Form 6-K Taoping Inc. For: Mar 02

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 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, March 2021

 

Commission File Number: 001-35722

 

TAOPING INC.

(Translation of registrant’s name in English)

 

21st Floor, Everbright Bank Building

Zhuzilin, Futian District

Shenzhen, Guangdong, 518040

People’s Republic of China

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F [X]       Form 40-F [  ]

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [  ]

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [  ]

 

 

 

Entry into a Material Definitive Agreement.

 

On March 1, 2021, Taoping Inc. (the “Company”) and each of certain investors (the “Investors”) entered into a securities purchase agreement (the “Purchase Agreement”), pursuant to which the Company agreed to sell to the Investors an aggregate of 500,000 ordinary shares, no par value (the “Ordinary Shares”) at a purchase price of $6.70 per share in a registered direct offering.

 

The total aggregate gross proceeds of the above financing are $3.35 million. The Company intends to use the net proceeds from the financing for working capital and general corporate purposes. The financing is expected to close on or about March 3, 2021, subject to satisfaction of customary closing conditions.

 

A copy of form of the Purchase Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The foregoing summaries of the terms of the Purchase Agreement are subject to, and qualified in their entirety by, such document.

 

The sale and offering of Ordinary Shares pursuant to the Purchase Agreement were effected as a takedown off the Company’s shelf registration statement on Form F-3 (File No. 333-229323), which became effective on February 11, 2019, pursuant to a prospectus supplement to be filed with the Securities and Exchange Commission.

 

The information contained in this report on Form 6-K is hereby incorporated by reference into the Company’s registration statement on Form F-3 (File No. 333-229323) that was filed with the SEC on January 22, 2019. This report on Form 6-K shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

 

 

Exhibit Number		Description
5.1		Opinion of Maples and Calder
10.1		Form of Securities Purchase Agreement, dated March 1, 2021, between the Company and Investors
23.1		Consent of Maples and Calder (included as part of Exhibit 5.1)
99.1		Press Release, dated March 2, 2021

 

 

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.

 

	TAOPING INC.
March 2, 2021	By:	/s/ Jianghuai Lin
		Jianghuai Lin
		Chief Executive Officer

 

 

 

Exhibit 5.1

 

 

Our ref: GFW/673333.13

 

Taoping Inc.

Kingston Chambers

PO Box 173

Road Town

Tortola

British Virgin Islands

 

2 March 2021

 

Dear Sirs

 

Taoping Inc.

 

We have acted as counsel as to British Virgin Islands law to Taoping Inc. (the “Company”) in connection with the Company’s registration statement on Form F-3 (file number 333-229323) (the “Registration Statement”) under the Securities Act of 1933, as amended, filed with the U.S. Securities and Exchange Commission (the “Commission”) and declared effective on 11 February 2019 relating to the offering of ordinary shares of the Company of no par value (the “Ordinary Shares”) having an aggregate offering price not to exceed $80,000,000 and the prospectus supplement (the “Prospectus Supplement”) to be filed with the Commission on or about the date of this opinion.

 

1	Documents Reviewed

 

We have reviewed originals, copies, drafts or conformed copies of the following documents:

 

1.1

The public records of the Company on file and available for public inspection at the Registry of Corporate Affairs in the British Virgin Islands (the “Registry of Corporate Affairs”) on 2 March 2021, including the Company’s Certificate of Incorporation and its Amended and Restated Memorandum and Articles of Association dated 23 December 2020 (the “Memorandum and Articles”).

 

1.2	The records of proceedings available from a search of the electronic records maintained on the Judicial Enforcement Management System from 1 January 2000 and available for inspection on 2 March 2021 at the British Virgin Islands High Court Registry (the “High Court Registry”).

 

1.3	The written resolutions of the board of directors of the Company dated 1 March 2021 (the “Resolutions”).

 

 

 

1.4	A Certificate of Incumbency (the “Registered Agent’s Certificate”) dated 2 March 2021, issued by Maples Corporate Services (BV) Limited, the Company’s registered agent (a copy of which is attached as Annexure A).

 

1.5	The register of members of the Company (the “Register of Members”).

 

1.6	A Certificate of Good Standing dated 2 March 2021 in respect of the Company issued by the Registrar of Corporate Affairs in the British Virgin Islands (the “Certificate of Good Standing”).

 

1.7	The Securities Purchase Agreement dated 1 March 2021 between the Company and the investor(s) named therein (the “Securities Purchase Agreement”).

 

1.8	The Registration Statement.

 

1.9	The Prospectus Supplement.

 

2	Assumptions

 

The following opinions are given only as to, and based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions only relate to the laws of the British Virgin Islands which are in force on the date of this opinion letter. In giving the following opinions we have relied (without further verification) upon the completeness and accuracy of the Registered Agent’s Certificate, the Certificate of Good Standing and the Resolutions. We have also relied upon the following assumptions, which we have not independently verified:

 

2.1	The Memorandum and Articles remain in full force and effect and are unamended.

 

2.2	The directors of the Company at the date of the Resolutions were the persons named therein respectively as the directors.

 

2.3	Each director disclosed his interest (if any), in the manner prescribed in the Memorandum and Articles prior to passing any of the Resolutions adopted by the board of directors of the Company or the compensation committee of the Board of directors of the Company.

 

2.4	The members of the Company have not restricted or limited the powers of the directors of the Company in any way.

 

2.5

The minute book and corporate records of the Company as maintained at its registered office in the British Virgin Islands and on which the Registered Agent’s Certificate were prepared are complete and accurate in all material respects, and all minutes and resolutions filed therein represent a complete and accurate record of all meetings of the Members and directors (or any committee thereof) (duly convened in accordance with the Memorandum and Articles) and all resolutions passed at the meetings, or passed by written resolution or consent, as the case may be.

 

2.6	There is nothing contained in the minute book or corporate records of the Company (which we have not inspected) which would or might affect the opinions set out below.

 

2.7	Copies of documents, conformed copies or drafts of documents provided to us are true and complete copies of, or in the final forms of, the originals, and translations of documents provided to us are complete and accurate.

 

 

2.8	All signatures, initials and seals are genuine.

 

2.9	The Resolutions remain in full force and effect and have not been revoked or varied.

 

2.10

That all public records of the Company which we have examined are accurate and that the information disclosed by the searches which we conducted against the Company at the Registry of Corporate Affairs and the High Court Registry is true and complete and that such information has not since then been altered and that such searches did not fail to disclose any information which had been delivered for registration but did not appear on the public records at the date of our searches.

 

2.11

The Company is not the subject of legal, arbitral, administrative or other proceedings in any jurisdiction. Nor have the directors and/or members of the Company taken any steps to have the Company struck off or placed in liquidation, nor have any steps been taken to wind up the Company. Nor has any receiver been appointed over any of the Company’s property or assets.

 

2.12	The completeness and accuracy of the Register of Members.

 

2.13	There is nothing under any law (other than the laws of the British Virgin Islands) which would or might affect the opinions set out below. We have not made any investigation of the laws, rules or regulations of any jurisdiction other than the laws of the British Virgin Islands.

 

2.14	The Ordinary Shares issued pursuant to the Securities Purchase Agreement will, when issued, be issued out of the authorised but unissued Ordinary Shares of the Company.

 

3

Opinions

 

Based upon, and subject to, the foregoing assumptions and the qualifications set out below, and having regard to such legal considerations as we deem relevant, we are of the opinion that:

 

3.1

The Company is a company limited by shares incorporated with limited liability under the BVI Business Companies Act (as amended) (the “Act”), is in good standing at the Registry of Corporate Affairs, is validly existing under the laws of the British Virgin Islands and possesses the capacity to sue and be sued in its own name.

 

3.2	Based solely on our review of the Memorandum and Articles, the Company is currently authorised to issue 100,000,000 ordinary shares of one class of no par value.

 

3.3	Upon the issuance of any Ordinary Shares and payment of the consideration therefore in accordance with the Securities Purchase Agreement, such Ordinary Shares will be validly issued, fully paid and non-assessable.

 

3.4	The Ordinary Shares will be deemed to be issued when the name of the registered holder(s) is entered in the register of members of the Company as the registered holder(s) of the Ordinary Shares.

 

We hereby consent to the filing of this opinion as an exhibit to the Company’s report filing on Form 6-K with the Commission, which will be incorporated by reference into and deemed part of the Registration Statement and to the references to our firm in the Prospectus Supplement forming a part of the Registration Statement. In giving this consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the United States Securities Act of 1933 or the rules and regulations promulgated thereunder.

 

 

4	Qualifications

 

The opinions expressed above are subject to the following qualifications:

 

4.1	To maintain the Company in good standing under the laws of the British Virgin Islands, annual filing fees must be paid to the Registry of Corporate Affairs.

 

4.2

The obligations of the Company may be subject to restrictions pursuant to United Nations sanctions as implemented under the laws of the British Virgin Islands and/or restrictive measures adopted by the European Union Council for Common Foreign and Security Policy extended to the British Virgin Islands by the Order of Her Majesty in Council.

 

4.3

Under section 42 of the Act, the entry of the name of a person in the register of members of a company as a holder of a share in a company is prima facie evidence that legal title in the share vests in that person. A third party interest in the shares in question would not appear. An entry in the register of members may yield to a court order for rectification (for example, in the event of inaccuracy or omission).

 

4.4	In this opinion, “non-assessable” means that the holders of fully paid shares in the Company have no liability to the Company, as shareholder, except for any liability expressly provided for in the Memorandum and Articles and any liability to repay a distribution under the Act.

 

The opinions in this opinion letter are strictly limited to the matters contained in the opinions section above and do not extend to any other matters or documents not referred to herein or any circumstance, fact or event that occurs after the date of this legal opinion that may alter, affect or modify the opinions expressed herein.

 

This opinion letter is addressed to and for the benefit solely of the addressee.

 

Yours faithfully
/s/ Maples and Calder
Maples and Calder

 

 

Appendix A

Registered Agent Certificate

 

 

 

 

 

Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is made as of March 1, 2021, by and among Taoping Inc., a BVI business company (the “Company”) and the inventors listed on the Schedule of Investors attached hereto (each, including its successors and assigns, an “Investor” and collectively the “Investors”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to an effective Registration Statement under the Securities Act of 1933, as amended (the “Securities Act”), the Company desires to issue and sell to the Investors, and each of the Investors desires to purchase from the Company certain securities of the Company, as more fully described in this Agreement, and

 

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 each Investor agree as follows:

 

ARTICLE 1.
DEFINITIONS

 

1.1. Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms shall have the meanings indicated in this Section 1.1:

 

“Action” means any action, suit, inquiry, notice of violation, proceeding (including any partial proceeding such as a deposition) or investigation pending or threatened in writing against or affecting the Company, any of the Subsidiaries and Affiliated Entities or any of their respective properties before or by any court, arbitrator, governmental or administrative agency, regulatory authority (federal, state, county, local or foreign), stock market, stock exchange or trading facility.

 

“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 144 (as defined below).

 

“Affiliated Entities” means the entities through which the Company conducts its operations in the People’s Republic of China (the “PRC”) by way of contractual arrangements.

 

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York or Shenzhen, PRC are authorized or required by law to remain closed; 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 or Shenzhen, PRC generally are open for use by customers on such day.

 

 

“Closing Date” means a Trading Day no later than the second (2nd) Trading Day following the date hereof on which all of the Transaction Documents have been executed and delivered by the applicable parties thereto, and all conditions precedent to (i) each Investor’s obligations to pay the Purchase Price and (ii) the Company’s obligations to deliver the Shares to each Investor, in each case, have been satisfied or waived.

 

“Commission” means the Securities and Exchange Commission.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“GAAP” means U.S. generally accepted accounting principles.

 

“Governmental Body” shall mean any: (a) nation, state, commonwealth, province, territory, county, municipality, district or other jurisdiction of any nature; (b) federal, state, local, municipal, foreign or other government; or (c) governmental or quasi-governmental authority of any nature (including any governmental or administrative division, department, agency, commission, instrumentality, official, organization, unit, body or entity) and any court or other tribunal.

 

“Lien” means any lien, charge, encumbrance, security interest, right of first refusal, right of participation or other restrictions of any kind.

 

“Material Adverse Effect” means any of (i) a material and adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material and adverse effect on the results of operations, assets, prospects, business or condition (financial or otherwise) of the Company and the Subsidiaries and Affiliated Entities, taken as a whole, or (iii) an adverse impairment to the Company’s ability to perform on a timely basis its obligations under any Transaction Document.

 

“New York Courts” means the state and federal courts sitting in the City of New York, Borough of Manhattan.

 

“Ordinary Shares” means the ordinary shares of the Company of no par value each, and any securities into which such ordinary shares may hereafter be reclassified or for which it may be exchanged as a class.

 

“Ordinary Shares Equivalents” means any securities of the Company which entitle the holder thereof to acquire Ordinary Shares at any time, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Ordinary Shares or other securities that entitle the holder to receive, directly or indirectly, Ordinary Shares.

 

“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.

 

“PRC” means the People’s Republic of China, excluding for purposes of this Agreement only, Hong Kong Special Administrative Region, Macao Special Administrative Region and Taiwan.

 

“Principal Market” means The Nasdaq Capital Market.

 

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Prospectus” means the final prospectus filed for the Registration Statement.

 

“Prospectus Supplement” means the supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with the Commission and delivered by the Company to the Investors at the Closing.

 

“Registration Statement” means the effective registration statement with Commission file No. 333-229323 which registers the sale of the Shares to the Investors.

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Shares” means an aggregate of 500,000 Ordinary Shares issued to the Investors pursuant to this Agreement.

 

“Short Sales” means all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act.

 

“Subsidiary” means any “significant subsidiary” as defined in Rule 1-02(w) of the Regulation S-X promulgated by the Commission under the Exchange Act.

 

“Trading Day” means, as applicable, (x) with respect to all price or trading volume determinations relating to the Ordinary Shares, any day on which the Ordinary Shares is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Ordinary Shares, then on the principal securities exchange or securities market on which the Ordinary Shares are then traded, provided that “Trading Day” shall not include any day on which the Ordinary Shares are scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Ordinary Shares are suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by any Investor or (y) with respect to all determinations other than price or trading volume determinations relating to the Ordinary Shares, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.

 

“Trading Market” means whichever of the New York Stock Exchange, the NYSE American, the NASDAQ Global Select Market, the NASDAQ Global Market, the Principal Market or OTC Markets on which the Ordinary Shares are listed or quoted for trading on the date in question.

 

“Transaction Documents” means this Agreement, all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer Agent” means Transhare Corporation, the current transfer agent of the Company, with a mailing address of 2849 Executive Dr., Suite 200, Clearwater FL 33762, and any successor transfer agent of the Company.

 

 

ARTICLE 2.

PURCHASE AND SALE

 

2.1. Subscription for Shares by the Investors. Subject to the terms and conditions set forth in this Agreement, including all of the conditions set forth in Sections 5.1 and 5.2 hereof, on the Closing Date, the Company agrees to sell, and the Investors, severally and not jointly, agree to purchase, up to an aggregate of $3,350,000 of Shares including such aggregate number of Shares as is set forth opposite such Investor’s name in column (2) on the Schedule of Investors.

 

2.2. Closing. The sale of the Shares will take place in a closing (the “Closing”), subject to the satisfaction of the parties hereto of their obligations herein. The Closing shall be conducted by exchange of original documents or electronic documents following the fulfillment or waiver of the conditions to closing as set forth in Article 5 on the Closing Date.

 

(a) The aggregate purchase price for the Shares to be purchased by each Investor (the “Purchase Price”) shall be the amount set forth opposite such Investor’s name in column (3) on the Schedule of Investors.

 

2.3. Closing Deliveries.

 

(a) At the Closing, the Company shall deliver or cause to be delivered to each Investor the following (the “Company Deliverables”):

 

(i) a copy of instructions to the Transfer Agent instructing the Transfer Agent to update the register of member to reflect the issue of the Shares and deliver the Shares in an amount specified on the signature page of such Investor and registered in the name of such Investor; and

 

(ii) this Agreement duly signed by the Company; and

 

(iii) the Prospectus and Prospectus Supplement (which may be delivered in accordance with Rule 172 under the Securities Act).

 

(b) At the Closing, each Investor shall deliver or cause to be delivered the following (collectively, the “Investor Deliverables”):

 

(i) the Purchase Price, in immediately available funds in United States Dollar, by wire transfer to an account designated in writing by an authorized representative of the Company for such purpose prior to the Closing; and

 

(ii) this Agreement duly signed by each Investor.

 

 

ARTICLE 3.
REPRESENTATIONS AND WARRANTIES

 

3.1. Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to the Investors as of the date hereof and the Closing Date:

 

(a) Subsidiaries and Affiliated Entities. The Company has no direct or indirect Subsidiaries or Affiliated Entities other than as specified in the SEC Reports (as defined below).

 

(b) Organization and Qualification. The Company and each of the Subsidiaries and Affiliated Entities are duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. None of the Company, the Subsidiaries and the Affiliated Entities is in violation of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company, the Subsidiaries and Affiliated Entities is duly qualified to conduct its respective businesses 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, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect.

 

(c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company in connection therewith. Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

 

(d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated thereby do not and will not (i) conflict with or violate any provision of the Company’s, any Subsidiary’s or any Affiliated Entity’s certificate or articles of incorporation, bylaws or other organizational or charter documents as in effect on the date hereof, 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, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any material agreement, credit facility, debt or other instrument (evidencing a Company, Subsidiary or Affiliated Entity debt or otherwise) or other understanding to which the Company or any of the Subsidiaries and Affiliated Entities is a party or by which any property or asset of the Company or any of the Subsidiaries and Affiliated Entities is bound or affected, or (iii) result in a material violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or any of the Subsidiaries and Affiliated Entities is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or any of the Subsidiaries and Affiliated Entities is bound or affected.

 

 

(a) Filings, Consents and Approvals. Except as set forth in the SEC Reports (as defined below), 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 United States or PRC 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 filing with the Commission of the Prospectus Supplement, (ii) filings required by state securities laws, (iii) if required, filings with each applicable Trading Market for the issuance and sale of the Shares in the time and manner required thereby, and (iv) the filings required in accordance with Section 4.1 and (v) those that have been made or obtained prior to the date of this Agreement.

 

(b) Issuance of the Shares. The Shares 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. The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission.

 

(e) Capitalization. The number of securities and type of all authorized, issued and outstanding capital stock of the Company, all Ordinary Shares reserved for issuance under the Company’s various option and incentive plans, all shares of capital stock of the Company issuable and reserved for issuance pursuant to securities exercisable for, or convertible into or exchangeable for any shares of capital stock of the Company, and all Ordinary Shares reserved for issuance pursuant to the Company’s existing contractual obligations as of the date hereof, is specified in the SEC Reports. Except as specified in the SEC Reports in connection with the Company’s variable interest entity structure, no securities of the Company are entitled to preemptive or similar rights, and 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 specified in the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exchangeable for, or giving any Person any right to subscribe for or acquire, any Ordinary Shares, or contracts, commitments, understandings or arrangements by which the Company or any of the Subsidiaries and Affiliated Entities is or may become bound to issue additional Ordinary Shares, or securities or rights convertible or exchangeable into Ordinary Shares.

 

 

(f) SEC Reports; Financial Statements. To the best knowledge of the Company, the Company has filed all reports required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the 12 months preceding the date hereof (or such shorter period as the Company was required by law to file such reports) (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 or has timely filed a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act and the rules and regulations of the Commission promulgated thereunder, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not materially misleading. 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 GAAP applied on a consistent basis during the periods involved, except as may be otherwise specified in such financial statements or the notes thereto, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries and Affiliated Entities 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.

 

(g) Litigation. There is no Action which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Shares or (ii) could, if there were an unfavorable decision, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect on the Company or any of its Subsidiaries and Affiliated Entities. Neither the Company nor any of the Subsidiaries and Affiliated Entities, nor any director or officer thereof (in his or her capacity as such), 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 any investigation by the Commission involving the Company or any current or former director or officer of the Company (in his or her capacity as such). The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any of the Subsidiaries and Affiliated Entities under the Exchange Act or the Securities Act.

 

(h) Compliance. Neither the Company nor any of the Subsidiaries and Affiliated Entities (i) is in material 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 material default by the Company or any of the Subsidiaries and Affiliated Entities under), nor has the Company or any of the Subsidiaries and Affiliated Entities received notice of a claim that it is in material 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 order of any material court, arbitrator or Governmental Body, or (iii) is or has been in material violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to the business of the Company, the Subsidiaries and Affiliated Entities, taxes, environmental protection, occupational health and safety, product quality and safety, licensure and employment and labor matters (including social insurance and housing funds).

 

(i) Regulatory Permits. The Company, the Subsidiaries and Affiliated Entities possess all material certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, and neither the Company nor any of the Subsidiaries and Affiliated Entities has received any notice of proceedings relating to the revocation or modification of any such permits.

 

 

(j) Title to Assets. The Company and each of the Subsidiaries and Affiliated Entities have valid land use rights for all real property owned by them that is material to their respective businesses and good and marketable title in all personal property owned by them that is material to their respective businesses, in each case free and clear of all Liens, except for 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 each of the Subsidiaries and Affiliated Entities. Any real property and facilities held under lease by the Company and any of the Subsidiaries and Affiliated Entities are held by them under valid, subsisting and enforceable leases of which the Company and each of the Subsidiaries and Affiliated Entities are in material compliance.

 

(k) Material Changes; Undisclosed Events. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) neither the Company nor any of the Subsidiaries and Affiliated Entities has incurred any material liabilities (direct, indirect, contingent, or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, (v) neither the Company nor any of the Subsidiaries and Affiliated Entities has waived any material right or material debt owed to it, (vi) neither the Company nor any of the Subsidiaries and Affiliated Entities has changed or amended its certificate or articles of incorporation, bylaws or other organizational or charter documents, or change any material contract or arrangement by which the Company or any of the Subsidiaries and Affiliated Entities is bound or to which its assets or properties is subject, and (vii) the Company has not issued any equity securities to any officer, director, consultant or Affiliate of the Company or any of the Subsidiaries and Affiliated Entities, except pursuant to existing Company equity incentive plans or consulting agreements. The Company does not have pending before the Commission any request for confidential treatment of information. Neither the Company nor any of the Subsidiaries and Affiliated Entities have any liabilities or obligations required to be disclosed in the SEC Reports which are not so disclosed in the SEC Reports, other than those incurred in the ordinary course of the Company’s or any of the Subsidiaries and Affiliated Entities’ respective businesses and which, individually or in the aggregate, do not or would not reasonably be expected to have a Material Adverse Effect.

 

(l) Patents and Trademarks. The Company and its Subsidiaries and Affiliated Entities 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 as described in the SEC Reports as necessary or material for use in connection with their respective businesses (collectively, the “Intellectual Property Rights”). Neither the Company nor any of the Subsidiaries and Affiliated Entities has received notice (written or otherwise) that any of the Intellectual Property Rights used by the Company or any of the Subsidiaries and Affiliated Entities violates or infringes upon the rights of any Person. 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 Subsidiaries and Affiliated Entities have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties.

 

 

(m) Sarbanes-Oxley; Internal Accounting Controls. Except as set forth in the SEC Reports, to the best of the Company’s knowledge, the Company and each of the Subsidiaries and Affiliated Entities are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the applicable Closing Date.

 

(n) Tax Status. The Company and each of the Subsidiaries and Affiliated Entities have filed all material and necessary federal, state and foreign income and franchise tax returns and have paid or accrued all taxes shown as due thereon, and to the knowledge of the Company, the Company has no tax deficiency which has been asserted or threatened against the Company or any of the Subsidiaries and Affiliated Entities.

 

(o) Solvency. Based on the financial condition of the Company as of the Closing Date (and assuming that the Closing shall have occurred), (i) the Company’s fair saleable value of its assets exceeds the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to carry on its business for the current fiscal year as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its debt when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).

 

(p) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

(q) Listing and Maintenance Requirements. The Ordinary Shares are registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or which to the knowledge of the Company 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 specifically disclosed in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Ordinary Shares are or have been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. `

 

 

(r) Money Laundering. The Company and each of the Subsidiaries and Affiliated Entities are in compliance with, and have not previously violated, the USA Patriot Act of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, without limitation, the laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including, but not limited, to (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations contained in 31 CFR, Subtitle B, Chapter V.

 

(s) Application of Takeover Protections. The Company has taken all necessary action in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s memorandum and articles of association or the British Virgin Islands laws that is or could become applicable to the Investors as a result of the Investors and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Shares and the Investors’ ownership of the Shares.

 

(t) No Integrated Offering. Assuming the accuracy of the Investors’ 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 Shares to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

 

(u) No Additional Agreements. The Company does not have any agreement or understanding with any Investor with respect to the transactions contemplated by the Transaction Documents other than as specified in the Transaction Documents.

 

(v) Disclosure. The Company confirms that neither it nor any Person acting on its behalf has provided any Investor or its respective agents or counsel with any information that the Company believes constitutes material, non-public information concerning the Company, the Subsidiaries and Affiliated Entities or their respective businesses, except insofar as the existence and terms of the proposed transactions contemplated hereunder may constitute such information. The Company understands and confirms that the Investor will rely on the foregoing representations and covenants in effecting transactions in securities of the Company. All disclosure provided to the Investors regarding the Company, each of the Subsidiaries and Affiliated Entities or their respective businesses and the transactions contemplated hereby, furnished by or on behalf of the Company (including the Company’s representations and warranties set forth in this Agreement) are true and correct and do 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 light of the circumstances under which they were made, not misleading.

 

Each Investor acknowledges and agrees that the Company has not made nor makes any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.1.

 

 

3.2. Representations and Warranties of the Investor. Each Investor hereby represents and warrants to the Company as of the date hereof and the Closing Date:

 

(a) Organization; Authority. Investor 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 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 Investor. Each Transaction Document to which it is a party has been duly executed by Investor, and when delivered by Investor in accordance with the terms hereof, will constitute the valid and legally binding obligation of Investor, 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) Access to Information. Investor acknowledges that it has reviewed 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 Shares and the merits and risks of investing in the Shares; (ii) access to information about the Company and each of the Subsidiaries and Affiliated Entities and their respective 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. Neither such inquiries nor any other investigation conducted by or on behalf of such Investor or its representatives or counsel shall modify, amend or affect such Investor’s right to rely on the truth, accuracy and completeness of the SEC Reports and the Company’s representations and warranties contained in the Transaction Documents.

 

(c) No Conflicts. The execution, delivery and performance by such Investor of any Transaction Document and the consummation by such Investor of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of such Investor, (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which such Investor is a party or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws) applicable to such Investor, except, in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of such Investor to perform its obligations hereunder.

 

 

(d) Certain Trading Activities. Investor has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with Investor, engaged in any transactions in the securities of the Company (including, without limitations, any Short Sales involving the Company’s securities) since the time that Investor was first contacted by the Company regarding an investment in the Company. Investor covenants that neither it nor any Person acting on its behalf or pursuant to any understanding with it will engage in any transactions in the securities of the Company (including Short Sales) prior to the time that the transactions contemplated by this Agreement are publicly disclosed.

 

(e) No Group. Other than affiliates of such Investor who are also Investors under this Agreement, such Investor is not under common control with or acting in concert with any other Investor and is not part of a “group” for purposes of the 1934 Act.

 

The Company acknowledges and agrees that Investors have not made or do not make any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in this Section 3.2.

 

ARTICLE 4.
OTHER AGREEMENTS OF THE PARTIES

 

4.1. Securities Law Disclosure; Publicity. On or before 9:30 a.m., New York time, on or before the second (2^nd) Business Day after the date of this Agreement, the Company shall publicly disclose the material terms of the transactions contemplated hereby to the extent required by the Exchange Act. The Company covenants that following such disclosure, no Investor shall be in possession of any material, non-public information with respect to the Company or any of the Subsidiaries and Affiliated Entities.

 

4.2. Indemnification of Investors. The Company will indemnify and hold each Investor and its directors, officers, shareholders, partners, members, affiliates, employees and agents (each, an “Investor Party”) harmless from any and all direct and indirect 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 in respect thereof (collectively, “Losses”) that any such Investor Party may suffer or incur as a result of or relating to any misrepresentation, breach or inaccuracy of any representation, warranty, covenant or agreement made by any of the Company in any Transaction Document. In addition to the indemnity contained herein, the Company will reimburse each Investor Party for its reasonable legal and other expenses (including the cost of any investigation, preparation and travel in connection therewith) incurred in connection therewith, as such expenses are incurred.

 

4.3. Non-Public Information. The Company covenants and agrees that neither it nor any other Person acting on its behalf will provide each Investor or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such Investor shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that each Investor shall be relying on the foregoing representations in effecting transactions in securities of the Company.

 

4.4. Use of Proceeds. The Company will use the proceeds from the sale of the Shares for working capital and general corporate purposes.

 

 

ARTICLE 5.
CONDITIONS PRECEDENT TO CLOSING

 

5.1. Conditions Precedent to the Obligations of the Investors to Purchase the Shares. The obligation of each Investor to acquire the Shares at the Closing is subject to the satisfaction or waiver by such Investor, at or before the Closing, of each of the following conditions:

 

(a) Representations and Warranties. The representations and warranties of the Company contained herein (a) that are not qualified by materiality, Material Adverse Effect or a similar materiality qualifier shall be true and correct in all material respects both when made and on the Closing Date with the same force and effect as if made as of the Closing Date and (b) that are qualified by materiality, Material Adverse Effect or a similar materiality qualifier shall be true and correct in all respects both when made and on the Closing Date with the same force and effect as if made as of the Closing Date, other than such representations and warranties that expressly speak only as of a specific date or time, which shall be true and correct as of such specified date or time;

 

(b) Performance. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by it at or prior to the Closing;

 

(c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents;

 

(d) No Suspensions of Trading in Ordinary Shares; Listing. Trading in the Ordinary Shares shall not have been suspended by the Commission, any Trading Market or any Governmental Body (except for any suspensions of trading of not more than one Trading Day solely to permit dissemination of material information regarding the Company) at any time since the date of execution of this Agreement, the Ordinary Shares shall have been at all times since such date listed for trading on a Trading Market, and the Company shall not have received notice of any delisting or removal from trading on any Trading Market except as otherwise disclosed prior to the date hereof in SEC Reports;

 

(e) Adverse Changes. Since the date of execution of this Agreement, no event or series of events shall have occurred that reasonably could have or result in a Material Adverse Effect or a material adverse change with respect to the Company; and

 

(f) Company Deliverables. The Company shall have delivered the Company Deliverables in accordance with Section 2.3(a).

 

 

5.2. Conditions Precedent to the Obligations of the Company to Sell the Shares. The obligation of the Company to sell and issue the Shares to each Investor at the Closing is subject to the satisfaction or waiver by the Company, at or before the Closing, of each of the following conditions:

 

(a) Representations and Warranties. The representations and warranties of the Investors contained herein (a) that are not qualified by materiality, Material Adverse Effect or a similar materiality qualifier shall be true and correct in all material respects both when made and on the Closing Date with the same force and effect as if made as of the Closing Date and (b) that are qualified by materiality, Material Adverse Effect or a similar materiality qualifier shall be true and correct in all respects both when made and on the Closing Date with the same force and effect as if made as of the Closing Date, other than such representations and warranties that expressly speak only as of a specific date or time, which shall be true and correct as of such specified date or time;

 

(b) Performance. Each Investor shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by such Investor at or prior to the Closing;

 

(c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by the Transaction Documents; and

 

(d) Investor Deliverables. Each Investor shall have delivered its Investor Deliverables in accordance with Section 2.3(b).

 

ARTICLE 6.
MISCELLANEOUS

 

6.1. Fees and Expenses. 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 the Transaction Documents.

 

6.2. Termination. This Agreement may be terminated by any Investor or the Company by written notice to the other party, if the Closing has not been consummated on or before April 1, 2021; provided, however, that such termination will not affect the right of any party to sue for any breach by any other party.

 

6.3. 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 supersede all prior agreements, understandings, discussions and representations, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

 

6.4. 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 date of transmission, if such notice or communication is delivered via (i) facsimile (provided the sender receives a machine-generated confirmation of successful transmission) at the facsimile number specified in this Section or (ii) electronic mail (i.e., Email) prior to 5:30 p.m. (New York City time) on a Business Day, (b) the next Business Day after the date of transmission, if such notice or communication is delivered via (i) facsimile at the facsimile number specified in this Section or (ii) electronic mail (i.e., Email) on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, or (c) the Business Day following the date of mailing, if sent by U.S. or PRC nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given, if sent by any means other than facsimile or Email transmission. The address for such notices and communications shall be as follows:

 

If to the Company:	Taoping Inc.
	21st Floor, Everbright Bank Building
	Zhuzilin, Futian District
	Shenzhen, Guangdong 518040
	People’s Republic of China
	Attn.: President
	Facsimile: 86-755-8370-9333
	E-mail: [email protected]
If to any Investor:	To the address set forth under such Investor’s name on the signature pages hereof;

 

or such other address as may be designated in writing hereafter, in the same manner, by such Person.

 

6.5. Amendments; Waivers; No Additional Consideration. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by the Company and the Investors, in the case of a waiver, by the party against whom enforcement of any such waiver is sought. 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 either party to exercise any right hereunder in any manner impair the exercise of any such right.

 

6.6. Construction. 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. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. This Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement or any of the Transaction Documents.

 

6.7. 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 each Investor. Any Investor may assign any or all of its rights under this Agreement to any Person to whom such Investor assigns or transfers any Shares, provided that such transferee agrees in writing to be bound, with respect to the transferred Shares, by the provisions hereof that apply to the “Investor.”

 

 

6.8. No Third-Party Beneficiaries. 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 4.2.

 

6.9. Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement 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 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, employees or agents) shall be commenced exclusively in the New York Courts. Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts 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 the any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Proceeding, any claim that it is not personally subject to the jurisdiction of any such New York Court, or that such Proceeding has been commenced in an improper or inconvenient forum. Each party hereto hereby irrevocably waives personal service of process and consents to process being served in any such 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 manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Agreement or the transactions contemplated hereby. If either party shall commence a Proceeding to enforce any provisions of a Transaction Document, then the prevailing party in such Proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Proceeding.

 

6.10. Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Shares, until the second anniversary of the date hereof. The covenants contained herein shall survive the Closing until they are satisfied in full.

 

6.11. Execution. This Agreement may be executed and delivered (including by facsimile transmission and electronic mail attaching a portable document file (.pdf)) in one or more counterparts and 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 the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or electronic mail attachment, 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 electronic mail attached signature page were an original thereof.

 

 

6.12. Severability. If any provision of this Agreement is held to be invalid or unenforceable in any respect, the validity and enforceability of the remaining terms and provisions of this Agreement shall not in any way be affected or impaired thereby and the parties will attempt to agree upon a valid and enforceable provision that is a reasonable substitute therefor, and upon so agreeing, shall incorporate such substitute provision in this Agreement.

 

6.13. Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Investors 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 described in the foregoing sentence and hereby agrees to waive in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

 

6.14. Further Assurances. The parties shall execute and deliver all such further instruments and documents and take all such other actions as may reasonably be required to carry out the transactions contemplated hereby and to evidence the fulfillment of the agreements herein contained.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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.

 

	TAOPING INC.
	By:
	Name:	Jianghuai Lin
	Title:	Chief Executive Officer

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR INVESTORS FOLLOWS]

 

 

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.

 

	NAME OF INVESTOR
	Name:
	Title:
	Tax ID No. (if any): __________________________

 

	ADDRESS FOR NOTICE
	c/o: ________________________________________
	Street: ________________________________________
	City/State/Country/Zip: ________________________
	Attention: ________________________________
	Email: ________________________________________
	Tel: ________________________________________
	Fax: ________________________________________

 

	DELIVERY INSTRUCTIONS
	(if different from above)
	c/o: _______________________________________
	Street: _______________________________________
	City/State/Country/Zip: __________________________
	Attention: _______________________________________
	Tel: _______________________________________

 

 

 

Exhibit 99.1

 

 

800 3rd Ave, 11th Floor, New York, NY 10122

Tel: +1 (646) 801-2803 | Fax: +1 (212) 601-2791

www.dgipl.com

 

 

TAOP Announces $3.35 Million Registered Direct Offering of Ordinary Shares

 

SHENZHEN, Mar. 2, 2021 — Taoping Inc. (NASDAQ: TAOP, the “Company”), a provider of internet-based smart display screens, and a new-media ecosystem that enables targeted advertising and online retail, today announced that it has entered into a securities purchase agreement (the “Purchase Agreement”) with certain strategic investors (the “Investors”) on March 1, 2021.

 

Pursuant to the Purchase Agreement, the Company agreed to sell to the Investors an aggregate of 500,000 ordinary shares, no par value (the “Ordinary Shares”) at a purchase price of $6.70 per share, in a registered direct offering. The gross proceeds to the Company from the financing are $3.35 million before deducting estimated offering expenses.

 

For more details of the financing, please see the Company’s Report on Form 6-K to be filed on or about March 2, 2021.

 

The Ordinary Shares described above are being offered through a prospectus supplement pursuant to the Company’s effective shelf registration statement and the base prospectus contained therein. A shelf registration statement (SEC Filing No. 333-229323) relating to these securities has been filed with and was declared effective by the Securities and Exchange Commission (the “SEC”) on February 11, 2019. A prospectus supplement related to the offering will be filed with the SEC. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

 

About Taoping Inc.

 

Taoping Inc. (TAOP), is a leading provider of smart display terminals and solutions for targeted advertising and online retails. The Company provides the integrated end-to-end digital advertising solutions enabling customers to distribute and manage ads on cloud-based ad display screens. Connecting owners of Taoping screens, advertisers and consumers, it builds up a resource sharing “Smart IoT Screen Network- Taoping App - Taoping Go (e-Store)” media ecosystem to ultimately achieve the mission “our technology makes advertising and branding affordable and effective for everyone.” To learn more, please visit http://www.taop.com/.

 

 

 

800 3rd Ave, 11th Floor, New York, NY 10122

Tel: +1 (646) 801-2803 | Fax: +1 (212) 601-2791

www.dgipl.com

 

 

Safe Harbor Statement

 

This press release may contain certain “forward-looking statements” relating to the business of Taoping Inc., and its subsidiaries and other consolidated entities. All statements, other than statements of historical fact included herein, are “forward-looking statements” in nature within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, often identified by the use of forward-looking terminologies such as “believes”, “expects” or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company and its subsidiaries and other consolidated entities or persons acting on their behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

 

For further information, please contact:

 

Taoping Inc.

 

Chang Qiu

Email: [email protected]

http://www.taop.com/

or

 

Dragon Gate Investment Partners LLC

Tel: +1(646)-801-2803

Email: [email protected]

 

 

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