Item 1.01 Entry into a Material Definitive Agreement.
On January 7, 2021, Pingtan Marine Enterprise Ltd. (the "Company") entered into
a Securities Purchase Agreement (the "Purchase Agreement") with an accredited
investor named therein (the "Purchaser"), pursuant to which the Company agreed
to issue and sell, in a registered direct offering (the "Offering"), 4,000,000
of the Company's Series A Convertible Preferred Shares, par value $0.001 per
share ("Series A Preferred Shares"), at a purchase price of $1.00 per share and
a stated value of $1.10 that are convertible into the Company's ordinary shares,
for gross proceeds of approximately $4,000,000. The closing of the Offering is
expected to take place on or about January 8, 2021, subject to the satisfaction
of customary closing conditions.
The Purchase Agreement contains customary representations, warranties and
agreements by the Company, customary conditions to closing, indemnification
obligations of the Company, including for liabilities under the Securities Act
of 1933, as amended, termination provisions and other obligations and rights of
the parties. The Offering is being made pursuant to an effective shelf
registration statement on Form S-3 (File No. 333-248620) previously filed with
and declared effective by the U.S. Securities and Exchange Commission, and a
prospectus supplement thereunder. A copy of the opinion of Maples and Calder
(Hong Kong) LLP relating to the legality of the issuance and sale of the
securities in the Offering is attached to this Current Report on Form 8-K as
Exhibit 5.1. This Current Report on Form 8-K shall not constitute an offer to
sell or the solicitation of an offer to buy securities, nor shall there be any
sale of securities in any state in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such state.
The estimated net proceeds from the Offering, after deducting estimated offering
expenses payable by the Company and placement agent fees, are expected to be
approximately $3.43 million. The Company intends to use the net proceeds from
the Offering for working capital, general corporate purposes (including sales
and marketing and the satisfaction of outstanding amounts payable to its vendors
in connection with trade payables) and transaction expenses. The Company may
also use a portion of the net proceeds from the Offering to finance acquisitions
of, or investments in, competitive and complementary businesses, products or
services as a part of its growth strategy.
In connection with the Offering, the Company's board approved the Certificate of
Designation for the Series A Preferred Shares (the "Certificate of
Designation"), establishing and designating the rights, powers and preferences
of the Series A Preferred Shares. The Company designated 4,000,000 Series A
Preferred Shares. Pursuant to the Certificate of Designation, the holders of the
Series A Preferred Shares are entitled, among other things, to the right to
receive dividends on the stated value of such Series A Preferred Share at a
dividend rate equal to 8.0% per annum for a guaranteed period of one year. The
Series A Preferred Shares have no voting rights, except with respect to certain
amendments to the rights, preferences or powers of the Series A Preferred
Shares, the authorization, creation or increase of certain parity shares or
shares ranking senior to the Series A Preferred Shares, or as otherwise required
by law or the Certificate of Designation. Each Series A Preferred Share is
convertible into the Company's ordinary shares at a conversion price equal to
the lesser of (i) $2.00 and (ii) 90% of the lowest volume weighted average price
of the ordinary shares on a trading day during the ten trading days prior to the
conversion date, but not lower than $0.44, subject to certain adjustments. In
the event of any liquidation of the Company, the Series A Preferred Shares rank
senior to the Company's ordinary shares in the distribution of assets, to the
extent legally available for distribution.
On January 7, 2021, the Company engaged Spartan Capital Securities, LLC (the
"Placement Agent") to act as its exclusive placement agent for the Offering
pursuant to a Placement Agent Agreement, dated January 7, 2021 (the "Placement
Agent Agreement"). In consideration for its placement agent services, the
Company agreed to pay the Placement Agent, in addition to out-of-pocket expenses
of up to $35,000 and legal expenses of up to $50,000, (i) a cash fee of 6.5% of
the gross proceeds received by the Company from the sale of the Series A
Preferred Shares in the Offering and (ii) a number of warrants to purchase the
Company's ordinary shares equal to 7.0% of the gross proceeds received by the
Company from the sale of the Series A Preferred Shares in the Offering divided
by the closing price of the Company's ordinary shares on January 7, 2021, at an
exercise price per share of $1.87, subject to adjustment, which equates to
149,733 ordinary shares, pursuant to a Placement Agent Ordinary Share Purchase
Warrant, to be issued at closing by the Company to the Placement Agent (the
"Placement Agent Warrant"). The Placement Agent Warrant will be exercisable, in
whole or in part, commencing on a date that is six months and one day after the
closing of the Offering and expires on the five-year anniversary of the closing
of the Offering.
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The foregoing is only a summary of the material terms of the documents related
to the Offering. The foregoing descriptions of the Purchase Agreement, the
Certificate of Designation, the Placement Agent Agreement and the Placement
Agent Warrant are not complete and are qualified in their entireties by
reference to the full text of the Purchase Agreement, the Certificate of
. . .
Item 3.02 Unregistered Sales of Equity Securities.
The information contained above in Item 1.01 of this Current Report on Form 8-K
regarding the Placement Agent Warrant is hereby incorporated by reference into
this Item 3.02. The issuance of the Placement Agent Warrant by the Company and
the ordinary shares issuable upon exercise of the Placement Agent Warrant is
exempt from registration pursuant to Section 4(a)(2) of the Securities Act of
1933, as amended, and Rule 506(b) promulgated thereunder.
Item 3.03 Material Modifications to Rights of Security Holders.
The information contained above in Item 1.01 of this Current Report on Form 8-K
regarding the Series A Preferred Shares and Certificate of Designation is
incorporated by reference into this Item 3.03.
Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal
Year.
On January 6, 2021, the Company's board approved the Certificate of Designation,
a copy of which is attached hereto as Exhibit 3.1 and incorporated herein by
reference. The Certificate of Designation, effective as of January 6, 2021,
establishes and designates the Series A Preferred Shares and the rights,
preferences, privileges and limitations thereof. The Certificate of Designation
was filed with the Cayman Registrar of Companies upon approval by the Company's
board.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit Description
3.1 Series A Convertible Preferred Shares Certificate of Designation
4.1 Form of Placement Agent Ordinary Share Purchase Warrant
5.1 Opinion of Maples and Calder (Hong Kong) LLP
10.1 Form of Securities Purchase Agreement, dated January 7, 2021, between
Pingtan Marine Enterprise Ltd. and purchaser named therein
10.2 Placement Agent Agreement, dated January 7, 2021, between Pingtan
Marine Enterprise Ltd. and Spartan Capital Securities, LLC
23.1 Consent of Maples and Calder (Hong Kong) LLP (contained in its opinion
in Exhibit 5.1)
104 Cover Page Interactive Data File (the cover page XBRL tags are embedded
in the Inline XBRL document)
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