneous
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*
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Total
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$
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*
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*The
amount of securities and number of offerings are indeterminable, and the expenses cannot be estimated at this time.
LEGAL
MATTERS
Except
as otherwise set forth in the applicable prospectus supplement, certain legal matters in connection with the securities offered pursuant
to this prospectus will be passed upon for us by Maples and Calder to the extent governed
by the laws of British Virgin Islands, and by Bevilacqua PLLC to the extent governed by the laws of the State of New York. Legal matters
as to PRC law will be passed upon for us by Guangdong Jindi (Chengdu) Law Firm. Bevilacqua
PLLC may rely upon Maples and Calder with respect to matters governed by British Virgin
Islands law and Guangdong Jindi (Chengdu) Law Firm with respect to matters governed by PRC law. If legal matters in connection with offerings
made pursuant to this prospectus are passed upon by counsel to underwriters, dealers or agents, such counsel will be named in the applicable
prospectus supplement relating to any such offering.
ENFORCEMENT
OF CIVIL LIABILITIES
We
are a BVI company and our principal executive offices are located in China. A majority of our directors and officers reside outside the
United States. In addition, almost all of our assets and the assets of our directors and officers are located outside the United States.
As a result, you may have difficulty serving legal process within the United States upon us or any of these persons. You may also have
difficulty enforcing, both in and outside the United States, judgments you may obtain in the United States courts against us or these
persons in any action, including actions based upon the civil liability provisions of United States federal or state securities laws.
We
have appointed Cogency Global Inc., 10 East 40th Street, 10th Floor, New York, N.Y. 10016, as our agent upon whom process may be served
in any action brought against us under the securities laws of the United States.
Guangdong
Jindi (Chengdu) Law Firm, our counsel as to PRC law, has advised us that the recognition and enforcement of foreign judgments are provided
for under the PRC Civil Procedures Law. PRC courts may recognize and enforce foreign judgments, which do not otherwise violate basic
legal principles, state sovereignty, safety or social public interest of the PRC, in accordance with the requirements of the PRC Civil
Procedures Law based either on treaties between the PRC and the country where the judgment is made or on reciprocity between jurisdictions.
As there currently exists no treaty or other form of reciprocity between the PRC and the United States governing the recognition of judgments,
including those predicated upon the liability provisions of the U.S. federal securities laws, there is uncertainty whether and on what
basis a PRC court would recognize and enforce judgments rendered by U.S. courts.
Maples
and Calder, our counsel as to British Virgin Islands
law, has further advised us that, it is uncertain whether the courts of the BVI would enter judgments in original actions brought in
those courts predicated on United States federal or state securities laws.
EXPERTS
The
consolidated financial statements of Taoping Inc. as of December 31, 2017 and 2016 and for the years ended December 31, 2017 and 2016
included in our Annual Report on Form 20-F for the year ended December 31, 2017 and incorporated by reference herein and in the registration
statement, have been audited by UHY LLP, an independent registered public accounting firm, as set forth in their report thereon, and
incorporated by reference elsewhere herein. Such financial statements are incorporated herein by reference in reliance upon such report
given on the authority of said firm as expert in auditing and accounting.
The
consolidated financial statements of Taoping Inc. for the year ended December 31, 2015 included in our Annual Report on Form 20-F for
the year ended December 31, 2017 and incorporated by reference herein and in the registration statement, have been audited by GHP Horwath,
P.C. (“GHP”), an independent registered public accounting firm, as set forth in their report thereon, and incorporated by
reference elsewhere herein. However, we have been unable to obtain the written consent of GHP with respect to the incorporation by reference
of such financial statements due to the fact that GHP has ceased operations and no longer has the ability to give its consent. Therefore,
we have obtained from the Securities and Exchange Commission a waiver of the requirements to file as an exhibit to the registration statement
of which this prospectus forms a part the written consent of GHP in reliance upon Rule 437 of the Securities Act. As a result, you may
not be able to recover damages from GHP under Section 11 of the Securities Act for any untrue statements of material fact or any omissions
to state a material fact, if any, contained in our aforementioned financial statements.
INDEMNIFICATION
Insofar
as indemnification by us for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling
the company pursuant to provisions of our amended and
restated memorandum and articles of association, or otherwise, we have 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 by such director, officer or controlling person of us 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 offered,
we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
WHERE
YOU CAN FIND MORE INFORMATION
We
have filed with the SEC a registration statement on Form F-3 under the Securities Act with respect to the securities offered hereby.
This prospectus, which constitutes a part of the registration statement, does not contain all of the information set forth in the registration
statement, the exhibits filed therewith or the documents incorporated by reference therein. For further information about us and the
securities offered hereby, reference is made to the registration statement, the exhibits filed therewith and the documents incorporated
by reference therein. Statements contained in this prospectus regarding the contents of any contract or any other document that is filed
as an exhibit to the registration statement are not necessarily complete, and in each instance we refer you to the copy of such contract
or other document filed as an exhibit to the registration statement. We are subject to periodic reporting and other informational requirements
of the Exchange Act as applicable to foreign private issuers. Accordingly, we will be required to file reports, including annual reports
on Form 20-F, and other information with the SEC. As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing
the furnishing and content of proxy statements to shareholders, and Section 16 short swing profit reporting for our officers and directors
and for holders of more than 10% of our ordinary shares.
The
SEC maintains a website that contains reports, proxy and information statements and other information regarding registrants that file
electronically with the SEC. The address of the website is www.sec.gov.
Additionally,
we make these filings available, free of charge, on our website at www.taop.com as soon as reasonably practicable after we electronically
file such materials with, or furnish them to, the SEC. The information on our website, other than these filings, is not, and should not
be, considered part of this prospectus and is not incorporated by reference into this document.
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
The
SEC allows us to “incorporate by reference” into this prospectus the information that we have filed with the SEC, which means
that we can disclose important information to you by referring you to those documents. Any information that we file subsequently with
the SEC will automatically update this prospectus. We incorporate by reference into this prospectus the information contained in the
documents listed below, which is considered to be a part of this prospectus:
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The
Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2017, filed with the Commission on March 30, 2018;
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Our
Current Reports on Form 6-K dated November 14, 2018 and November 21, 2018;
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The
description of the Company’s Ordinary Shares contained in the Form 8-K12B, filed with the Commission on October 31, 2012, a`nd
any further amendment or report filed hereafter for the purpose of updating such description; and
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With
respect to each offering of the securities under this prospectus, all subsequent reports on Form 20-F and any report on Form 6-K
that so indicates it (or any applicable portions thereof) is being incorporated by reference that we file with or furnish to the
SEC on or after the date hereof and until the termination or completion of the offering by means of this prospectus.
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Any
reports filed by us with the SEC after the date of this prospectus and before the date that the offering of securities by means of this
prospectus is terminated will automatically update and, where applicable, supersede any information contained in this prospectus or incorporated
by reference in this prospectus. This means that you must look at all of the SEC filings that we incorporate by reference to determine
if any of the statements in this prospectus or in any documents incorporated by reference have been modified or superseded. Unless expressly
incorporated by reference, nothing in this prospectus shall be deemed to incorporate by reference information furnished to, but not filed
with, the SEC.
We
will provide without charge to any person (including any beneficial owner) to whom this prospectus is delivered, upon oral or written
request, a copy of any document incorporated by reference in this prospectus but not delivered with the prospectus (except for exhibits
to those documents unless a documents states that one of its exhibits is incorporated into the document itself). Such request should
be directed to: Taoping Inc.., 21st Floor, Everbright Bank Building, Zhuzilin, Futian District, Shenzhen, Guangdong 518040, People’s
Republic of China, telephone number (+86)755-8370-8333.
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