UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO
RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For
the month of December 2023
Commission File Number: 001-38146
ZK
INTERNATIONAL GROUP CO., LTD.
(Translation
of registrant’s name into English)
c/o Zhejiang Zhengkang Industrial Co., Ltd.
No. 678 Dingxiang Road, Binhai Industrial
Park
Economic & Technology Development Zone
Wenzhou, Zhejiang Province
People’s Republic of China 325025
Tel: +86-577-86852999
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
On November 27, 2023, ZK International Group
Co., Ltd. (the “Company”) entered into a securities purchase agreement (the “Agreement”) with an investor
(the “Investor”), pursuant to which the Investor agreed to purchase and the Company agreed to issue and sell US$5 million
of ordinary shares of the Company (the “Private Placement”). The Private Placement shall be completed in three subscriptions
with the initial subscription in the amount of US$1.5 million (the “Initial Subscription Amount”) to be paid within three
business days from the date of the Agreement (the “Initial Subscription Date”), the second subscription in the amount of not
less than US$2 million and up to $3.5 million (the “Second Subscription Amount”) to be paid on or before the 60th day from
the Initial Subscription Date (the “Second Subscription Date”), and the third subscription in the amount equal to $5,000,000
minus the aggregate amount of the Initial Subscription Amount and Second Subscription Amount (the “Third Subscription Amount”)
to be paid on or before the 60th day from the Second Subscription Date (the “Third Subscription Date”). The Company agreed
to issue, upon receiving the Initial Subscription Amount, the Second Subscription Amount and the Third Subscription Date, such number
of ordinary shares that equal the sum of (i) the Initial Subscription Amount divided by $1.70, which is 185% of the higher of (x) the
closing bid price as of the trading day immediately prior to the date of the Agreement (the “Initial Bid Price”) and (y) the
average closing bid price during the five trading days immediately prior to the date of the Agreement, (ii) the Second Subscription
Amount divided by 175% of the higher of (x) the Initial Bid Price, (y) the closing bid price as of the trading day immediately
prior to the Second Subscription Date, and (z) the average closing bid price during the five trading days immediately prior to the
Second Subscription Date, and (iii) the Third Subscription Amount divided by 165% of the higher of (x) the Initial Bid Price,
(y) the closing bid price as of the trading day immediately prior to the Third Closing Date, and (z) the average closing bid
price during the five trading days immediately prior to the Third Subscription Date. The Private Placement was exempted from the registration
requirements of the Securities Act of 1933, as amended (the “Securities Act” pursuant to Regulation S under the Securities
Act.
The Private Placement was facilitated by Univest
Securities, LLC. Univest Securities, LLC shall receive a commission equal to the lower of (i) four-point five percent (4.5%) of the
aggregate gross proceeds raised in the Private Placement to be paid at the closing of the Private Placement, or (ii) US$150,000.
A
copy of the form of the Agreement is filed as Exhibit 10.1 to this Report on Form 6-K
and is incorporated herein by reference. The foregoing description of the terms of the Agreement does
not purport to be complete descriptions of the rights and obligations thereunder and are qualified in its entirety by reference to such
exhibit.
On November 29, 2023, the Company published
a press release titled “ZK International Group Co., Ltd. and The CF Opportunity Fund Commits $5 Million Investment with the
First Subscription Priced at $1.70 per Share”. A copy of the press release is furnished as Exhibit 99.1 to this Report on Form 6-K
and is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: December 1, 2023 |
ZK INTERNATIONAL GROUP CO., LTD. |
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By: |
/s/ Jiancong Huang |
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Name: |
Jiancong Huang |
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Title: |
Chief Executive Officer and Chairman of the Board |
Exhibit 10.1
SECURITIES
PURCHASE AGREEMENT
This Securities Purchase Agreement
(this “Agreement”) is dated as of November 27, 2023, between ZK International Group Co., Ltd., a business
company incorporated under the laws of the British Virgin Islands, or the BVI (the “Company”), and the purchaser identified
on the signature page hereto (the “Purchaser”).
WHEREAS, subject to the terms
and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to the Purchaser, and the Purchaser desires
to purchase from the Company, securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and the Purchaser agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions.
In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings
set forth in this Section 1.1:
“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.5.
“Action”
shall have the meaning ascribed to such term in Section 3.1(i).
“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control
with a Person as such terms are used in and construed under Rule 405 under the Securities Act.
“Applicable
Laws” shall have the meaning ascribed to such term in Section 3.1(k).
“Authorizations”
shall have the meaning ascribed to such term in Section 3.1(k).
“Board
of Directors” means the board of directors of the Company.
“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day
on which the Federal Reserve Bank of New York are authorized or required by law or other governmental action to close; provided, however,
for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”,
“shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any
physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for
wire transfers) of commercial banks in The City of New York are generally open for use by customers on such day.
“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.4.
“Closing
Date” means the date mutually agreed upon by the Company and the Purchaser, which shall be within ten (10) Business Days
after the final Subscription Date herein.
“Commission”
means the United States Securities and Exchange Commission.
“Disclosure
Time” means, (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City
time) and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately
following the date hereof, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York
City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof.
“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.
“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).
“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
“Initial
Bid Price” means the closing bid price as of the Trading Day immediately prior to the date of this Agreement.
“Initial
Subscription Date” shall have the meaning ascribed to such term in Section 2.1.
“Initial
Subscription Shares” means the number of Ordinary Shares equal the Purchaser’s Initial Subscription Amount divided by
the Initial Per Share Purchase Price.
“Initial
Per Share Purchase Price” equals 185% of the higher of (i) the Initial Bid Price or (ii) the average closing bid price
during the five Trading Days immediately prior to the date of this Agreement, subject to adjustment for reverse and forward share splits,
share dividends, share combinations and other similar transactions with respect to the Ordinary Shares that occur after the date of this
Agreement.
“Initial
Subscription Amount” means $1,500,000, the amount to be paid as specified below the Purchaser’s name on the signature
page of this Agreement and next to the heading “Initial Subscription Amount,” in United States dollars and in immediately
available funds.
“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(m).
“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Ordinary
Shares” means the ordinary shares of the Company, with no par value, and any other class of securities into which such securities
may hereafter be reclassified or changed.
“Ordinary
Shares Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire
at any time Ordinary Shares, including, without limitation, any debt, preference shares, right, option, warrant or other instrument that
is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Ordinary Shares.
“Per Share
Purchase Price” means any of the Initial Per Share Purchase Price, the Second Per Share Purchase Price, or the Third Per Share
Purchase Price, as applicable.
“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company,
joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Placement
Agent” means Univest Securities, LLC.
“Placement
Agent Engagement Letter” means the engagement letter by and between the Company and the Placement Agent dated [ ].
“PRC Subsidiaries”
means the Subsidiaries that are established under the laws of the People’s Republic of China.
“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.
“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.8.
“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from
time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect
as such Rule.
“SEC Reports”
shall have the meaning ascribed to such term in Section 3.1(h).
“Second
Subscription Date” shall have the meaning ascribed to such term in Section 2.2.
“Second
Subscription Shares” means the number of Ordinary Shares equal the Purchaser’s Second Subscription Amount divided by
the Second Per Share Purchase Price.
“Second
Per Share Purchase Price” equals 175% of the higher of (i) the Initial Bid Price, (ii) the closing bid price as of
the Trading Day immediately prior to the Second Subscription Date or (ii) the average closing bid price during the five Trading Days
immediately prior to the Second Subscription Date, subject to adjustment for reverse and forward share splits, share dividends, share
combinations and other similar transactions with respect to the Ordinary Shares that occur after the date of this Agreement.
“Second
Subscription Amount” means at least $2,000,000 and up to $3,500,000 (as determined in Purchaser’s sole discretion) to
be paid by the Purchaser in United States dollars and in immediately available funds.
“Securities”
means the Initial Subscription Shares, the Second Subscription Shares and the Third Subscription Shares issued or issuable to the Purchaser
pursuant to this Agreement.
“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not
be deemed to include locating and/or borrowing Ordinary Shares).
“Subsidiary”
means any subsidiary of the Company as set forth in the SEC Reports, and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.
“Third
Subscription Date” shall have the meaning ascribed to such term in Section 2.3.
“Third
Subscription Shares” means the number of Ordinary Shares equal the Purchaser’s Third Subscription Amount divided by the
Third Per Share Purchase Price.
“Third
Per Share Purchase Price” equals 165% of the higher of (i) the Initial Bid Price, (ii) the closing bid price as of
the Trading Day immediately prior to the Third Subscription Date or (iii) the average closing bid price during the five Trading Days
immediately prior to the Third Subscription Date, subject to adjustment for reverse and forward share splits, share dividends, share combinations
and other similar transactions with respect to the Ordinary Shares that occur after the date of this Agreement.
“Third
Subscription Amount” means an amount equal to $5,000,000 minus the aggregate amount of the Initial Subscription Amount and Second
Subscription Amount, to be paid by the Purchaser in United States dollars and in immediately available funds.
“Trading
Day” means a day on which the principal Trading Market is open for trading.
“Trading
Market” means any of the following markets or exchanges on which the Ordinary Shares are listed or quoted for trading on the
date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York
Stock Exchange, the OTCQX, the OTCQB or the Pink Market (or any successors to any of the foregoing).
“Transaction
Documents” means this Agreement and the Placement Agent Engagement Letter, all exhibits and schedules hereto and thereto, and
any other documents or agreements executed in connection with the transactions contemplated hereunder.
“Transfer
Agent” means Securities Transfer Corporation, the current transfer agent of the Company, with a mailing address of 2901 N Dallas
Parkway, Suite 380, Plano, Texas 75093, and any successor transfer agent of the Company.
ARTICLE II
PURCHASE AND SALE
2.1 Initial
Subscription. Subject to Section 2.5 hereto, within three (3) Business Days from the date of the Agreement, the Purchaser
shall deliver to the Company, via wire transfer (in accordance with the instructions attached hereto, the “Wire Instructions”),
immediately available funds equal to the Initial Subscription Amount. Such date of delivery shall be the “Initial Subscription
Date”.
2.2 Second
Subscription. On or before the 60th day from the Initial Subscription Date, the Purchaser shall deliver to the Company, via wire transfer
(in accordance with the Wire Instructions), immediately available funds equal to the Second Subscription Amount. Such date of delivery
shall be the “Second Subscription Date”.
2.3 Third
Subscription. On or before the 60th day from the Second Subscription Date, the Purchaser shall deliver to the Company,
via wire transfer (in accordance with the Wire Instructions), immediately available funds equal to the Third Subscription Amount. Such
date of delivery shall be the “Third Subscription Date”.
2.4 Closing.
Upon satisfaction of the covenants and conditions set forth in Sections 2.5 the Closing shall occur at such other location as the parties
shall mutually agree or virtually in accordance with the provisions of this Agreement. On the Closing Date, the Company shall deliver
to the Purchaser the Securities against prior payment of the Initial Subscription Amount, the Second Subscription Amount and the Third
Subscription Amount, as applicable, and the Company and the Purchaser shall exchange and deliver the other items set forth in Section 2.5.
For avoidance of doubt, in the event that the Purchaser fails to deliver any of the Initial Subscription Amount, the Second Subscription
Amount or the Third Subscription Amount, the Company shall not be obligated to issue any Securities to the Purchaser. In the event of
Purchaser’s breach of this Agreement, the Company reserves the right to enforce this Agreement against the Purchaser, including,
but not limited to, the right to collect the Initial Subscription Amount, Second Subscription Amount, Third Subscription Amount and any
other amounts due from the Purchaser under this Agreement.
2.5 Deliveries;
Subscription and Closing Conditions.
(a) On
the Closing Date, the Company shall deliver or cause to be delivered to the Purchaser and the Placement Agent the following:
(i) a
copy of the instructions to the Transfer Agent instructing the Transfer Agent to issue the Securities, registered in the name of the Purchaser.
(b) On
or prior to the Closing Date, the Purchaser shall deliver or cause to be delivered to the Company, the following:
(i) this
Agreement duly executed by the Purchaser; and
(ii) the
Purchaser’s Initial Subscription Amount, Second Subscription Amount and Third Subscription Amount by wire transfer in accordance
with the Wire Instructions.
(c) The
obligation of the Purchaser to deliver the Initial Subscription Amount, the Second Subscription Amount and the Third Subscription Amount
is subject to the following conditions being met by the Company as of the Initial Subscription Date, the Second Subscription Date and
the Third Subscription Date, as applicable:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) when made and on the applicable subscription date of the representations and warranties of the Company contained herein
(unless as of a specific date therein in which case they shall be accurate in all material respects, or to the extent representations
and warranties are qualified by materiality or Material Adverse Effect, in all respects as of such date);
(ii) there
shall have been no Material Adverse Effect with respect to the Company since the date hereof;
(iii) all
obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iv) the
delivery by the Company of the items set forth in Section 2.5(a) of this Agreement; and
(v) from
the date hereof to the Initial Subscription Date, the Second Subscription Date or the Third Subscription Date, as applicable, trading
in the Ordinary Shares shall not have been suspended by the Commission or the Company’s principal Trading Market, and, at any time
prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or
minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor
shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred
any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or
any material adverse change in, any financial market which, in each case, in the reasonable judgment of the Purchaser, makes it impracticable
or inadvisable to purchase the Securities at the Closing.
(d) The
obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the
accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect,
in all respects) on the Closing Date of the representations and warranties of the Purchaser contained herein (unless as of a specific
date therein in which case they shall be accurate as of such date); and
(ii) all
obligations, covenants and agreements of the Purchaser required to be performed at or prior to the Closing Date shall have been performed;
and
(iii) the
delivery by the Purchaser of the Initial Subscription Amount, Second Subscription Amount and Third Subscription Amount.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations
and Warranties of the Company. Subject to any exceptions disclosed in the SEC Reports, the Company hereby makes the following representations
and warranties to the Purchaser as of the date hereof and as of the Initial Subscription Date, the Second Subscription Date, the Third
Subscription Date and the Closing Date (unless made as of a specific date therein, in which case they shall be accurate as of such date):
(a) Subsidiaries.
All of the direct and indirect Subsidiaries of the Company are set forth in the SEC Reports. The Company owns or controls, directly or
indirectly, the percentage of the capital stock or other equity interests disclosed in the SEC Reports of each Subsidiary of the Company
free and clear of any Liens.
(b) Organization
and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to
own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in
violation or default of any of the provisions of its respective certificate or articles of incorporation, memorandum and articles of association,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and
is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could
not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any
Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial
or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability
to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a
“Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing
or seeking to revoke, limit or curtail such power and authority or qualification.
(c) Authorization;
Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated
by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The
execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further
action is required by the Company, the Board of Directors, a committee of the Board of Directors or the Company’s shareholders in
connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document
to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with
the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance
with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium
and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating
to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and
contribution provisions may be limited by applicable law.
(d) No
Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it
is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do
not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles
of incorporation, memorandum and articles of association, bylaws or other organizational or charter documents, or (ii) conflict with,
or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of
any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment,
anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company
or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject
to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or
other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state
securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the
case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
(e) Filings,
Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to,
or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection
with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant
to Section 4.4 of this Agreement, and (ii) the submission of a notification with the Trading Market and such other filings as
are required to be made under applicable state securities laws (collectively, the “Required Approvals”).
(f) Issuance
of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company.
(g) Capitalization.
The capitalization of the Company as of the date hereof is as set forth in the SEC Reports shall also include the number of Ordinary Shares
owned beneficially, and of record, by Affiliates of the Company as of the date hereof. No Person has any right of first refusal, preemptive
right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents, except
as set forth in the SEC Reports. None of the Securities will be subject to the preemptive rights of any holders of any security of the
Company or similar contractual rights granted by the Company. The issuance and sale of the Securities will not obligate the Company or
any Subsidiary to issue Ordinary Shares or other securities to any Person (other than the Purchaser). All of the outstanding shares of
capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights
to subscribe for or purchase securities. No further approval or authorization of any shareholder, the Board of Directors or others is
required for the issuance and sale of the Securities.
(h) SEC
Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be
filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the three years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material)
(the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred
to herein as the “SEC Reports”) on a timely basis (including any valid extension of such time of filing provided under
Rule 12b-25 or under coronavirus-related relief by the SEC) and has filed any such SEC Reports prior to the expiration of any such
extension. The Company is not and has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements
of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements
may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and
its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
(i) Litigation.
Except as set forth in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or,
to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before
or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign)
(collectively, an “Action”). None of the Actions set forth in the SEC Reports, (i) adversely affects or challenges
the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable
decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director
or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities
laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or threatened,
any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission
has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary
under the Exchange Act or the Securities Act.
(j) Compliance.
Neither the Company nor any of its PRC Subsidiaries: (i) is in default under or in violation of (and no event has occurred that has
not been waived that, with notice or lapse of time or both, would result in a default by the Company or any of its PRC Subsidiaries under),
nor has the Company or any of its PRC Subsidiaries received notice of a claim that it is in default under or that it is in violation of,
any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties
is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any
court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation
of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could
not have or reasonably be expected to result in a Material Adverse Effect.
(k) Regulatory
Permits. The Company and its PRC Subsidiaries possess all certificates, licenses, authorizations approvals, clearances, consents,
registration and permits issued by the appropriate federal, state, local or foreign regulatory authorities applicable to the Company (“Applicable
Laws”) necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess
such permits could not reasonably be expected to result in a Material Adverse Effect (each, an “Authorization”), and
neither the Company nor any of its PRC Subsidiaries has received any notice of proceedings relating to the revocation or modification
of any Authorization or the noncompliance with any ordinance, law, rule or regulation applicable to the Company. The Company has
not received notice of any claim, action, suit, proceeding, hearing, enforcement, investigation, arbitration or other action from any
governmental authority or body or third party alleging that any product, operation or activity is in violation of any Applicable Laws
or Authorizations or has any knowledge that any such entity or third party is considering any such claim, litigation, arbitration, action,
suit, investigation or proceeding, nor, to the Company’s knowledge, has there been any material noncompliance with or violation
of any Applicable Laws by the Company that could reasonably be expected to require the issuance of any such communication or result in
an investigation, corrective action, or enforcement action by any governmental body or entity.
(l) Title
to Assets. The Company and its PRC Subsidiaries have good and marketable title to all real property owned by them and good and marketable
title in all personal property owned by them that is material to the business of the Company and its PRC Subsidiaries, in each case free
and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere
with the use made and proposed to be made of such property by the Company and its PRC Subsidiaries and (ii) Liens for the payment
of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which
is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and its PRC Subsidiaries
are held by them under valid, subsisting and enforceable leases with which the Company and its PRC Subsidiaries are in compliance.
(m) Intellectual
Property. The Company and its PRC Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar
rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure
to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Neither the Company
nor any of its PRC Subsidiaries has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired,
terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement
except where such action would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any of its PRC Subsidiaries
has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or
otherwise has any knowledge that the Intellectual Property Rights or any of the Company’s products or planned products as described
in the SEC Reports violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a
Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing
infringement by another Person of any of the Intellectual Property Rights. The Company and its PRC Subsidiaries have taken reasonable
security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do
so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(n) Certain
Fees. Other than the compensation payable to the Placement Agent pursuant to the terms of the Placement Agent Engagement Letter, no
brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor
or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction
Documents (for the avoidance of doubt, the foregoing shall not include any fees and/or commissions owed to the Transfer Agent). Other
than for Persons engaged by the Purchaser, if any, the Purchaser shall have no obligation with respect to any fees or with respect to
any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with
the transactions contemplated by the Transaction Documents.
(o) Private
Placement. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchaser as contemplated hereby.
The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.
(p) Investment
Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be
or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company
shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the
Investment Company Act of 1940, as amended.
(q) Registration
Rights. No Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any
securities of the Company or any Subsidiary.
(r) Listing
and Maintenance Requirements. The Ordinary Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange
Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Ordinary Shares under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating
such registration. Except as set forth in the SEC Reports, that the Company received written notifications from the Nasdaq Stock Market
LLC (the “Nasdaq”) on October 13, 2022, April 12, 2023 and November 6, 2023, respectively, notifying that the
Company was not in compliance with the minimum bid price requirement set forth in the Listing Rules for continued listing on the
Nasdaq (the “Minimum Bid Price Requirement”), and is eligible to regain compliance with the Minimum Bid Price Requirement
until January 31, 2024, the Company is, and has no other reason to believe that it will not in the foreseeable future continue to
be, in compliance with all such listing and maintenance requirements. The Ordinary Shares are currently eligible for electronic transfer
through The Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to
The Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.
(s) Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms
that neither it nor any other Person acting on its behalf has provided the Purchaser or any of its agents or counsel with any information
that it believes constitutes material, non-public information which is not otherwise disclosed in the SEC Reports. The Company understands
and confirms that the Purchaser will rely on the foregoing representation in effecting transactions in securities of the Company. All
of the disclosure furnished by or on behalf of the Company to the Purchaser regarding the Company and its Subsidiaries, their respective
businesses and the transactions contemplated hereby, is true and correct and does not contain any untrue statement of a material fact
or omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which
they were made, not misleading. The Company acknowledges and agrees that Purchaser does not make or have made any representations or warranty
with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.
(t) No
Integrated Offering. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers
or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities
to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market
on which any of the securities of the Company are listed or designated.
(u) Tax
Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material
Adverse Effect, the Company and its PRC Subsidiaries each (i) has made or filed all federal, state and local income and all foreign
income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all
taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports
and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods
subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any PRC Subsidiary know of no basis for any
such claim. The term “taxes” mean all federal, state, local, foreign, and other net income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments, or charges of any
kind whatsoever, together with any interest and any penalties, additions to tax, or additional amounts with respect thereto. The term
“returns” means all returns, declarations, reports, statements, and other documents required to be filed in respect to taxes.
(v) No
General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchaser and
certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.
(w) Foreign
Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other
person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment
to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds,
(iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf
of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA.
(x) Accountants.
To the knowledge and belief of the Company, the Company’s accounting firm as set forth in the SEC Reports (i) is a registered
public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements
to be included in the Company’s Annual Report for the fiscal year ending September 30, 2023.
(y) Acknowledgment
Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that the Purchaser is acting solely in the
capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company
further acknowledges that Purchaser is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with
respect to the Transaction Documents and the transactions contemplated thereby and any advice given by the Purchaser or any of its respective
representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental
to the Purchaser’s purchase of the Securities. The Company further represents to the Purchaser that the Company’s decision
to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions
contemplated hereby by the Company and its representatives.
(z) Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any
action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the
sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any
of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities
of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the
placement of the Securities.
(aa) Share
Incentive Plans. Each Ordinary Share issued by the Company under the Company’s share incentive plans was issued in accordance
with the terms of the Company’s share incentive plans. Each share option granted by the Company under the Company’s share
incentive plans was granted (i) in accordance with the terms of the Company’s share incentive plans and (ii) with an exercise
price at least equal to the fair market value of the Ordinary Shares on the date such share option would be considered granted under GAAP
and applicable law. No Ordinary Share or share option issued or granted under the Company’s share incentive plans has been backdated.
The Company has not knowingly issued or granted, and there is no and has been no Company policy or practice to knowingly issue or grant,
Ordinary Shares or share options prior to, or otherwise knowingly coordinate the issuance of Ordinary Shares or grant of share options
with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results
or prospects.
(bb) Office
of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent,
employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign
Assets Control of the U.S. Treasury Department (“OFAC”).
(cc) U.S.
Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning
of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Purchaser’s request.
(dd) Bank
Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956,
as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal
Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent
(5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or
Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to
regulation by the Federal Reserve.
(ee) Money
Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable
financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable
money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”),
and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or
any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
(ff) No
Disqualification Events. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506 under the Securities
Act, none of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company
participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities,
calculated on the basis of voting power, nor any promoter (as that term is defined under Rule 405 of the Securities Act) connected
with the Company in any capacity at the same of sale (each, an “Issuer Covered Person” and, together, “Issuer
Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to
(viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or
(d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event.
The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has furnished to the Purchaser
a copy of any disclosures provided thereunder.
(gg) Other
Covered Persons. Other than the Placement Agent, the Company is not aware of any person (other than any Issuer Covered Person) that
has been or will be paid (directly or indirectly) remuneration for solicitation of purchasers in connection with the sale of any Securities.
(hh) Notice
of Disqualification Events. The Company will notify the Purchaser and the Placement Agent in writing, prior to each Closing Date of
(i) any Disqualification Event relating to any Issuer Covered Person and (ii) any event that would, with the passage of time,
become a Disqualification Event relating to any Issuer Covered Person.
The Purchaser acknowledges
and agrees that the representations contained in this Section 3.1 shall not modify, amend or affect the Company’s right to
rely on the Purchaser’s representations and warranties contained in this Agreement or any representations and warranties contained
in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the
consummation of the transactions contemplated hereby.
3.2 Representations
and Warranties of the Purchaser. The Purchaser hereby represents and warrants as of the date hereof and as of the Closing Date
to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):
(a) Organization;
Authority. The Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under
the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership limited liability company or similar
power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry
out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by the Purchaser
of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited
liability company or similar action, as applicable, on the part of the Purchaser. Each Transaction Document to which it is a party has
been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid
and legally binding obligation of the Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general
equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting
enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable
law.
(b) Own
Account. The Purchaser understands that the Securities are “restricted securities” and have not been registered under
the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with
a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state
securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state
securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution
of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting
the Purchaser’s right to sell the Securities pursuant to any registration statement or otherwise in compliance with applicable federal
and state securities laws). The Purchaser is acquiring the Securities hereunder in the ordinary course of its business.
(c) Purchaser
Status. At the time the Purchaser was offered the Securities, it was, and as of the date hereof it is, either: (i) an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act, (ii) a “qualified
institutional buyer” as defined in Rule 144A(a) under the Securities Act, or (iii) a non “U.S. Person”
within the meaning of Regulation S under the Securities Act. The Purchaser hereby represents that neither the Purchaser not any of its
Rule 506(d) Related Parties (as defined below) is a “bad actor” within the meaning of Rule 506(d) promulgated
under the Securities Act. For purpose of this Agreement, “Rule 506(d) Related Party” shall mean a person or entity
covered by the “Bad Actor disqualification” provision of Rule 506(d) of the Securities Act.
(d) Experience
of The Purchaser. The Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience
in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities,
and has so evaluated the merits and risks of such investment. The Purchaser is able to bear the economic risk of an investment in the
Securities and, at the present time, is able to afford a complete loss of such investment.
(e) General
Solicitation. The Purchaser is not, to the Purchaser’s knowledge, purchasing the Securities as a result of any advertisement,
article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or, to the knowledge of the Purchaser, any other general solicitation or general advertisement.
(f) Access
to Information. The Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits
and schedules thereto) and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary
of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities
and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition,
results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that
is necessary to make an informed investment decision with respect to the investment. The Purchaser acknowledges and agrees that neither
the Placement Agent nor any Affiliate of the Placement Agent has provided the Purchaser with any information or advice with respect to
the Securities nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes
any representation as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public
information with respect to the Company which the Purchaser agrees need not be provided to it. In connection with the issuance of the
Securities to the Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to the
Purchaser.
(g) Certain
Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, the Purchaser has not, nor has
any Person acting on behalf of or pursuant to any understanding with the Purchaser, directly or indirectly executed any purchases or sales,
including short sales, of the securities of the Company during the period commencing as of the time that the Purchaser first received
a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material pricing terms
of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the
case that the Purchaser is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of the Purchaser’s
assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions
of the Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by
the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons
party to this Agreement or to the Purchaser’s representatives, including, without limitation, its officers, directors, partners,
legal and other advisors, employees, agents and Affiliates, the Purchaser has maintained the confidentiality of all disclosures made to
it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for the
avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating
or borrowing shares in order to effect short sales or similar transactions in the future.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 Transfer
Restrictions.
(a) The
Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities
other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of the Purchaser or in
connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company
an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall
be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities
under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement
and shall have the rights and obligations of the Purchaser under this Agreement.
(b) The Purchaser
agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in substantially the following
form:
THIS SECURITY HAS NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION
THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
The Company acknowledges
and agrees that the Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or
grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as
defined in Rule 501(a) under the Securities Act and, if required under the terms of such arrangement, the Purchaser may transfer
pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company
and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no
notice shall be required of such pledge. At the Purchaser’s expense, the Company will execute and deliver such reasonable documentation
as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities.
(c) Certificates
evidencing Securities shall not contain any legend (including the legend set forth in Section 4.1(b) hereof), (i) while
a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities
Act, (ii) following any sale of such Securities pursuant to Rule 144 and the Company is then in compliance with the current
public information required under Rule 144, (iii) if such Securities are eligible for sale or may be sold under Rule 144
without volume or manner-of-sale restrictions, or (iv) if such legend is not required under applicable requirements of the Securities
Act (including judicial interpretations and pronouncements issued by the staff of the Commission).
(d) The Purchaser
agrees with the Company that the Purchaser will sell any Securities pursuant to either the registration requirements of the Securities
Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold pursuant to
a registration statement, they will be sold in compliance with the plan of distribution set forth therein, and acknowledges that the removal
of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company’s
reliance upon this understanding.
4.2 Furnishing
of Information. For a period of six months after the Initial Closing, the Company covenants to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date
hereof pursuant to the Exchange Act.
4.3 Integration.
The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2
of the Securities Act) that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations
of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder
approval is obtained before the closing of such subsequent transaction.
4.4 Securities
Laws Disclosure; Publicity. The Company shall file a Report of Foreign Private Issuer on Form 6-K, including the Transaction
Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press
release, the Company represents to the Purchaser that it shall have publicly disclosed all material, non-public information delivered
to the Purchaser by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees, Affiliates or agents
in connection with the transactions contemplated by the Transaction Documents, including, without limitation, the Placement Agent. The
Company and the Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated
hereby, and neither the Company nor the Purchaser shall issue any such press release nor otherwise make any such public statement without
the prior consent of the Company, with respect to any press release of the Purchaser, or without the prior consent of the Purchaser, with
respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is
required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement
or communication.
4.5 Shareholder
Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that the Purchaser
is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that the Purchaser
could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents
or under any other agreement between the Company and the Purchaser.
4.6 Non-Public
Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on
its behalf will provide the Purchaser or its agents or counsel with any information that the Company believes constitutes, material non-public
information, unless prior thereto the Purchaser shall have consented to the receipt of such information and agreed with the Company to
keep such information confidential. The Company understands and confirms that the Purchaser shall be relying on the foregoing covenant
in effecting transactions in securities of the Company. To the extent that the Company delivers any material, non-public information to
the Purchaser without the Purchaser’s consent, the Company hereby covenants and agrees that the Purchaser shall not have any duty
of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates,
or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not
to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to applicable law. To
the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding
the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Form 6-K. The
Company understands and confirms that the Purchaser shall be relying on the foregoing covenant in effecting transactions in securities
of the Company.
4.7 Use
of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes
and general business purposes and shall not use such proceeds: (a) for the redemption of any Ordinary Shares or Ordinary Shares Equivalents,
(b) for the settlement of any outstanding litigation or (c) in violation of FCPA or OFAC regulations.
4.8 Indemnification
of Purchaser. Subject to the provisions of this Section 4.8, the Company will indemnify and hold the Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person
holding such titles notwithstanding a lack of such title or any other title), the Person who controls the Purchaser (within the meaning
of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents,
members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding
a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any
and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur
as a result of or relating to (a) any material breach of any of the representations, warranties, covenants or agreements made by
the Company in this Agreement or in the other Transaction Documents, or (b) any action instituted against the Purchaser Parties in
any capacity, or any of them or their respective Affiliates, by any shareholder of the Company who is not an Affiliate of such Purchaser
Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is solely based upon a material
breach of such Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings
such Purchaser Party may have with any such shareholder or any violations by such Purchaser Party of state or federal securities laws
or any conduct by such Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct),
respectively, the Company will indemnify each Purchaser Party, to the extent permitted by applicable law, from and against any and all
losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses, as incurred,
arising out of or relating to (i) any untrue or alleged untrue statement of a material fact contained in such registration statement,
any prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of
or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein
(in the case of any prospectus or supplement thereto, in the light of the circumstances under which they were made) not misleading, except
to the extent, but only to the extent, that such untrue statements or omissions are based solely upon information regarding such Purchaser
Party furnished in writing to the Company by such Purchaser Party expressly for use therein, or (ii) any violation or alleged violation
by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder in connection
therewith. If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement,
such Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof
with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of
such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing,
(ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such
action there is, in the reasonable opinion of counsel, a material conflict on any material issue between the position of the Company and
the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than
one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (x) for any settlement by a
Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (y) to
the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any
of the representations, warranties, covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction
Documents. The indemnification required by this Section 4.8 shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in
addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company
may be subject to pursuant to law.
4.9 Listing
of Ordinary Shares. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Ordinary Shares on the
Trading Market on which it is currently listed. The Company will then take all action reasonably necessary to continue the listing and
trading of its Ordinary Shares on a Trading Market and will comply in all respects with the Company’s reporting, filing and other
obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Ordinary Shares
for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation,
by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic
transfer.
4.10 Certain
Transactions and Confidentiality. The Purchaser covenants that neither it nor any Affiliate acting on its behalf or pursuant to any
understanding with it will execute any purchases or sales, including short sales of any of the Company’s securities during the period
commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first
publicly announced pursuant to the initial press release as described in Section 4.4. The Purchaser covenants that until such time
as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described
in Section 4.4, the Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information
included in this Agreement. Notwithstanding the foregoing, and notwithstanding anything contained in this Agreement to the contrary, the
Company expressly acknowledges and agrees that (i) Purchaser does not make any representation, warranty or covenant hereby that it
will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement
are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) Purchaser shall not be
restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws
from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press
release as described in Section 4.4 and (iii) Purchaser shall not have any duty of confidentiality or duty not to trade in the
securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.4.
Notwithstanding the foregoing, in the case that the Purchaser is a multi-managed investment vehicle whereby separate portfolio managers
manage separate portions of the Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of the Purchaser’s assets, the covenant set forth above shall only apply
with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered
by this Agreement.
4.11 Acknowledgment
of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding Ordinary Shares,
which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under the Transaction
Documents are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the
effect of any such dilution or any claim the Company may have against the Purchaser and regardless of the dilutive effect that such issuance
may have on the ownership of the other shareholders of the Company.
ARTICLE V
MISCELLANEOUS
5.1 Fees
and Expenses. At the Closing, the Company has agreed to pay the Placement Agent a fee equal to the lower of (i) four-point five
percent (4.5%) of the aggregate gross proceeds raised in the Offering to be paid at the Closing of the Offering, and (ii) US$150,000
in connection with the transaction contemplated by the Transaction Documents. Except as expressly set forth in the Transaction Documents
to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other
expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company
shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter
delivered by the Company), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchaser.
5.2 Entire
Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties
with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.3 Notices.
Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall
be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via
facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at
or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such
notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the
signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading
Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier
service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications
shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction
Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously
file such notice with the Commission pursuant to a Form 6-K.
5.4 Amendments;
Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed by
the Company and the Purchaser. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall
be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise
of any such right..
5.5 Headings.
The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any
of the provisions hereof.
5.6 Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchaser (other
than by merger). The Purchaser may assign any or all of its rights under this Agreement to any Person to whom the Purchaser assigns or
transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by
the provisions of the Transaction Documents that apply to the Purchaser.
5.7 No
Third-Party Beneficiaries. The Placement Agent shall be a third party beneficiary of the representations and warranties of the Company
in Section 3.1 and the representations and warranties of the Purchaser in Section 3.2. This Agreement is intended for the benefit
of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof
be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8.
5.8 Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts
of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions
contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts
sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such
court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action
or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.7,
the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’
fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.
5.9 Survival.
The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
5.10 Execution.
This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that
the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery
of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were
an original thereof.
5.11 Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force
and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
5.12 Replacement
of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall
issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of
and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable
third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
5.13 Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchaser
and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may
not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby
agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would
be adequate.
5.14 Saturdays,
Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or
granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business
Day.
5.15 Construction.
The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents
and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party
shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference
to share prices and Ordinary Shares in any Transaction Document shall be subject to adjustment for reverse and forward share splits, share
dividends, share combinations and other similar transactions with respect to the Ordinary Shares that occur after the date of this Agreement.
5.16 WAIVER
OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY
AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY
WAIVES FOREVER TRIAL BY JURY.
[Signature Pages Follow]
IN WITNESS WHEREOF, the parties
hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first
indicated above.
| ZK INTERNATIONAL GROUP CO., LTD. |
|
Address for Notice: |
| |
|
c/o Zhejiang Zhengkang Industrial Co., Ltd.
No. 678 Dingxing Road, Binhai Industrial Park
Economic & Technology Development Zone
Wenzhou, Zhejiang Province
People’s Republic of China |
| |
|
|
|
| By: |
|
|
|
| |
Name: Jiancong Huang |
|
|
| |
Title: Chief Executive Officer and Chairman |
|
|
| |
|
Attention:
Email: |
With a copy to (which shall not constitute notice):
Ortoli Rosenstadt LLP
366 Madison Avenue, 3rd Floor, New York, NY 10017
Attn: Jason Ye, Esq.
Email:
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]
[PURCHASER SIGNATURE PAGES TO ZK INTERNATIONAL
GROUP CO., LTD.
SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned
have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated
above.
Name of Purchaser: _________________________________________________________
Signature
of Authorized Signatory of Purchaser: __________________________________
Name of Authorized Signatory: ________________________________________________
Title of Authorized Signatory: _________________________________________________
Email Address of Authorized Signatory:__________________________________________
Facsimile Number of Authorized Signatory: _______________________________________
Address for Notice to Purchaser:
Address for Delivery of the Securities to Purchaser (if not same as
address for notice):
| Subscription Amounts: |
|
| |
|
| Initial Subscription Amount: |
$1,500,000 |
| |
|
| Second Subscription Amount: |
at least $2,000,000 and up to $3,500,000 (as determined in Purchaser’s sole discretion) |
| |
|
| Third Subscription Amount: |
an amount equal to $5,000,000 minus the aggregate amount of the Initial Subscription Amount and Second Subscription Amount |
| |
|
| Total Subscription Amounts: |
$5,000,000 |
| |
|
| EIN Number: |
____________________ |
WIRE INSTRUCTIONS
Exhibit 99.1
ZK International Group Co., Ltd. and The
CF Opportunity Fund Commits $5 Million Investment with the First Subscription Priced at $1.70 per Share
WENZHOU,
China, November 29, 2023 /PRNewswire/ -- ZK International Group Co., Ltd. (Nasdaq: ZKIN) ("ZKIN,"
"ZK International" or the "Company"), a leading provider of advanced steel products, is pleased to announces
a financial boost with a $5 million passive investment commitment from the CF Opportunity Fund Ltd., which is a Bahamas-based fund.
Univest Securities acted as the sole placement agent in facilitating
this strategic financing, marking a significant milestone in ZKIN's journey towards enhanced growth and innovation.
About the Financing:
ZKIN has successfully secured a substantial passive investment of $5
million from a Bahamas Fund, signaling a vote of confidence in the Company's vision and future prospects. The investment will be made
in three separate subscriptions and one closing, demonstrating a structured approach to fostering a long-term belief in the Company’s
vision and future.
The Initial Subscription - Establishing Foundations:
An initial investment of $1,500,000 will be completed within three
business days after signing the Securities Purchase Agreement (the “Agreement”) (the "Initial Subscription Date").
This initial phase sets the tone for the partnership's future by providing essential capital when it is most needed. The agreed per-share
price for this closing is equal to $1.70 per share.
The Second Subscription - Fortifying Collaboration:
Following the successful completion of the initial tranche, an additional
$2,000,000 investment will be executed within 60 days from the Initial Subscription Date (the "Second Subscription Date"). This
second phase will look at solidifying CF Fund’s belief in the Company’s vision.
The Third Subscription - Sustaining Momentum:
Building on
the momentum of the previous subscriptions, the final investment of $1,500,000 will be concluded within 60 days from the Second Subscription
Date (the "Third Subscription Date"). The per-share price for this closing is equal to 165% of the higher of (i) the Initial
Bid Price, (ii) or the closing bid price as of the trading day immediately prior to the Third Closing Date, or (ii) the
average closing bid price during the five trading days immediately prior to the Third Subscription Date..
Strengthening ZKIN's Financial Position:
This financing marks a significant milestone, providing ZKIN with a
robust financial foundation to expedite its mission of delivering innovative steel products and solutions globally. The invaluable support
from CF Opportunity Fund Ltd., facilitated by Univest Securities, will empower ZKIN to explore new opportunities, expand its operations
internationally, and fortify its position in the dynamic steel industry.
A Pioneering Journey:
Remaining steadfast in its commitment to innovation, excellence, and
sustainable growth, ZK International Group Co., Ltd. welcomes this substantial passive investment from CF Opportunity Fund Ltd. Aligned
with the Company's vision, this financing opens doors to a promising future. ZKIN eagerly anticipates the collaborative efforts that will
help shape the future landscape of the steel industry.
Mr. Jiancong
Huang, Chairman of the Company, stated, "We are delighted by the trust placed in ZK International Group Co., Ltd. by the CF
Opportunity Fund Ltd. This strategic financing not only strengthens our financial standing but also underscores the shared belief in our
commitment to delivering cutting-edge solutions to its shareholders. With an above market pricing by the fund just solidifies that the
Company is undervalued and has more foreseeable growth in the future.
Mr. Chris Fraunenknecht, CEO of the CF Opportunity Fund Ltd.,
emphasizes, “that this passive investment is not intended for establishing control of ZKIN, but instead should signal that the fund
is committed to a supportive role, fostering growth and innovation while respecting the existing leadership and strategic direction of
ZK International Group Co., Ltd.”
For more information
please visit www.ZKInternationalGroup.com. Additionally, please follow the Company on Twitter, Facebook, YouTube,
and Weibo. For further information on the Company's SEC filings please visit www.sec.gov.
About ZK International Group Co., Ltd.:
ZK International Group Co., Ltd. is a China-based
engineering company building and investing in innovative technologies for the modern world. With a focus on designing and implementing
next-generation solutions through industrial, environmental and software engineering, ZKIN owns 28 patents, 21 trademarks, 2 Technical
Achievement Awards, and 10 National and Industry Standard Awards.
ZKIN’s core business is to engineer and
manufacture patented high-performance stainless steel and carbon steel pipe products that effectively deliver high quality, highly-sustainable
and environmentally sound drinkable water to the Chinese, Asia and European markets. ZK International is Quality Management System
Certified (ISO9001), Environmental Management System Certified (ISO1401), and a National Industrial Stainless Steel Production Licensee.
It has supplied stainless steel pipelines for over 2,000 projects, which include the Beijing National Airport, the "Water Cube"
and "Bird's Nest", which were venues for the 2008 Beijing Olympics. ZK International is preparing to capitalize on the $850
Billion commitment made by the Chinese Government to improve the quality of water, which has been stated to be 70% unfit for human contact.
Safe Harbor Statement
This news release contains forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Without limiting the generality of the
foregoing, words such as "may," "will," "expect," "believe," "anticipate," "intend,"
"could," "estimate" or "continue" or the negative or other variations thereof or comparable terminology
are intended to identify forward-looking statements. In addition, any statements that refer to expectations, projections or other characterizations
of future events or circumstances are forward-looking statements. These forward-looking statements are not guarantees of future performance
and are subject to certain risks, uncertainties and assumptions that are difficult to predict and many of which are beyond the control
of ZK International. Actual results may differ from those projected in the forward-looking statements due to risks and uncertainties,
as well as other risk factors that are included in the Company’s filings with the U.S. Securities and Exchange Commission. Although
ZK International believes that the assumptions underlying the forward-looking statements are reasonable, any of the assumptions could
prove inaccurate and, therefore, there can be no assurance that the results contemplated in forward-looking statements will be realized.
In light of the significant uncertainties inherent in the forward-looking information included herein, the inclusion of such information
should not be regarded as a representation by ZK International or any other person that their objectives or plans will be achieved. ZK
International does not undertake any obligation to revise the forward-looking statements contained herein to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated events.
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