Agm Group Holdings, Inc F-3, filed Mar 5, 2020
Agm Group Holdings, Inc. (AGMH)
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM F-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
AGM Group Holdings Inc.
(Exact name of registrant as specified in its charter)
| British Virgin Islands | N/A | Not Applicable | ||
| (State or other
jurisdiction of incorporation or organization) |
(Translation of Registrant’s Name into English) |
(I.R.S. Employer Identification No.) |
c/o Creative Consultants (Hong Kong) Limited
Room 1502-3 15/F., Connaught Commercial Building, 185 Wanchai Road
Wanchai, Hong Kong
+86-010-65020507 – telephone
(Address,
including zip code, and telephone number, including
area code, of registrant’s principal executive offices)
Vcorp
Agent Services, Inc.
25 Robert Pitt Drive, Suite 204
Monsey, NY 10952
(Name, address including zip code, and telephone number, including area code, of agent for service)
Copies to:
William
S. Rosenstadt, Esq.
Mengyi “Jason” Ye, Esq.
Yarona L. Yieh, Esq.
Ortoli
Rosenstadt LLP
366 Madison Avenue, 3rd Floor
New York, NY 10017
+1-212-588-0022 – telephone
+1-212-826-9307 – facsimile
Approximate date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement as determined by the registrant.
If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box: ☐
If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒
If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. ☐
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☒
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
CALCULATION OF REGISTRATION FEE
| Title of each class of securities to be registered | Amount
to be registered (1) | Proposed
maximum aggregate price per unit (2) | Proposed
maximum aggregate offering price (3) | Amount
of registration fee (3) | ||||||||||||
| Class A ordinary shares, with par value with $0.001 | ||||||||||||||||
| Share Purchase Contracts and Share Purchase Units(4) | ||||||||||||||||
| Debt Securities(5) | ||||||||||||||||
| Warrants(6) | ||||||||||||||||
| Rights (7) | ||||||||||||||||
| Units (8) | ||||||||||||||||
| Total | $ | 100,000,000 | $ | 12,980 | ||||||||||||
| (1) | There are being registered hereunder such indeterminate number of the securities of each identified class being registered as may be sold by the registrant from time to time at indeterminate prices, with the maximum aggregate public offering price not to exceed $100,000,000. |
| (2) | The proposed maximum aggregate price per unit of each class of securities will be determined from time to time by the registrant in connection with the issuance by the registrant of the securities registered hereunder and is not specified as to each class of securities pursuant to the General Instruction II.C. of Form F-3 under the Securities Act of 1933. |
| (3) | Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933. In no event will the aggregate offering price of all securities sold by the registrant from time to time pursuant to this registration statement exceed $100,000,000. |
| (4) | Share purchase contracts to purchase Class A ordinary shares or other securities registered hereunder. Share purchase contracts may be issued separately or as share purchase units. Share purchase units may consist of a share purchase contract and debt securities, warrants, other securities registered hereunder or debt obligations of third parties, including U.S. treasury securities, securing the holders’ obligations to purchase the securities under the share purchase contracts. |
| (5) | May include senior or subordinated debt. |
| (6) | Warrants may entitle the holder to purchase our Class A ordinary shares, debt securities or any combination thereof. Warrants may be issued independently or together with Class A ordinary shares, and the warrants may be attached to or separate from such securities. |
| (7) | Rights evidencing the right to purchase Class A ordinary shares, or debt securities. |
| (8) | Each unit may consist of one or more of the other securities described in this prospectus in any combination. |
The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities and is not soliciting offers to buy these securities in any state where the offer or sale is not permitted.
Subject to completion, dated March 5, 2020
AGM Group Holdings Inc.
$100,000,000
Class A ordinary shares
Share Purchase Contracts
Share Purchase Units
Warrants
Debt Securities
Rights
Units
We may offer, from time to time, in one or more offerings, Class A ordinary shares, share purchase contracts, share purchase units, warrants, debt securities, rights or units, which we collectively refer to as the “securities”. The aggregate offering price of the securities that we may offer and sell under this prospectus will not exceed $100,000,000. We may offer and sell any combination of the securities described in this prospectus in different series, at times, in amounts, at prices and on terms to be determined at, or prior to, the time of each offering. This prospectus describes the general terms of these securities and the general manner in which these securities will be offered. We will provide the specific terms of these securities in supplements to this prospectus. The prospectus supplements will also describe the specific manner in which these securities will be offered and may also supplement, update or amend information contained in this prospectus. This prospectus may not be used to consummate a sale of securities unless accompanied by the applicable prospectus supplement. You should read this prospectus and any applicable prospectus supplement before you invest.
The securities covered by this prospectus may be offered through one or more underwriters, dealers and agents or directly to purchasers. The names of any underwriters, dealers or agents, if any, will be included in a supplement to this prospectus. For general information about the distribution of securities offered, please see “Plan of Distribution”.
Our Class A ordinary shares issued pursuant to a registration statement on Form F-1 (No. 333-218020) are traded on the Nasdaq Capital Market under the symbol “AGMH”. On February 28, 2020, the closing price of our Class A ordinary shares as reported by the Nasdaq Capital Market was $15.15 per Class A ordinary share.
Unless otherwise specified in an applicable prospectus supplement, our share purchase contracts, share purchase units, warrants, debt securities, rights and units will not be listed on any securities or stock exchange or on any automated dealer quotation system.
This prospectus may not be used to offer or sell our securities unless accompanied by a prospectus supplement. The information contained or incorporated in this prospectus or in any prospectus supplement is accurate only as of the date of this prospectus, or such prospectus supplement, as applicable, regardless of the time of delivery of this prospectus or any sale of our securities.
Investing in our securities being offered pursuant to this prospectus involves a high degree of risk. You should carefully read and consider the “Risk Factors” section of this prospectus and in the applicable prospectus supplement before you make your investment decision.
Neither the Securities and Exchange Commission, British Virgin Islands, nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2020
You should rely only on the information contained or incorporated by reference in this prospectus or any prospectus supplement. We have not authorized any person to provide you with different or additional information. If anyone provides you with different or inconsistent information, you should not rely on it. This prospectus is not an offer to sell securities, and it is not soliciting an offer to buy securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus or any prospectus supplement, as well as information we have previously filed with the SEC and incorporated by reference, is accurate as of the date on the front of those documents only. Our business, financial condition, results of operations and prospects may have changed since those dates.
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This prospectus is a part of a registration statement that we have filed with the SEC utilizing a “shelf” registration process. Under this shelf registration process, we may sell any combination of the securities described in this prospectus in one or more offerings up to an aggregate offering price of $100,000,000.
Each time we sell securities, we will provide a supplement to this prospectus that contains specific information about the securities being offered and the specific terms of that offering. The supplement may also add, update or change information contained in this prospectus. If there is any inconsistency between the information in this prospectus and any prospectus supplement, you should rely on the prospectus supplement.
We may offer and sell securities to, or through, underwriting syndicates or dealers, through agents or directly to purchasers. The prospectus supplement for each offering of securities will describe in detail the plan of distribution for that offering.
In connection with any offering of securities (unless otherwise specified in a prospectus supplement), the underwriters or agents may over-allot or effect transactions which stabilize or maintain the market price of the securities offered at a higher level than that which might exist in the open market. Such transactions, if commenced, may be interrupted or discontinued at any time. See “Plan of Distribution.”
Please carefully read both this prospectus and any prospectus supplement together with the documents incorporated herein by reference under “Incorporation by Reference” and the additional information described below under “Where You Can Get More Information.”
Prospective investors should be aware that the acquisition of the securities described herein may have tax consequences. You should read the tax discussion contained in the applicable prospectus supplement and consult your tax advisor with respect to your own particular circumstances.
You should rely only on the information contained or incorporated by reference in this prospectus and any prospectus supplement. We have not authorized anyone to provide you with different information. The distribution or possession of this prospectus in or from certain jurisdictions may be restricted by law. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted or where the person making the offer or sale is not qualified to do so or to any person to whom it is not permitted to make such offer or sale. The information contained in this prospectus is accurate only as of the date of this prospectus and any information incorporated by reference is accurate as of the date of the applicable document incorporated by reference, regardless of the time of delivery of this prospectus or of any sale of the securities. Our business, financial condition, results of operations and prospects may have changed since those dates.
Except where the context otherwise requires and for purposes of this prospectus only, “we,” “us,” “our company,” “Company,” “our” and “AGM Holdings” refer to:
| ● | AGM Group Holdings Inc. (“AGM Holdings”), a British Virgin Islands company limited by shares; |
| ● | AGM Technology Limited (“AGM HK”), a Hong Kong SAR limited company and a wholly-owned subsidiary of AGM Holdings; |
| ● | AGM Tianjing Construction Development Co., Ltd. (“AGM Tianjing”) (also referred to as 天津安高盟建设发展有限公司 in China), formerly known as Shenzhen AnGaoMeng Financial Technology Service Co., Ltd. (or 深圳安⾼盟⾦融科技服务有限公司 in China), a wholly foreign-owned enterprise (“WFOE”) formed under the laws of the People’s Republic of China (the “PRC”) and a wholly-owned subsidiary of AGM HK; |
| ● | Beijing AnGaoMeng Technology Service Co., Ltd. (“AGM Beijing”) (also referred to as 北京安⾼盟科技服务有限公司 in China), a PRC company and a wholly-owned subsidiary of AGM Tianjing; |
| ● | Nanjing XinGaoMeng Software Technology Co., Ltd. (“AGM Nanjing”) (also referred to as 南京鑫⾼盟软件科技有限公司 in China), a PRC company and a wholly-owned subsidiary of AGM Tianjing; |
| ● | AGM Software Service LTD (“AGM Software”), a British Virgin Islands company limited by shares and a wholly-owned subsidiary of AGM Holdings; |
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| ● | Anyi Network Inc. (“Anyi Network”), a Cayman Islands exempted company and a wholly-owned subsidiary of AGM Holdings; |
| ● | Anyi Technology Limited (“Anyi Technology”), a Hong Kong SAR limited company and a wholly-owned subsidiary of Anyi Network; |
| ● | Jiangsu AnYiWang Internet Technology Co., Ltd. (“Jiangsu AnYiWang”) (also referred to as 江苏安易王网络科技有限公司 in China), a WFOE formed under the PRC laws and a wholly-owned subsidiary of Anyi Technology; |
| ● | Beijing AnYiWang Technology Co., Ltd. (“Beijing AnYiWang”) (also referred to as 北京安易王科技有限公司 in China), a PRC company and a wholly-owned subsidiary of Jiangsu AnYiWang; |
| ● | Changzhou AnYiWang Internet Technology Co., Ltd. (“Changzhou AnYiWang”) (also referred to as 常州安易王网络科技有限公司 in China), a PRC company and a wholly-owned subsidiary of Jiangsu AnYiWang; |
| ● | Lianyungang AnYiWang Software Co., Ltd. (“Lianyungang AnYiWang”) (also referred to as 连云港安易王软件有限公司 in China), a PRC company and a wholly-owned subsidiary of Jiangsu AnYiWang; |
| ● | Tongshan Naquan Technology Services Co., Ltd. (“Tongshan Naquan”) (also referred to as 通山纳全科技服务有限公司 in China), a PRC company and a wholly-owned subsidiary of Jiangsu AnYiWang; and |
| ● | Hubei AnYiWang Internet Technology Co., Ltd. (“Hubei AnYiWang”) (also referred to as 湖北安易王网络科技有限公司 in China), a PRC company and a wholly-owned subsidiary of Beijing AnYiWang. |
We have relied on statistics provided by a variety of publicly available sources regarding China’s expectations of growth. We did not, directly or indirectly, sponsor or participate in the publication of such materials, and these materials are not incorporated in this prospectus other than to the extent specifically cited in this prospectus. We have sought to provide current information in this prospectus and believe that the statistics provided in this prospectus remain up-to-date and reliable, and these materials are not incorporated in this prospectus other than to the extent specifically cited in this prospectus.
We qualify as an “emerging growth company,” as defined in the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and regulatory requirements in contrast to those otherwise applicable generally to public companies. These provisions include, but are not limited to, an exemption from the auditor attestation requirement in the assessment of our internal control over financial reporting pursuant to Section 404 the Sarbanes-Oxley Act of 2002.
We may take advantage of these reduced reporting and other regulatory requirements for up to five years or such earlier time that we are no longer an emerging growth company. We would cease to be an emerging growth company if we have more than $1.07 billion in annual revenue, become a “large accelerated filer” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or issue more than $1.0 billion of non-convertible debt over a three-year period. In addition, the JOBS Act provides that an emerging growth company may delay adopting new or revised accounting standards until those standards apply to private companies.
We are a “foreign private issuer” as defined in Rule 3b-4 under the Securities Exchange Act of 1934, as amended, or the Exchange Act. As a result, our proxy solicitations are not subject to the disclosure and procedural requirements of Regulation 14A under the Exchange Act and transactions in our equity securities by our officers and directors are exempt from Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file periodic reports and financial statements as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
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Recent Development
Incorporated on April 27, 2015, under the laws of the British Virgin Islands (“BVI”), we originally positioned ourselves as a financial technology company and financial trading solutions provider, focused on delivering innovative trading platform solutions and technologies that enable small to mid size brokers and institutional clients to have a better client experience solution that includes mobile app and desktop terminal. During 2017 and 2018, our solutions mainly focused on foreign exchange (FX) as main trading instruments to our trading platform solution. Our business clients use our solutions to offer FX trading solutions to their end-users. We successfully developed a suite of software and website services, including multi-terminal broker CRM, multi-account trading management system, social trading system and mobile applications.
The global regulation towards FX trading changed dramatically during 2018, which led to the decrease of the number of business clients and the disconnection of our FX brokerage business, as further described in “Disconnection Business”. Nevertheless, our solutions that cover FX trading can be converted into trading systems for other financial instruments, especially the social trading system and mobile applications which have many unique and user-friendly features. During 2019, we successfully integrated our legacy system with exchange based futures instruments and gold instruments of PRC China. These solutions are fully in compliance with PRC local regulation. We believe it will become a competitive solution for futures traders and gold traders in China market.
Additionally, we developed an online trading education website. This website also derived from our legacy social trading system, which targets users who would like to learn basic financial trading knowledge, especially in trading financial instruments and trading software. Users can access contents created by our team members and third-party content providers. It also provides trading simulator and competitive models in social trading, offering users real-time practice environment with incentives. We charge a subscription fee for using our online education database. We also generate revenue by hosting contests and uploading content sponsored by financial institutes.
We plan to start marketing the above two newly developed services in 2020.
We also expanded our services to other type of software through an acquisition of an accounting and ERP software company, Anyi Networks. On July 26th, 2019, AGM Holdings entered into a Share Exchange Agreement (the “Anyi Agreement”) with Anyi Network and the shareholders of Anyi Network.
Pursuant to the Anyi Agreement, the shareholders of Anyi Network agreed to sell, transfer, convey, assign and deliver 100% equity interest of Anyi Network to AGM Holdings, and in consideration therefor, AGM Holdings agreed to pay $400,000 in cash and to issue an aggregate of 475,000 Class A ordinary shares of AGM Holdings to the shareholders of Anyi Network. Anyi Network is a software developer company, engaging in the development and sale of enterprise application software, including accounting software and Enterprise Resource Planning (ERP) software, and the software-related after-sales services in the PRC.
Currently as a software company, substantially all of our business operations and research and development are conducted in the China. Also, substantially all of our employees are located in China. Our team is comprised of a group of people who are experienced in the areas of finance, IT, software R&D and marketing. We will continue optimizing our corporate and team structure according to our business development, including marketing results and investment.
In January 2020, AGM Tianjing entered into an Equity Transfer Agreement (the “Kingo Agreement”) with the shareholders of Yushu Kingo City Real Estate Development Co., Ltd. (“Yushu Kingo”). Yushu Kingo is a limited liability company established in PRC on December 18, 2013 and is engaged in real estate development and property management. Yushu Kingo is currently developing a commercial complex in Yushu City, which is estimated to be completed in late 2020 and is expected to cover an area of 60,000 square meters and have a floor area of 120,000 square meters.
Pursuant to the Kingo Agreement, all the shareholders of Yushu Kingo agreed to transfer 100% equity of Yushu Kingo to AGM Tianjing, and AGM Tianjing agreed to pay US$20 million in cash and cause AGM Holdings to issue an aggregate of 2,000,000 Class A ordinary shares of AGM Holdings valued at US$15.00 per ordinary share to the shareholders of the Yushu Kingo. The transaction is expected to close during the first quarter of 2020, if there is no force majeure.
Yushu Kingo will own and manage the commercial units in the commercial complex that it is being developed, which are expected to generate no less than 4% of its annual rental income based on self-owning commercial unit and generate revenue through sales of commercial unit. We form our rental income expectation based on Easyhome Franchise Contract and its Supplement Agreement signed between the Property Management Company of Yushu Kingo and Changchun Easyhome Business Management Co., Ltd.
To expand our business scope, we acquired Yushu Kingo. We have the following financial consideration for the acquisition: 1) the acquisition will increase the total asset and equity of the company; 2) the financial improvement on equity and asset can help the AGM Holdings and its subsidiaries in China reach more financial resources from local financial institutions, for instance as we may use commercial complex as collateral assets for loan or credit enhancement for funding other project; and 3) the additional revenue and profit from Yushu Kingo can provide additional financial cushion to our software business.
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History and Structure of the Company
The following is a chart illustrating our corporate structure:
AGM Holdings was incorporated on April 27, 2015 under the laws of the British Virgin Islands (“BVI”).
AGM HK was incorporated on May 21, 2015 under the law of Hong Kong. AGM HK is a wholly-owned subsidiary of AGM Holdings. Its principal activities include providing our Fintech software solutions and trading education software and website service to customers.
AGM Tianjing (previously AGM Shenzhen) was incorporated on October 13, 2015 in Shenzhen under the laws of the People’s Republic of China. It was relocated to Tianjing and renamed as a “construction development” company instead of a “financial technology service” company in September 2019. We chose to relocate because the city of Tianjing is closer to our R&D center at AGM Beijing. Additionally, the new name better suits the company’s business need. AGM Tianjing serves as the holding company and does not conduct actual business.
AGM Beijing was incorporated on November 13, 2015 in Beijing under the laws of the People’s Republic of China. AGM Beijing is a wholly-owned subsidiary of AGM Tianjing. Its principal activities include software design, technology transfer, technology consulting, technology promotion and data processing. AGM Beijing holds an ICP filing for our online trading platform and education programs. AGM Beijing was incorporated in Beijing because almost all of our employees are located in Beijing. In order to comply with PRC’s labor law regarding employee’s social benefits, which are regulated separately in each city or province, it is more practical for us to move our office to Beijing so that we can pay for the employees’ social benefits with the local government agency, since each city or province has its own labor laws regarding employee’s social benefits.
AGM Nanjing was incorporated on September 28, 2016 in Nanjing under the laws of the People’s Republic of China. AGM Nanjing is a wholly-owned subsidiary of AGM Tianjing. Its principal activities include software design, technology transfer, technology consulting, technology promotion and data processing.
AGM Software was incorporated on June 14, 2017 under the laws of BVI. AGM Software is a wholly-owned subsidiary of AGM Holdings and its principal activity will be assisting AGM HK in providing our core technology services to customers.
On July 26th, 2019, AGM Holdings acquired 100% of the equity interest in Anyi Network, and in consideration therefor, AGM Holdings paid $400,000 in cash and issued an aggregate of 475,000 Class A ordinary shares of AGM Holdings to the shareholders of Anyi Network.
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Anyi Network was incorporated in the Cayman Islands on October 4, 2017. It is a software developer that engages in the development and sale of enterprise application software, including accounting software and Enterprise Resource Planning (ERP) software, and the software-related after-sales services in the PRC.
Anyi Network has the following subsidiaries:
Anyi Technology was incorporated on October 23, 2017 under the laws of Hong Kong SAR. It is a wholly-owned subsidiary of Anyi Network. Anyi Network is currently not engaging in any active business and is acting as a holding company.
Jiangsu AnYiWang was incorporated on November 13, 2017 in Nanjing under the laws of the People’s Republic of China. It is a wholly-owned subsidiary of Anyi Technology and a wholly foreign-owned entity under the PRC laws.
Beijing AnYiWang was incorporated on January 2, 2018 in Beijing under the laws of the People’s Republic of China. It is wholly-owned subsidiary of Jiangsu AnYiWang. Beijing AnYiWang is engaged in technology and software development, sales and distribution, technical services, data processing, and computer system services in Beijing and neighboring provinces.
Changzhou AnYiWang was incorporated on November 27, 2017 in Changzhou under the laws of the People’s Republic of China. It is wholly-owned subsidiary of Jiangsu AnYiWang. Changzhou AnYiWang is engaged in technology and software development, sales and distribution, technical services, data processing, and computer system services in Changzhou and neighboring cities.
Lianyungang AnYiWang was incorporated on November 20, 2017 in Haizhou under the laws of the People’s Republic of China. It is a wholly-owned subsidiary of Jiangsu AnYiWang. Lianyungang AnYiWang is engaged in technology and software development, sales and distribution, technical services, data processing, and computer system services in Lianyungang and neighboring cities.
Tongshan Naquan was incorporated on May 3, 2018 in Tongshan under the laws of the People’s Republic of China. Tongshan Naquan is engaged in technology and software development, sales and distribution, technical services, data processing, and computer system services in Tongshan and neighboring cities.
Hubei AnYiWang was incorporated on March 8, 2018 in Xiaogan under the laws of the People’s Republic of China. It is a wholly-owned subsidiary of Beijing AnYiWang. Hubei AnYiWang is engaged in technology and software development, sales and distribution, technical services, data processing, and computer system services in Hubei Province and neighboring provinces.
Our Products and Services
We position ourselves as a software company, currently conducting three main business: 1) fintech software, 2) trading education software and website service, and 3) accounting and ERP software.
Fintech software
We provide social trading software and multi-accounting trading management system to small and mid-size broker and institutional clients. We developed our first version of China exchange-based futures/commodity trading software in September 2019. We aim to offer to small and medium sized financial institutions in China with solutions that could enhance the offering they provide to their end-users. We have conducted trials among a small group of users and are improving the software based on the feedbacks. We plan to charge subscription fee for the trading software.
Trading education software and website service
We have developed a subscription based and interactive trading education website that can be used by brokers as a white-label system. We charged brokers monthly fees.
We will also launch our own online trading education website under our brand name in the first quarter of 2020 through our subsidiaries, AGM HK and AGM Beijing. Our target users include people interested in learning basic financial trading knowledge, especially in trading financial instruments and in trading markets. Users can access contents created by our team members and third-party content providers. Our solution also provides trading simulator, offering users with real-time practice environment. For our own education brand, we charge a subscription fee to our online education users. We can also generate revenue by hosting contests and uploading content sponsored by financial institutes.
Accounting and ERP software
Through Anyi Network, we provide accounting and ERP software. Anyi currently offers seven accounting and ERP software, designed according to different accounting principles for different industries and entity types. Anyi also provides a free version for each of its accounting and ERP software that targets small and medium-sized enterprises (SMEs). Users have access to all the tools and functions in the free version, expect that the work volume is limited. For example, the free version supports the management of 100 accounting documents, 300 types of inventory and 10 employees, whereas the full version supports more entries and the premium version supports unlimited entries. The free versions give potential users a trial of its products. The users will purchase the full version and the premium version if their entity size and other factors require so. The free versions also help Anyi increase its market share.
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Anyi also offers technical support as an after-sales service to its customers. Anyi considers customer service as a key to build brand equity and customer loyalty. Such technical support includes installation and testing services, software repair and upgrade services, software maintenance services, data conversion and other general enquiry assistance.
Discontinued Business
FX trading brokerage business
Prior to September 5, 2018, we owned 100% equity interest in AGM Group Ltd. (“AGM Belize”), a Belize corporation, through which we engaged in the FX trading brokerage service with a license provided by the International Financial Services Commission of Belize (“IFSC”) under the license number IFSC/60/448/FX/17 (the “IFSC License”). AGM Belize also operated a social trading network platform under the name of AGMTrade.
Aggregate revenue generated from AGM Belize’s services accounted for approximately 2.5% (1.5% of change from 1% due to reclassification) and 11% (including service of 6% and trading of 5%) of the Company’s total revenue in fiscal years ended December 31, 2017 and 2016, respectively. AGM Belize held approximately $15.9 million in assets (including approximately $12.5 million categorized as transaction monetary assets held for clients) and $14.2 million in liabilities (including approximately $12.5 million categorized as deposits payable, which offset the total transaction monetary assets held for clients) as of December 31, 2017. AGM Belize’s assets and liabilities consisted of approximately 64% and 85% of the Company’s total assets and liabilities, respectively, with customers deposits consisting of the majority of such.
In September 2018, the central government of the People’s Republic of China initiated a certain policy change that would no longer support local Chinese clients/users to trade FX with offshore regulated body. In order to ensure compliance with PRC laws, regulations and policies, the Company voluntarily ceased its FX trading brokerage business and suspended such activities on AGMTrade.
On September 5, 2018, we and our previous Chairman, Zhentao Jiang, entered into an equity acquisition agreement pursuant to which we agreed to sell to Jiang a 90% equity interest in AGM Belize for $450,000, which is 90% of AGM Belize’s estimated value of $500,000. The transaction has been duly authorized by our shareholders, audit committee and the board of directors, and has been approved by the Belize Registry and The Nasdaq Stock Market LLC. Upon consummation of the Transaction, we maintain a 10% equity interest in AGM Belize to continue to hold the IFSC License.
As a result, we no longer engage in and does not expect to generate any revenue from the FX trading brokerage business, including AGMTrade.
Online FX Trading Service
Prior to September 2018, we, through AGM Belize, hold licenses to a core trading platform known as the MetaTrader. Due to the same legal compliance reasons, we have discontinued the online FX trading service since September 2018.
Aggregate revenue generated from online trading services accounted for 91%, 97.5% (1.5% of change from 99% due to reclassification) and 89% of all the total revenue in fiscal year 2018, 2017 and 2016, respectively.
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You should carefully consider the risks incorporated by reference in this prospectus before making an investment decision. You should also consider the matters described below and in “Risk Factors” in “Item 3. Key Information—D. Risk factors” in our Annual Report, as amended, on Form 20-F for the year ended December 31, 2018, and all of the information included or incorporated by reference in this prospectus before deciding whether to purchase our ordinary shares. Our business, financial condition and results of operations could be materially and adversely affected by any of these risks or uncertainties. In that case, the trading price of our ordinary shares could decline, and you may lose all or part of your investment. The risks also include forward-looking statements and our actual results may differ substantially from those discussed in these forward-looking statements. See “Special Notice Regarding Forward-Looking Statements.”
The nature of our accounting and ERP software business requires the application of complex revenue and expense recognition rules and the current legislative and regulatory environment affecting Chinese generally accepted accounting principles is uncertain. Significant changes in current principles could affect our financial statements going forward and changes in financial accounting standards or practices may cause adverse, unexpected financial reporting fluctuations and harm our operating results.
The accounting rules and regulations that we must comply with are complex and subject to interpretation by the Ministry of Finance, the China Securities Regulatory Commission and various bodies formed to promulgate and interpret appropriate accounting principles. We cannot predict the impact of future changes to accounting principles or our accounting policies on our financial statements going forward, which could have a significant effect on our reported financial results, and could affect the reporting of transactions completed before the announcement of the change. In addition, if we were to change our critical accounting estimates, including those related to the recognition of license revenue and other revenue sources, our operating results could be significantly affected.
Any failure to offer high-quality product support may adversely affect our relationships with our customers and our financial results.
In deploying and using our solutions, our customers depend on our support services team to resolve complex technical and operational issues. We may be unable to respond quickly enough to accommodate short-term increases in customer demand for product support. We also may be unable to modify the nature, scope and delivery of our product support to compete with changes in product support services provided by our competitors. Increased customer demand for product support, without corresponding revenue, could increase costs and adversely affect our operating results. Our sales are highly dependent on our business reputation and on positive recommendations from our existing customers. Any failure to maintain high-quality product support, or a market perception that we do not maintain high-quality product support, could adversely affect our reputation, our ability to sell our solutions to existing and prospective customers, our business, operating results, and financial position.
We might require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all.
We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges, including the need to develop new features or enhance our existing solutions, improve our operating infrastructure or acquire complementary businesses and technologies. Accordingly, we may need to engage in equity or debt financings to secure additional funds. If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences and privileges superior to those of holders of our ordinary shares. Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. In addition, we may not be able to obtain additional financing on terms favorable to us, or at all. If we are unable to obtain adequate financing or financing on terms satisfactory to us, when we require it, our ability to continue to support our business growth and to respond to business challenges could be significantly impaired.
Uncertainties with respect to the PRC legal system could materially and adversely affect us.
The PRC legal system is a civil law system based on written statutes. Unlike the common law system, prior court decisions under the civil law system may be cited for reference but have limited precedential value.
In 1979, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past three decades has significantly enhanced the protections afforded to various forms of foreign investments in China. However, China has not developed a fully integrated legal system, and recently enacted laws and regulations may not sufficiently cover all aspects of economic activities in China. In particular, the PRC legal system is based on written statutes and prior court decisions have limited value as precedents. Since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules may not be uniform and enforcement of these laws, regulations and rules involves uncertainties. These uncertainties may affect our judgment on the relevance of legal requirements and our ability to enforce our contractual rights or tort claims. In addition, the regulatory uncertainties may be exploited through unmerited or frivolous legal actions or threats in attempts to extract payments or benefits from us. Furthermore, the PRC legal system is based in part on government policies and internal rules, some of which are not published on a timely basis or at all and may have a retroactive effect. As a result, we may not be aware of our violation of any of these policies and rules until sometime after the violation. In addition, any administrative and court proceedings in China may be protracted, resulting in substantial costs and diversion of resources and management attention.
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In particular, PRC laws and regulations concerning the businesses that we are involved in are developing and evolving. Although we have taken measures to comply with the laws and regulations that are applicable to our business operations and avoid conducting any non-compliant activities under the applicable laws and regulations, the PRC governmental authorities may promulgate new laws and regulations regulating the industry in the future. We cannot assure you that our practice would not be deemed to violate any new PRC laws or regulations relating to the industry. Moreover, developments in the industry may lead to changes in PRC laws, regulations and policies or in the interpretation and application of existing laws, regulations and policies that may limit or restrict online reading marketplaces like us, which could materially and adversely affect our business and operations.
Our financial and operating performance may be adversely affected by epidemics, natural disasters and other catastrophes.
Our business could be materially and adversely affected by the outbreak of epidemics including but not limited to the 2019 novel coronavirus (COVID-19), swine influenza, avian influenza, middle east respiratory syndrome (MERS-CoV) and severe acute respiratory syndrome (SARS-CoV). Our financial and operating performance may be adversely affected by epidemics such as the on-going COVID-19, natural disasters and other catastrophes. As a result of the on-going novel coronavirus, we expect our operation to experience slowdown or temporary suspension in production. Our business could be materially and adversely affected in the event that the slowdown or suspension carries for a long period of time. During such epidemic outbreak, China may adopt certain hygiene measures, including quarantining visitors from places where any of the contagious diseases were rampant. Those restrictive measures adversely affected and slowed down the national economic development during that period. Any prolonged restrictive measures in order to control the contagious disease or other adverse public health developments in China or our targeted markets may have a material and adverse effect on our business operations.
Similarly, natural disasters, wars (including the potential of war), terrorist activity (including threats of terrorist activity), social unrest and heightened travel security measures instituted in response, and travel-related accidents, as well as geopolitical uncertainty and international conflict, will affect travel volume and may in turn have a material adverse effect on our business and results of operations. In addition, we may not be adequately prepared in contingency planning or recovery capability in relation to a major incident or crisis, and as a result, our operational continuity may be adversely and materially affected, which in turn may harm our reputation.
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SPECIAL NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. All statements contained in this prospectus other than statements of historical fact, including statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the “Risk Factors” section. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.
You should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward- looking statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required by applicable law, we undertake no duty to update any of these forward-looking statements after the date of this prospectus or to conform these statements to actual results or revised expectations.
Our capitalization and indebtedness will be set forth in a prospectus supplement or in a report on Form 6-K subsequently furnished to the SEC and specifically incorporated herein by reference.
Unless we otherwise indicate in a prospectus supplement, we currently intend to use the net proceeds from the sale of our securities for general corporate purposes.
More detailed information regarding the use of proceeds from the sale of securities, including any determinable milestones at the applicable time, will be described in any applicable prospectus supplement. We may also, from time to time, issue securities otherwise than pursuant to a prospectus supplement to this prospectus.
Our dividend policy is set forth under the heading “Item 8.A. Consolidated Statements and Other Financial Information” in our Annual Report, as amended, on Form 20-F for the year ended December 31, 2018, which is incorporated in this prospectus by reference, as updated by our subsequent filings under the Exchange Act.
We may offer and issue from time to time Class A ordinary shares, share purchase contracts, share purchase units, warrants, debt securities, rights or units, or any combination thereof, up to an aggregate offering price of up to $100,000,000 in one or more transactions under this shelf prospectus. The price of securities offered will depend on a number of factors that may be relevant at the time of offer. See “Plan of Distribution.”
The Class A ordinary shares have been listed on the Nasdaq Capital Market under the symbol “AGMH” since April 20, 2018.
The following tables sets forth, for the periods indicated, the high and low trading prices of the Class A ordinary shares as reported on the Nasdaq Capital Market prior to the filing of this prospectus.
Class A ordinary shares (Nasdaq symbol: “AGMH”)
| Market Price Per Share | |||||||||
| High | Low | ||||||||
| Quarterly: | |||||||||
| July 1, 2018 to September 30, 2018 | $ | 39.00 | $ | 12.34 | |||||
| October 1, 2018 to December 31, 2018 | $ | 52.00 | $ | 18.00 | |||||
| January 1, 2019 to March 31, 2019 | $ | 35.90 | $ | 18.05 | |||||
| April 1, 2019 to June 30, 2019 | $ | 20.94 | $ | 12.46 | |||||
| July 1, 2019 to September 30, 2019 | $ | 19.40 | $ | 14.06 | |||||
| October 1, 2019 to December 31, 2019 | $ | 24.49 | $ | 13.95 | |||||
| January 1, 2020 to March 31, 2020 (until February 28, 2020) | $ | 17.55 | $ | 14.63 | |||||
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AGM Holdings was incorporated on April 27, 2015 under the BVI Business Companies Act, 2004 (the “BVI Act”) as a company limited by shares. As at the date of this prospectus, the Company is authorized to issue 200,000,000 Class A ordinary shares of $0.001 par value per share and 200,000,000 Class B ordinary shares of $0.001 par value per share. As of the date of this prospectus, there are 21,791,055 Class A ordinary shares and 7,100,000 Class B ordinary shares issued and outstanding.
Our memorandum and articles of association do not permit a director to decide what compensation he or she will receive. All decisions about the compensation of directors will be recommended by the compensation committee, upon its formation, and approved by the board of directors as a whole, both acting only when a quorum of members is present.
The following are summaries of the material provisions of our memorandum and articles of association that will be in force at the time of the closing of this offering and the BVI Act insofar as they relate to the material terms of our Class A ordinary shares. Copies of our memorandum and articles of association are filed as exhibits to the registration statement of which this prospectus is a part.
Class A Ordinary Shares
General
Each Class A ordinary share in the Company confers upon the shareholder:
| ● | the right to one vote at a meeting of the shareholders of the Company or on any resolution of shareholders; |
| ● | the right to an equal share in any dividend paid by the Company; and |
| ● | the right to an equal share in the distribution of the surplus assets of the Company on its liquidation. |
All of our issued Class A ordinary shares are fully paid and non-assessable. Certificates representing the Class A ordinary shares are issued in registered form. Our shareholders who are non-residents of the British Virgin Islands may freely hold and vote their Class A ordinary shares.
Class B Ordinary Shares
General
Each Class B ordinary share in the Company confers upon the shareholder the right to five votes at a meeting of the shareholders of the Company or on any resolution of shareholders.
Each Class B ordinary share may not be sold, assigned, transferred, alienated, commuted, anticipated, or otherwise disposed of (including by will or the laws of descent and distribution), or pledged or hypothecated as collateral for a loan or as security for the performance of any obligation, or be otherwise encumbered, and are not subject to attachment, garnishment, execution or other legal or equitable process, and any attempt to do so shall be null and void.
Each Class B ordinary share shall only be issued to Company’s or its subsidiaries’ employees or those entities of which its principal shareholder is an employee of the Company or its subsidiaries. Shareholder’s termination of employment with the Company or its subsidiaries shall immediately result in the cancellation of any and all issued and outstanding shares of Class B ordinary shares held by such shareholder on the date of termination.
Sale, assignment, transfer, alienation, or otherwise disposition of any Class A ordinary shares by common shareholder of Class B ordinary shares shall immediately result in the cancellation of an equal number of Class B ordinary shares on the date of such disposition.
Shareholder(s) of Class B ordinary shares in the Company shall not:
| ● | receive the right to any dividend paid by the Company; | |
| ● | receive the right to any distribution of the surplus assets of the Company on its liquidation. |
Transfer Agent and Registrar
The transfer agent and registrar for the Class A ordinary shares is VStock Transfer, LLC, 18 Lafayette Pace, Woodmere, NY 11598.
Distributions
The holders of our Class A ordinary shares are entitled to such dividends or other distributions as may be authorized by our board of directors, subject to the BVI Act and our memorandum and articles of association.
Voting rights of shareholders
Any action required or permitted to be taken by the shareholders must be taken at a duly called meeting of the shareholders entitled to vote on such action. At each meeting of shareholders, each shareholder who is present in person or by proxy (or, in the case of a shareholder being a corporation, by its duly authorized representative) will have one vote for each Class A ordinary share or five votes for each Class B ordinary share which such shareholder holds. An action that may be taken by the shareholders at a meeting may also be taken by a resolution of shareholders consented to in writing.
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Election of directors
Delaware law permits cumulative voting for the election of directors only if expressly authorized in the certificate of incorporation. The laws of the British Virgin Islands do not specifically prohibit or restrict the creation of cumulative voting rights for the election of our directors. Cumulative voting is not a concept that is accepted as a common practice in the British Virgin Islands, and we have made no provisions in our memorandum and articles of association to allow cumulative voting for elections of directors.
Meetings of shareholders
Any of our directors may convene a meeting of shareholders at any time and in any manner and place the director considers necessary or desirable. The director convening a meeting must give not less than 7 days’ notice of the meeting to those persons whose names appear as shareholders in the register of shareholders on the date of the notice and are entitled to vote at the meeting, and the other directors. Our board of directors must convene a meeting of shareholders upon the written request of shareholders entitled to exercise 30% or more of the voting rights in respect of the matter for which the meeting is requested within 28 days of receiving the written request. A meeting of shareholders held in contravention of the requirement to give notice is valid if shareholders holding at least 90% of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a shareholder at the meeting shall constitute waiver in relation to all the shares which that shareholder holds.
The quorum for a meeting of shareholders is duly constituted if, at the beginning of the meeting, there are present in person or by proxy not less than 50% of the votes of the shares (or class or series of shares) entitled to vote on the resolutions to be considered at the meeting. A quorum may comprise a single shareholder or proxy. If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of the shareholders, will be dissolved. In any other case it will stand adjourned to the next business day in the jurisdiction in which the meeting was to have been held at the same time and place or to such other time and place as the directors may determine and, if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not less than one third of the votes of the shares or each class or series of shares entitled to vote on the matter to be considered by the meeting, those present will constitute a quorum but otherwise the meeting will be dissolved.
A person other than an individual which is a shareholder may, by a resolution of its directors or other governing body, authorize any individual it thinks fit to act as its representative at any meeting of shareholders. The duly authorized representative shall be entitled to exercise the same powers on behalf of the person which he or she represents as that person could exercise if it were an individual shareholder.
Meetings of directors
Our business and affairs are managed by our board of directors, who will make decisions by voting on resolutions of directors. Our directors are free to meet at such times and in such manner and places within or outside the BVI as the directors determine to be necessary or desirable. A director must be given not less than 3 days’ notice of a meeting of directors. At any meeting of directors, a quorum will be present if not less than one half of the total number of directors is present, unless there are only 2 directors in which case the quorum is 2. An action that may be taken by the directors at a meeting may also be taken by a resolution of directors consented to in writing by a majority of the directors.
Protection of minority shareholders
We would normally expect British Virgin Islands courts to follow English case law precedents, which would permit a minority shareholder to commence a representative action, or derivative actions in our name, to challenge (1) an act which is ultra vires or illegal, (2) an act which constitutes a fraud against the minority by parties in control of us, (3) an infringement of individual rights of the minority shareholder, such as the right to vote and pre-emptive rights, and (4) an irregularity in the passing of a resolution which requires a special or extraordinary majority of the shareholders.
Pre-emptive rights
There are no pre-emptive rights applicable to the issue by us of new Class A ordinary shares under either British Virgin Islands law or our memorandum and articles of association.
Transfer of Class A ordinary shares
Subject to the restrictions in our memorandum and articles of association and applicable securities laws, any of our shareholders may transfer all or any of his or her Class A ordinary shares by written instrument of transfer signed by the transferor and containing the name and address of the transferee. Our board of directors may not resolve to refuse or delay the transfer of any Class A ordinary shares the shareholder has failed to pay an amount due in respect of the Class A ordinary shares.
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Liquidation
If we are wound up and the assets available for distribution among our shareholders are more than sufficient to repay all amounts paid to us on account of the issue of shares immediately prior to the winding up, the excess shall be distributable pari passu among those shareholders in proportion to the amount paid up immediately prior to the winding up on the shares held by them, respectively. If we are wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the amounts paid to us on account of the issue of shares, those assets shall be distributed so that, to the greatest extent possible, the losses shall be borne by the shareholders in proportion to the amounts paid up immediately prior to the winding up on the shares held by them, respectively. If we are wound up, the liquidator appointed by us may, in accordance with the BVI Act, divide among our shareholders in specie or kind the whole or any part of our assets (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as the liquidator deems fair upon any property to be divided and may determine how such division shall be carried out as between the shareholders or different classes of shareholders.
Calls on Class A ordinary shares and forfeiture of Class A ordinary shares
Our board of directors may from time to time make calls upon shareholders for any amounts unpaid on their Class A ordinary shares in a written notice served to such shareholders at least 14 days prior to the specified date of payment. Where such a notice has been issued and its requirements have not been complied with, the directors may, at any time before the tender of payment, forfeit and cancel the Class A ordinary shares to which the notice relates.
Issuance of Class A ordinary shares
Subject to the provisions of the BVI Act, our board of directors may authorize the issuance of Class A ordinary shares at such times, to such persons, for such consideration and on such terms as they may determine by a resolution of directors, subject to the BVI Act, our memorandum and articles of association and any applicable requirements imposed from time to time by the SEC, The Nasdaq Capital Market, or by any recognized stock exchange on which our securities are listed.
Redemption of Class A ordinary shares
Subject to the provisions of the BVI Act and our memorandum and articles of association, we may not redeem Class A ordinary shares held by a shareholder without the consent of that shareholder whose Class A ordinary shares are to be redeemed.
Variation of rights
All or any of the rights attached to any class of shares may, subject to the provisions of the BVI Act, only be varied with the consent in writing of, or pursuant to a resolution passed at a meeting by, the holders of more than 50% of the issued shares of that class.
Changes in the number of shares we are authorized to issue and those in issue
We may from time to time by resolution of our board of directors:
| ● | amend our memorandum of association to increase or decrease the maximum number of shares we are authorized to issue; | |
| ● | subject to our memorandum of association, divide our authorized and issued shares into a larger number of shares; and | |
| ● | subject to our memorandum of association, combine our authorized and issued shares into a smaller number of shares. |
Inspection of books and records
Under the BVI Act, holders of our Class A ordinary shares are entitled, upon giving written notice to us, to inspect (i) our memorandum and articles of association, (ii) the register of shareholders, (iii) the register of directors and (iv) the minutes of meetings and resolutions of shareholders, and to make copies and take extracts from these documents and records. However, our directors can refuse access if they are satisfied that to allow such access would be contrary to our interests. See “Where You Can Find Additional Information.”
Rights of non-resident or foreign shareholders
There are no limitations imposed by our memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on our shares. In addition, there are no provisions in our memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.
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The following description, together with the additional information we may include in any applicable prospectus supplements, summarizes the material terms and provisions of the warrants that we may offer under this prospectus and the related warrant agreements and warrant certificates. While the terms summarized below will apply generally to any warrants that we may offer under this prospectus, we will describe the particular terms of any series of warrants that we may offer in more detail in the applicable prospectus supplement. If we indicate in the prospectus supplement, the terms of any warrants offered under that prospectus supplement may differ from the terms described below. However, no prospectus supplement shall fundamentally change the terms that are set forth in this prospectus or offer a security that is not registered and described in this prospectus at the time of its effectiveness. Specific warrant agreements will contain additional important terms and provisions and will be incorporated by reference as an exhibit to the registration statement that includes this prospectus or as an exhibit to a report filed under the Exchange Act.
General
We may issue warrants that entitle the holder to purchase Class A ordinary shares, debt securities or any combination thereof. We may issue warrants independently or together with Class A ordinary shares, debt securities or any combination thereof, and the warrants may be attached to or separate from these securities.
We will describe in the applicable prospectus supplement the terms of the series of warrants, including:
| ● | the offering price and aggregate number of warrants offered; | |
| ● | the currency for which the warrants may be purchased, if not United States dollars; | |
| ● | if applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued with each such security or each principal amount of such security; | |
| ● | if applicable, the date on and after which the warrants and the related securities will be separately transferable; | |
| ● | in the case of warrants to purchase Class A ordinary shares, the number of Class A ordinary shares purchasable upon the exercise of one warrant and the price at which these shares may be purchased upon such exercise; | |
| ● | in the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one warrant and the price at, and currency, if not United States dollars, in which, this principal amount of debt securities may be purchased upon such exercise; | |
| ● | the effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants; | |
| ● | the terms of any rights to redeem or call the warrants; | |
| ● | any provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants; | |
| ● | the dates on which the right to exercise the warrants will commence and expire; | |
| ● | the manner in which the warrant agreement and warrants may be modified; | |
| ● | federal income tax consequences of holding or exercising the warrants; | |
| ● | the terms of the securities issuable upon exercise of the warrants; and | |
| ● | any other specific terms, preferences, rights or limitations of or restrictions on the warrants. |
Before exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such exercise, including:
| ● | in the case of warrants to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest on, the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture; or | |
| ● | in the case of warrants to purchase our Class A ordinary shares, the right to receive dividends, if any, or, payments upon our liquidation, dissolution or winding up or to exercise voting rights, if any. |
Exercise of Warrants
Each warrant will entitle the holder to purchase the securities that we specify in the applicable prospectus supplement at the exercise price that we describe in the applicable prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement, holders of the warrants may exercise the warrants at any time up to the specified time on the expiration date that we set forth in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants will become void.
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Holders of the warrants may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together with specified information, and paying the required amount to the warrant agent in immediately available funds, as provided in the applicable prospectus supplement. We will set forth on the reverse side of the warrant certificate and in the applicable prospectus supplement the information that the holder of the warrant will be required to deliver to the warrant agent.
Upon receipt of the required payment and the warrant certificate properly completed and duly executed at the corporate trust office of the warrant agent or any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities purchasable upon such exercise. If fewer than all of the warrants represented by the warrant certificate are exercised, then we will issue a new warrant certificate for the remaining amount of warrants. If we so indicate in the applicable prospectus supplement, holders of the warrants may surrender securities as all or part of the exercise price for warrants.
Enforceability of Rights by Holders of Warrants
Each warrant agent will act solely as our agent under the applicable warrant agreement and will not assume any obligation or relationship of agency or trust with any holder of any warrant. A single bank or trust company may act as warrant agent for more than one issue of warrants. A warrant agent will have no duty or responsibility in case of any default by us under the applicable warrant agreement or warrant, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us. Any holder of a warrant may, without the consent of the related warrant agent or the holder of any other warrant, enforce by appropriate legal action its right to exercise, and receive the securities purchasable upon exercise of, its warrants.
Warrant Agreement Will Not Be Qualified Under Trust Indenture Act
No warrant agreement will be qualified as an indenture, and no warrant agent will be required to qualify as a trustee, under the Trust Indenture Act. Therefore, holders of warrants issued under a warrant agreement will not have the protection of the Trust Indenture Act with respect to their warrants.
Modification of the Warrant Agreement
The warrant agreements may permit us and the warrant agent, if any, without the consent of the warrant holders, to supplement or amend the agreement in the following circumstances:
| ● | to cure any ambiguity; | |
| ● | to correct or supplement any provision which may be defective or inconsistent with any other provisions; or | |
| ● | to add new provisions regarding matters or questions that we and the warrant agent may deem necessary or desirable and which do not adversely affect the interests of the warrant holders. |
DESCRIPTION OF DEBT SECURITIES
As used in this prospectus, debt securities mean the debentures, notes, bonds and other evidences of indebtedness that we may issue from time to time. The debt securities may be either secured or unsecured and will either be senior debt securities or subordinated debt securities. The debt securities will be issued under one or more separate indentures between us and a trustee to be specified in an accompanying prospectus supplement. Senior debt securities will be issued under a new senior indenture. Subordinated debt securities will be issued under a subordinated indenture. Together, the senior indentures and the subordinated indentures are sometimes referred to in this prospectus as the indentures. This prospectus, together with the applicable prospectus supplement, will describe the terms of a particular series of debt securities.
The statements and descriptions in this prospectus or in any prospectus supplement regarding provisions of the indentures and debt securities are summaries thereof, do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all of the provisions of the indentures (and any amendments or supplements we may enter into from time to time which are permitted under each indenture) and the debt securities, including the definitions therein of certain terms.
General
Unless otherwise specified in a prospectus supplement, the debt securities will be direct unsecured obligations of the AGM Holdings The senior debt securities will rank equally with any of our other senior and unsubordinated debt. The subordinated debt securities will be subordinate and junior in right of payment to any senior indebtedness.
Unless otherwise specified in a prospectus supplement, the indentures do not limit the aggregate principal amount of debt securities that we may issue and provide that we may issue debt securities from time to time at par or at a discount, and in the case of the new indentures, if any, in one or more series, with the same or various maturities. Unless indicated in a prospectus supplement, we may issue additional debt securities of a particular series without the consent of the holders of the debt securities of such series outstanding at the time of the issuance. Any such additional debt securities, together with all other outstanding debt securities of that series, will constitute a single series of debt securities under the applicable indenture.
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Each prospectus supplement will describe the terms relating to the specific series of debt securities being offered. These terms will include some or all of the following:
| ● | the title of the debt securities and whether they are subordinated debt securities or senior debt securities; | |
| ● | any limit on the aggregate principal amount of the debt securities; | |
| ● | the ability to issue additional debt securities of the same series; | |
| ● | the price or prices at which we will sell the debt securities; | |
| ● | the maturity date or dates of the debt securities on which principal will be payable; | |
| ● | the rate or rates of interest, if any, which may be fixed or variable, at which the debt securities will bear interest, or the method of determining such rate or rates, if any; | |
| ● | the date or dates from which any interest will accrue or the method by which such date or dates will be determined; | |
| ● | the right, if any, to extend the interest payment periods and the duration of any such deferral period, including the maximum consecutive period during which interest payment periods may be extended; | |
| ● | whether the amount of payments of principal of (and premium, if any) or interest on the debt securities may be determined with reference to any index, formula or other method, such as one or more currencies, commodities, equity indices or other indices, and the manner of determining the amount of such payments; | |
| ● | the dates on which we will pay interest on the debt securities and the regular record date for determining who is entitled to the interest payable on any interest payment date; | |
| ● | the place or places where the principal of (and premium, if any) and interest on the debt securities will be payable, where any securities may be surrendered for registration of transfer, exchange or conversion, as applicable, and notices and demands may be delivered to or upon us pursuant to the indenture; | |
| ● | if we possess the option to do so, the periods within which and the prices at which we may redeem the debt securities, in whole or in part, pursuant to optional redemption provisions, and the other terms and conditions of any such provisions; | |
| ● | our obligation, if any, to redeem, repay or purchase debt securities by making periodic payments to a sinking fund or through an analogous provision or at the option of holders of the debt securities, and the period or periods within which and the price or prices at which we will redeem, repay or purchase the debt securities, in whole or in part, pursuant to such obligation, and the other terms and conditions of such obligation; | |
| ● | the denominations in which the debt securities will be issued, if other than denominations of $1,000 and integral multiples of $1,000; | |
| ● | the portion, or methods of determining the portion, of the principal amount of the debt securities which we must pay upon the acceleration of the maturity of the debt securities in connection with an event of default (as described below), if other than the full principal amount; | |
| ● | the currency, currencies or currency unit in which we will pay the principal of (and premium, if any) or interest, if any, on the debt securities, if not United States dollars; | |
| ● | provisions, if any, granting special rights to holders of the debt securities upon the occurrence of specified events; | |
| ● | any deletions from, modifications of or additions to the events of default or our covenants with respect to the applicable series of debt securities, and whether or not such events of default or covenants are consistent with those contained in the applicable indenture; | |
| ● | any limitation on our ability to incur debt, redeem shares, sell our assets or other restrictions; | |
| ● | the application, if any, of the terms of the indenture relating to defeasance and covenant defeasance (which terms are described below) to the debt securities; | |
| ● | whether the subordination provisions summarized below or different subordination provisions will apply to the debt securities; | |
| ● | the terms, if any, upon which the holders may convert or exchange the debt securities into or for our Class A ordinary shares or other securities or property; | |
| ● | whether any of the debt securities will be issued in global form and, if so, the terms and conditions upon which global debt securities may be exchanged for certificated debt securities; |
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| ● | any change in the right of the trustee or the requisite holders of debt securities to declare the principal amount thereof due and payable because of an event of default; | |
| ● | the depository for global or certificated debt securities; | |
| ● | any special tax implications of the debt securities; | |
| ● | any foreign tax consequences applicable to the debt securities, including any debt securities denominated and made payable, as described in the prospectus supplements, in foreign currencies, or units based on or related to foreign currencies; | |
| ● | any trustees, authenticating or paying agents, transfer agents or registrars, or other agents with respect to the debt securities; | |
| ● | any other terms of the debt securities not inconsistent with the provisions of the indentures, as amended or supplemented; | |
| ● | to whom any interest on any debt security shall be payable, if other than the person in whose name the security is registered, on the record date for such interest, the extent to which, or the manner in which, any interest payable on a temporary global debt security will be paid if other than in the manner provided in the applicable indenture; |
| ● | if the principal of or any premium or interest on any debt securities of the series is to be payable in one or more currencies or currency units other than as stated, the currency, currencies or currency units in which it shall be paid and the periods within and terms and conditions upon which such election is to be made and the amounts payable (or the manner in which such amount shall be determined); | |
| ● | the portion of the principal amount of any securities of the series which shall be payable upon declaration of acceleration of the maturity of the debt securities pursuant to the applicable indenture if other than the entire principal amount; and | |
| ● | if the principal amount payable at the stated maturity of any debt security of the series will not be determinable as of any one or more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such securities as of any such date for any purpose, including the principal amount thereof which shall be due and payable upon any maturity other than the stated maturity or which shall be deemed to be outstanding as of any date prior to the stated maturity (or, in any such case, the manner in which such amount deemed to be the principal amount shall be determined). |
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Unless otherwise specified in the applicable prospectus supplement, the debt securities will not be listed on any securities exchange and will be issued in fully-registered form without coupons.
Debt securities may be sold at a substantial discount below their stated principal amount, bearing no interest or interest at a rate which at the time of issuance is below market rates. The applicable prospectus supplement will describe the federal income tax consequences and special considerations applicable to any such debt securities. The debt securities may also be issued as indexed securities or securities denominated in foreign currencies, currency units or composite currencies, as described in more detail in the prospectus supplement relating to any of the particular debt securities. The prospectus supplement relating to specific debt securities will also describe any special considerations and certain additional tax considerations applicable to such debt securities.
Subordination
The prospectus supplement relating to any offering of subordinated debt securities will describe the specific subordination provisions. However, unless otherwise noted in the prospectus supplement, subordinated debt securities will be subordinate and junior in right of payment to any existing senior indebtedness.
Unless otherwise specified in the applicable prospectus supplement, under the subordinated indenture, “senior indebtedness” means all amounts due on obligations in connection with any of the following, whether outstanding at the date of execution of the subordinated indenture, or thereafter incurred or created:
| ● | the principal of (and premium, if any) and interest due on our indebtedness for borrowed money and indebtedness evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); | |
| ● | all of our capital lease obligations or attributable debt (as defined in the indentures) in respect of sale and leaseback transactions; | |
| ● | all obligations representing the balance deferred and unpaid of the purchase price of any property or services, which purchase price is due more than six months after the date of placing such property in service or taking delivery and title thereto, except any such balance that constitutes an accrued expense or trade payable or any similar obligation to trade creditors; | |
| ● | all of our obligations in respect of interest rate swap agreements (whether from fixed to floating or from floating to fixed), interest rate cap agreements and interest rate collar agreements; other agreements or arrangements designed to manage interest rates or interest rate risk; and other agreements or arrangements designed to protect against fluctuations in currency exchange rates or commodity prices; | |
| ● | all obligations of the types referred to above of other persons for the payment of which we are responsible or liable as obligor, guarantor or otherwise; and | |
| ● | all obligations of the types referred to above of other persons secured by any lien on any property or asset of ours (whether or not such obligation is assumed by us). |
However, senior indebtedness does not include:
| ● | any indebtedness which expressly provides that such indebtedness shall not be senior in right of payment to the subordinated debt securities, or that such indebtedness shall be subordinated to any other of our indebtedness, unless such indebtedness expressly provides that such indebtedness shall be senior in right of payment to the subordinated debt securities; | |
| ● | any of our obligations to our subsidiaries or of a subsidiary guarantor to us or any other of our other subsidiaries; | |
| ● | any liability for federal, state, local or other taxes owed or owing by us or any subsidiary guarantor, | |
| ● | any accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof or instruments evidencing such liabilities); | |
| ● | any obligations with respect to any capital stock or shares; | |
| ● | any indebtedness incurred in violation of the indenture, provided that indebtedness under our credit facilities will not cease to be senior indebtedness under this bullet point if the lenders of such indebtedness obtained an officer’s certificate as of the date of incurrence of such indebtedness to the effect that such indebtedness was permitted to be incurred by the indenture; and | |
| ● | any of our indebtedness in respect of the subordinated debt securities. |
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Senior indebtedness shall continue to be senior indebtedness and be entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of any term of such senior indebtedness.
Unless otherwise noted in an accompanying prospectus supplement, if we default in the payment of any principal of (or premium, if any) or interest on any senior indebtedness when it becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise, then, unless and until such default is cured or waived or ceases to exist, we will make no direct or indirect payment (in cash, property, securities, by set-off or otherwise) in respect of the principal of or interest on the subordinated debt securities or in respect of any redemption, retirement, purchase or other requisition of any of the subordinated debt securities.
In the event of the acceleration of the maturity of any subordinated debt securities, the holders of all senior debt securities outstanding at the time of such acceleration, subject to any security interest, will first be entitled to receive payment in full of all amounts due on the senior debt securities before the holders of the subordinated debt securities will be entitled to receive any payment of principal (and premium, if any) or interest on the subordinated debt securities.
If any of the following events occurs, we will pay in full all senior indebtedness before we make any payment or distribution under the subordinated debt securities, whether in cash, securities or other property, to any holder of subordinated debt securities:
| ● | any dissolution or winding-up or liquidation or reorganization of AGM Holdings, whether voluntary or involuntary or in bankruptcy, | |
| ● | insolvency or receivership; | |
| ● | any general assignment by us for the benefit of creditors; or | |
| ● | any other marshaling of our assets or liabilities. |
In such event, any payment or distribution under the subordinated debt securities, whether in cash, securities or other property, which would otherwise (but for the subordination provisions) be payable or deliverable in respect of the subordinated debt securities, will be paid or delivered directly to the holders of senior indebtedness in accordance with the priorities then existing among such holders until all senior indebtedness has been paid in full. If any payment or distribution under the subordinated debt securities is received by the trustee of any subordinated debt securities in contravention of any of the terms of the subordinated indenture and before all the senior indebtedness has been paid in full, such payment or distribution will be received in trust for the benefit of, and paid over or delivered and transferred to, the holders of the senior indebtedness at the time outstanding in accordance with the priorities then existing among such holders for application to the payment of all senior indebtedness remaining unpaid to the extent necessary to pay all such senior indebtedness in full.
The subordinated indenture does not limit the issuance of additional senior indebtedness.
Events of Default, Notice and Waiver
Unless an accompanying prospectus supplement states otherwise, the following shall constitute “events of default” under the indentures with respect to each series of debt securities:
| ● | we default for 30 consecutive days in the payment when due of interest on the debt securities; | |
| ● | we default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on the debt securities; | |
| ● | our failure to observe or perform any other of our covenants or agreements with respect to such debt securities for 60 days after we receive notice of such failure; | |
| ● | certain events of bankruptcy, insolvency or reorganization of the AGM Holdings; or | |
| ● | any other event of default provided with respect to securities of that series. |
Unless an accompanying prospectus supplement states otherwise, if an event of default with respect to any debt securities of any series outstanding under either of the indentures shall occur and be continuing, the trustee under such indenture or the holders of at least 25% (or at least 10%, in respect of a remedy (other than acceleration) for certain events of default relating to the payment of dividends) in aggregate principal amount of the debt securities of that series outstanding may declare, by notice as provided in the applicable indenture, the principal amount (or such lesser amount as may be provided for in the debt securities of that series) of all the debt securities of that series outstanding to be due and payable immediately; provided that, in the case of an event of default involving certain events in bankruptcy, insolvency or reorganization, acceleration is automatic; and, provided further, that after such acceleration, but before a judgment or decree based on acceleration, the holders of a majority in aggregate principal amount of the outstanding debt securities of that series may, under certain circumstances, rescind and annul such acceleration if all events of default, other than the nonpayment of accelerated principal, have been cured or waived. Upon the acceleration of the maturity of original issue discount securities, an amount less than the principal amount thereof will become due and payable. Reference is made to the prospectus supplement relating to any original issue discount securities for the particular provisions relating to acceleration of maturity thereof.
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Any past default under either indenture with respect to debt securities of any series, and any event of default arising therefrom, may be waived by the holders of a majority in principal amount of all debt securities of such series outstanding under such indenture, except in the case of (1) default in the payment of the principal of (or premium, if any) or interest on any debt securities of such series or (2) certain events of default relating to the payment of dividends.
The trustee is required within 90 days after the occurrence of a default (which is known to the trustee and is continuing), with respect to the debt securities of any series (without regard to any grace period or notice requirements), to give to the holders of the debt securities of such series notice of such default.
The trustee, subject to its duties during default to act with the required standard of care, may require indemnification by the holders of the debt securities of any series with respect to which a default has occurred before proceeding to exercise any right or power under the indentures at the request of the holders of the debt securities of such series. Subject to such right of indemnification and to certain other limitations, the holders of a majority in principal amount of the outstanding debt securities of any series under either indenture may direct the time, method and place of conducting any proceeding for any remedy available to the trustee, or exercising any trust or power conferred on the trustee with respect to the debt securities of such series, provided that such direction shall not be in conflict with any rule of law or with the applicable indenture and the trustee may take any other action deemed proper by the trustee which is not inconsistent with such direction.
No holder of a debt security of any series may institute any action against us under either of the indentures (except actions for payment of overdue principal of (and premium, if any) or interest on such debt security or for the conversion or exchange of such debt security in accordance with its terms) unless (1) the holder has given to the trustee written notice of an event of default and of the continuance thereof with respect to the debt securities of such series specifying an event of default, as required under the applicable indenture, (2) the holders of at least 25% in aggregate principal amount of the debt securities of that series then outstanding under such indenture shall have requested the trustee to institute such action and offered to the trustee indemnity reasonably satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request; (3) the trustee shall not have instituted such action within 60 days of such request and (4) no direction inconsistent with such written request has been given to the trustee during such 60-day period by the holders of a majority in principal amount of the debt securities of that series. We are required to furnish annually to the trustee statements as to our compliance with all conditions and covenants under each indenture.
Discharge, Defeasance and Covenant Defeasance
We may discharge or defease our obligations under the indenture as set forth below, unless otherwise indicated in the applicable prospectus supplement.
We may discharge certain obligations to holders of any series of debt securities issued under either the senior indenture or the subordinated indenture which have not already been delivered to the trustee for cancellation by irrevocably depositing with the trustee money in an amount sufficient to pay and discharge the entire indebtedness on such debt securities not previously delivered to the trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of debt securities which have become due and payable) or to the stated maturity or redemption date, as the case may be, and we or, if applicable, any guarantor, have paid all other sums payable under the applicable indenture.
If indicated in the applicable prospectus supplement, we may elect either (1) to defease and be discharged from any and all obligations with respect to the debt securities of or within any series (except in all cases as otherwise provided in the relevant indenture) (“legal defeasance”) or (2) to be released from our obligations with respect to certain covenants applicable to the debt securities of or within any series (“covenant defeasance”), upon the deposit with the relevant indenture trustee, in trust for such purpose, of money and/or government obligations which through the payment of principal and interest in accordance with their terms will provide money in an amount sufficient to pay the principal of (and premium, if any) or interest on such debt securities to maturity or redemption, as the case may be, and any mandatory sinking fund or analogous payments thereon. As a condition to legal defeasance or covenant defeasance, we must deliver to the trustee an opinion of counsel to the effect that the holders of such debt securities will not recognize income, gain or loss for federal income tax purposes as a result of such legal defeasance or covenant defeasance and will be subject to federal income tax on the same amounts and in the same manner and at the same times as would have been the case if such legal defeasance or covenant defeasance had not occurred. Such opinion of counsel, in the case of legal defeasance under clause (i) above, must refer to and be based upon a ruling of the Internal Revenue Service or a change in applicable federal income tax law occurring after the date of the relevant indenture. In addition, in the case of either legal defeasance or covenant defeasance, we shall have delivered to the trustee (1) if applicable, an officer’s certificate to the effect that the relevant debt securities exchange(s) have informed us that neither such debt securities nor any other debt securities of the same series, if then listed on any securities exchange, will be delisted as a result of such deposit and (2) an officer’s certificate and an opinion of counsel, each stating that all conditions precedent with respect to such legal defeasance or covenant defeasance have been complied with.
We may exercise our defeasance option with respect to such debt securities notwithstanding our prior exercise of our covenant defeasance option.
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Modification and Waiver
Under the indentures, unless an accompanying prospectus supplement states otherwise, we and the applicable trustee may supplement the indentures for certain purposes which would not materially adversely affect the interests or rights of the holders of debt securities of a series without the consent of those holders. We and the applicable trustee may also modify the indentures or any supplemental indenture in a manner that affects the interests or rights of the holders of debt securities with the consent of the holders of at least a majority in aggregate principal amount of the outstanding debt securities of each affected series issued under the indenture. However, the indentures require the consent of each holder of debt securities that would be affected by any modification which would:
| ● | reduce the principal amount of debt securities whose holders must consent to an amendment, supplement or waiver; | |
| ● | reduce the principal of or change the fixed maturity of any debt security or, except as provided in any prospectus supplement, alter or waive any of the provisions with respect to the redemption of the debt securities; | |
| ● | reduce the rate of or change the time for payment of interest, including default interest, on any debt security; | |
| ● | waive a default or event of default in the payment of principal of or interest or premium, if any, on, the debt securities (except a rescission of acceleration of the debt securities by the holders of at least a majority in aggregate principal amount of the then outstanding debt securities and a waiver of the payment default that resulted from such acceleration); | |
| ● | make any debt security payable in money other than that stated in the debt securities; | |
| ● | make any change in the provisions of the applicable indenture relating to waivers of past defaults or the rights of holders of the debt securities to receive payments of principal of, or interest or premium, if any, on, the debt securities; | |
| ● | waive a redemption payment with respect to any debt security (except as otherwise provided in the applicable prospectus supplement); | |
| ● | except in connection with an offer by us to purchase all debt securities, (1) waive certain events of default relating to the payment of dividends or (2) amend certain covenants relating to the payment of dividends and the purchase or redemption of certain equity interests; | |
| ● | make any change to the subordination or ranking provisions of the indenture or the related definitions that adversely affect the rights of any holder; or | |
| ● | make any change in the preceding amendment and waiver provisions. |
The indentures permit the holders of at least a majority in aggregate principal amount of the outstanding debt securities of any series issued under the indenture which is affected by the modification or amendment to waive our compliance with certain covenants contained in the indentures.
Payment and Paying Agents
Unless otherwise indicated in the applicable prospectus supplement, payment of interest on a debt security on any interest payment date will be made to the person in whose name a debt security is registered at the close of business on the record date for the interest.
Unless otherwise indicated in the applicable prospectus supplement, principal, interest and premium on the debt securities of a particular series will be payable at the office of such paying agent or paying agents as we may designate for such purpose from time to time. Notwithstanding the foregoing, at our option, payment of any interest may be made by check mailed to the address of the person entitled thereto as such address appears in the security register.
Unless otherwise indicated in the applicable prospectus supplement, a paying agent designated by us will act as paying agent for payments with respect to debt securities of each series. All paying agents initially designated by us for the debt securities of a particular series will be named in the applicable prospectus supplement. We may at any time designate additional paying agents or rescind the designation of any paying agent or approve a change in the office through which any paying agent acts, except that we will be required to maintain a paying agent in each place of payment for the debt securities of a particular series.
All moneys paid by us to a paying agent for the payment of the principal, interest or premium on any debt security which remain unclaimed at the end of two years after such principal, interest or premium has become due and payable will be repaid to us upon request, and the holder of such debt security thereafter may look only to us for payment thereof.
Denominations, Registrations and Transfer
Unless an accompanying prospectus supplement states otherwise, debt securities will be represented by one or more global certificates registered in the name of a nominee for The Depository Trust Company, or DTC. In such case, each holder’s beneficial interest in the global securities will be shown on the records of DTC and transfers of beneficial interests will only be effected through DTC’s records.
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A holder of debt securities may only exchange a beneficial interest in a global security for certificated securities registered in the holder’s name if:
| ● | we deliver to the trustee notice from DTC that it is unwilling or unable to continue to act as depository or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor depositary is not appointed by us within 120 days after the date of such notice from DTC; | |
| ● | we in our sole discretion determine that the debt securities (in whole but not in part) should be exchanged for definitive debt securities and deliver a written notice to such effect to the trustee; or | |
| ● | there has occurred and is continuing a default or event of default with respect to the debt securities. |
If debt securities are issued in certificated form, they will only be issued in the minimum denomination specified in the accompanying prospectus supplement and integral multiples of such denomination. Transfers and exchanges of such debt securities will only be permitted in such minimum denomination. Transfers of debt securities in certificated form may be registered at the trustee’s corporate office or at the offices of any paying agent or trustee appointed by us under the indentures. Exchanges of debt securities for an equal aggregate principal amount of debt securities in different denominations may also be made at such locations.
Governing Law
The indentures and debt securities will be governed by, and construed in accordance with, the laws of the State of New York, without regard to its principles of conflicts of laws, except to the extent the Trust Indenture Act is applicable or as otherwise agreed to by the parties thereto.
Trustee
The trustee or trustees under the indentures will be named in any applicable prospectus supplement.
Conversion or Exchange Rights
The prospectus supplement will describe the terms, if any, on which a series of debt securities may be convertible into or exchangeable for our Class A ordinary shares or other debt securities. These terms will include provisions as to whether conversion or exchange is mandatory, at the option of the holder or at our option. These provisions may allow or require the number of shares of our Class A ordinary shares or other securities to be received by the holders of such series of debt securities to be adjusted. Any such conversion or exchange will comply with applicable British Virgin Islands law and our memorandum and articles of association.
We may issue units comprising one or more of the other securities described in this prospectus in any combination. Each unit will be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before a specified date or occurrence.
The applicable prospectus supplement may describe:
| ● | the designation and terms of the units and of the securities comprising the units, including whether and under what circumstances those securities may be held or transferred separately; | |
| ● | any provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units; and | |
| ● | whether the units will be issued in fully registered or global form. |
The applicable prospectus supplement will describe the terms of any units. The preceding description and any description of units in the applicable prospectus supplement does not purport to be complete and is subject to and is qualified in its entirety by reference to the unit agreement and, if applicable, collateral arrangements and depository arrangements relating to such units.
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DESCRIPTION OF SHARE PURCHASE CONTRACTS AND SHARE PURCHASE UNITS
We may issue share purchase contracts, including contracts obligating holders to purchase from us, and obligating us to sell to the holders, a specified number of Class A ordinary shares or other securities registered hereunder at a future date or dates, which we refer to in this prospectus as “share purchase contracts.” The price per share of the securities and the number of shares of the securities may be fixed at the time the share purchase contracts are issued or may be determined by reference to a specific formula set forth in the share purchase contracts.
The share purchase contracts may be issued separately or as part of units consisting of a share purchase contract and debt securities, warrants, other securities registered hereunder or debt obligations of third parties, including U.S. treasury securities, securing the holders’ obligations to purchase the securities under the share purchase contracts, which we refer to herein as “share purchase units.” The share purchase contracts may require holders to secure their obligations under the share purchase contracts in a specified manner. The share purchase contracts also may require us to make periodic payments to the holders of the share purchase units or vice versa, and those payments may be unsecured or refunded on some basis.
The share purchase contracts, and, if applicable, collateral or depositary arrangements, relating to the share purchase contracts or share purchase units, will be filed with the SEC in connection with the offering of share purchase contracts or share purchase units. The prospectus supplement relating to a particular issue of share purchase contracts or share purchase units will describe the terms of those share purchase contracts or share purchase units, including the following:
| ● | if applicable, a discussion of material tax considerations; and | |
| ● | any other information we think is important about the share purchase contracts or the share purchase units. |
We may issue rights to purchase Class A ordinary shares that we may offer to our securityholders. The rights may or may not be transferable by the persons purchasing or receiving the rights. In connection with any rights offering, we may enter into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which such underwriters or other persons would purchase any offered securities remaining unsubscribed for after such rights offering. Each series of rights will be issued under a separate rights agent agreement to be entered into between us and a bank or trust company, as rights agent, that we will name in the applicable prospectus supplement. The rights agent will act solely as our agent in connection with the rights and will not assume any obligation or relationship of agency or trust for or with any holders of rights certificates or beneficial owners of rights.
The prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, among other matters:
| ● | the date of determining the securityholders entitled to the rights distribution; | |
| ● | the aggregate number of rights issued and the aggregate number of Class A ordinary shares purchasable upon exercise of the rights; | |
| ● | the exercise price; | |
| ● | the conditions to completion of the rights offering; | |
| ● | the date on which the right to exercise the rights will commence and the date on which the rights will expire; and | |
| ● | applicable tax considerations. |
Each right would entitle the holder of the rights to purchase for cash the principal amount of debt securities or Class A ordinary shares at the exercise price set forth in the applicable prospectus supplement. Rights may be exercised at any time up to the close of business on the expiration date for the rights provided in the applicable prospectus supplement. After the close of business on the expiration date, all unexercised rights will become void.
If less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to persons other than our security holders, to or through agents, underwriters or dealers or through a combination of such methods, including pursuant to standby arrangements, as described in the applicable prospectus supplement.
Information regarding taxation is set forth under the heading “Item 10.E. Taxation” in our Annual Report, as amended, on Form 20-F for the year ended December 31, 2018, which is incorporated in this prospectus by reference, as updated by our subsequent filings under the Exchange Act.
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We may sell the securities described in this prospectus through underwriters or dealers, through agents, or directly to one or more purchasers or through a combination of these methods. The applicable prospectus supplement will describe the terms of the offering of the securities, including:
| ● | the name or names of any underwriters, if any, and if required, any dealers or agents, and the amount of securities underwritten or purchased by each of them, if any; | |
| ● | the public offering price or purchase price of the securities from us and the net proceeds to us from the sale of the securities; | |
| ● | any underwriting discounts and other items constituting underwriters’ compensation; | |
| ● | any discounts or concessions allowed or re-allowed or paid to dealers; and | |
| ● | any securities exchange or market on which the securities may be listed. |
We may distribute the securities from time to time in one or more transactions at:
| ● | a fixed price or prices, which may be changed; | |
| ● | market prices prevailing at the time of sale; | |
| ● | varying prices determined at the time of sale related to such prevailing market prices; or | |
| ● | negotiated prices. |
Only underwriters named in the prospectus supplement will be underwriters of the securities offered by the prospectus supplement.
If we use underwriters in the sale, the underwriters will either acquire the securities for their own account and may resell the securities from time to time in one or more transactions at a fixed public offering price or at varying prices determined at the time of sale, or sell the Shares on a “best efforts, minimum/maximum basis” when the underwriters agree to do their best to sell the securities to the public. We may offer the securities to the public through underwriting syndicates represented by managing underwriters or by underwriters without a syndicate. Any public offering price and any discounts or concessions allowed or re-allowed or paid to dealers may change from time to time.
If we use a dealer in the sale of the securities being offered pursuant to this prospectus or any prospectus supplement, the securities will be sold directly to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.
Our Class A ordinary shares are listed on the Nasdaq Capital Market. Unless otherwise specified in the related prospectus supplement, all securities we offer, other than Class A ordinary shares, will be new issues of securities with no established trading market. Any underwriter may make a market in these securities, but will not be obligated to do so and may discontinue any market making at any time without notice. We may apply to list any series of warrants or other securities that we offer on an exchange, but we are not obligated to do so. Therefore, there may not be liquidity or a trading market for any series of securities.
We may sell the securities directly or through agents we designate from time to time. We will name any agent involved in the offering and sale of securities and we will describe any commissions we may pay the agent in the applicable prospectus supplement.
We may authorize agents or underwriters to solicit offers by institutional investors to purchase securities from us at the public offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery on a specified date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation of these contracts in the applicable prospectus supplement.
In connection with the sale of the securities, underwriters, dealers or agents may receive compensation from us or from purchasers of the securities for whom they act as agents in the form of discounts, concessions or commissions. Underwriters may sell the securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions from the underwriters or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that participate in the distribution of the securities, and any institutional investors or others that purchase securities directly and then resell the securities, may be deemed to be underwriters, and any discounts or commissions received by them from us and any profit on the resale of the securities by them may be deemed to be underwriting discounts and commissions under the Securities Act.
We may provide agents and underwriters with indemnification against particular civil liabilities, including liabilities under the Securities Act, or contribution with respect to payments that the agents or underwriters may make with respect to such liabilities. Agents and underwriters may engage in transactions with, or perform services for, us in the ordinary course of business.
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In addition, we may enter into derivative transactions with third parties (including the writing of options), or sell securities not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement indicates, in connection with such a transaction, the third parties may, pursuant to this prospectus and the applicable prospectus supplement, sell securities covered by this prospectus and the applicable prospectus supplement. If so, the third party may use securities borrowed from us or others to settle such sales and may use securities received from us to close out any related short positions. We may also loan or pledge securities covered by this prospectus and the applicable prospectus supplement to third parties, who may sell the loaned securities or, in an event of default in the case of a pledge, sell the pledged securities pursuant to this prospectus and the applicable prospectus supplement. The third party in such sale transactions will be an underwriter and will be identified in the applicable prospectus supplement or in a post-effective amendment.
To facilitate an offering of a series of securities, persons participating in the offering may engage in transactions that stabilize, maintain, or otherwise affect the market price of the securities. This may include over-allotments or short sales of the securities, which involves the sale by persons participating in the offering of more securities than have been sold to them by us. In those circumstances, such persons would cover such over-allotments or short positions by purchasing in the open market or by exercising the over-allotment option granted to those persons. In addition, those persons may stabilize or maintain the price of the securities by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to underwriters or dealers participating in any such offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any time. We make no representation or prediction as to the direction or magnitude of any effect that the transactions described above, if implemented, may have on the price of our securities.
The following table sets forth the estimated costs and expenses, other than underwriting discounts and commissions, payable by us in connection with the offering of the securities being registered. All the amounts shown are estimates, except for the SEC registration fee.
| SEC registration fee | $ | 12,980 | ||
| FINRA fee | $ | * | ||
| Legal fees and expenses | $ | * | ||
| Accounting fees and expenses | $ | * | ||
| Printing fees and expenses | $ | * | ||
| Miscellaneous | $ | * | ||
| Total | $ | * |
* Estimated expenses are not presently known. The foregoing sets forth the general categories of expenses (other than underwriting discounts and commissions) that the Company anticipates it will incur in connection with the offering of securities under the registration statement. An estimate of the aggregate expenses in connection with the issuance and distribution of the securities being offered will be included in the applicable prospectus supplement.
WHERE YOU CAN GET MORE INFORMATION
We have filed with the SEC a registration statement on Form F-3 under the Securities Act with respect to the securities described in this prospectus and any accompanying prospectus supplement, as applicable. This prospectus and any accompanying prospectus supplement, which constitute a part of that registration statement, do not contain all of the information set forth in that registration statement and its exhibits. For further information with respect to us and our securities, you should consult the registration statement and its exhibits.
We are subject to the informational requirements of the Exchange Act, and, in accordance with the Exchange Act, we also must file reports with, and furnish other information to, the SEC. As a foreign private issuer, we are exempt from the rules under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are not required to publish financial statements as promptly as U.S. companies. However, we file with the SEC an annual report on Form 20-F containing financial statements audited by an independent registered public accounting firm, and we submit to the SEC, on Form 6-K, unaudited quarterly financial information.
You may read and copy any document we file with, or furnish to, the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The SEC also maintains an internet site (www.sec.gov) that makes available reports and other information that we file or furnish electronically with it.
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The SEC allows us to “incorporate by reference” into this prospectus the documents we file with, or furnish to, it, which means that we can disclose important information to you by referring you to these documents. The information that we incorporate by reference into this prospectus forms a part of this prospectus, and information that we file later with the SEC automatically updates and supersedes any information in this prospectus. We incorporate by reference into this prospectus the documents listed below:
| ● | our Annual Report on Form 20-F for the fiscal year ended December 31, 2018, filed with the SEC on May 15, 2019 (the “2018 Annual Report”); |
| ● | our Report on Form 6-K, furnished to the SEC on May 21, 2019, with respect to departure and appointment of director; |
| ● | our Report on Form 6-K, furnished to the SEC on June 18, 2019, with respect to name change of a subsidiary; |
| ● | our Report on Form 6-K/A, furnished to the SEC on June 28, 2019, amending the Report on Form 6-K furnished to the SEC on May 21, 2019; |
| ● | our Report on Form 6-K, furnished to the SEC on July 26, 2019, with respect to entry into a material definitive agreement; |
| ● | our Report on Form 6-K, furnished to the SEC on September 20, 2019, with respect to proxy statement for the annual shareholders meeting; |
| ● | our Report on Form 6-K, furnished to the SEC on September 25, 2019, with respect to completion of acquisition; |
| ● | our Report on Form 6-K, furnished to the SEC on September 30, 2019, with respect to financial results as of and for the period ended June 30, 2019; |
| ● | our Report on Form 6-K, furnished to the SEC on October 31, 2019, with respect to departure and appointment of director; |
| ● | our Report on Form 6-K, furnished to the SEC on December 3, 2019, with respect to the results of the annual shareholders meeting; |
| ● | our Report on Form 6-K, furnished to the SEC on January 3, 2020, with respect to termination of a material definitive agreement; |
| ● | our Report on Form 6-K, furnished to the SEC on January 22, 2020, with respect to entry into a material definitive agreement; |
| ● | our Report on Form 6-K, furnished to the SEC on February 5, 2020, with respect to notice of delisting or failure to satisfy a continued listing rule or standard; and |
| ● | our Report on Form 6-K, furnished to the SEC on February 12, 2020, with respect to certain press release. |
All documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this prospectus and prior to the termination of the offering of the securities offered by this prospectus are incorporated by reference into this prospectus and form part of this prospectus from the date of filing or furnishing of these documents. Any documents that we furnish to the SEC on Form 6-K subsequent to the date of this prospectus will be incorporated by reference into this prospectus only to the extent specifically set forth in the Form 6-K.
Any statement contained in a document that is incorporated by reference into this prospectus will be deemed to be modified or superseded for the purposes of this prospectus to the extent that a statement contained in this prospectus, or in any other subsequently filed document which also is or is deemed to be incorporated by reference into this prospectus, modifies or supersedes that statement. The modifying or superseding statement does not need to state that it has modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes.
Upon request, we will provide, without charge, to each person who receives this prospectus, a copy of any or all of the documents incorporated by reference (other than exhibits to the documents that are not specifically incorporated by reference in the documents). Please direct written or oral requests for copies to our Creative Consultants (Hong Kong) Limited, Room 1502-3 15/F., Connuaght Commercial Building, 185 Wanchai Road Wanchai, Hong Kong.
ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under the laws of the British Virgin Islands with limited liability. We are incorporated in the British Virgin Islands because of certain benefits associated with being a British Virgin Islands corporation, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of exchange control or currency restrictions and the availability of professional and support services. However, the British Virgin Islands has a less developed body of securities laws as compared to the United States and provides protections for investors to a lesser extent. In addition, British Virgin Islands companies may not have standing to sue before the federal courts of the United States.
Substantially all of our assets are located outside the United States. In addition, a majority of our directors and officers are nationals and/or residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon us or such persons or to enforce against them or against us, judgments obtained in United States courts, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.
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We have appointed Vcorp Agent Services, Inc. as our agent to receive service of process with respect to any action brought against us in the United States District Court for districts in the State of New York under the federal securities laws of the United States or of any State of the United States or any action brought against us in the Supreme Court of the State of New York under the securities laws of the State of New York.
There is uncertainty as to whether the courts of China would (1) recognize or enforce judgments of United States courts obtained against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or (2) be competent to hear original actions brought in each respective jurisdiction, against us or such persons predicated upon the securities laws of the United States or any state thereof.
The recognition and enforcement of foreign judgments are provided for under the Chinese Civil Procedure Law. Chinese courts may recognize and enforce foreign judgments in accordance with the requirements of the Chinese Civil Procedure Law based either on treaties between China and the country where the judgment is made or in reciprocity between jurisdictions. China does not have any treaties or other agreements with the British Virgin Islands or the United States that provide for the reciprocal recognition and enforcement of foreign judgments. As a result, it is uncertain whether a Chinese court would enforce a judgment rendered by a court in either of these two jurisdictions.
The United States and the British Virgin Islands do not have a treaty providing for reciprocal recognition and enforcement of judgments of courts of the United States in civil and commercial matters and that a final judgment for the payment of money rendered by any general or state court in the United States based on civil liability, whether or not predicated solely upon the U.S. federal securities laws, may not be enforceable in the British Virgin Islands. A final and conclusive judgment obtained in U.S. federal or state courts under which a sum of money is payable as compensatory damages (i.e., not being a sum claimed by a revenue authority for taxes or other charges of a similar nature by a governmental authority, or in respect of a fine or penalty or multiple or punitive damages) may be the subject of an action on a debt in the court of the British Virgin Islands.
Except as otherwise described in our Annual Report on Form 20-F for the fiscal year ended December 31, 2018, in our Reports on Form 6-K filed or submitted under the Exchange Act and incorporated by reference herein and as disclosed in this prospectus, no reportable material changes have occurred since December 31, 2018.
Ortoli Rosenstadt LLP is acting as counsel to our company regarding U.S. securities law matters. The current address of Ortoli Rosenstadt LLP is 366 Madison Avenue, 3rd Floor, New York, NY 10017. Mourant Ozannes is acting as our British Virgin Islands counsel. The current address of Mourant Ozannes is 5th Floor, Waters Edge Building, Meridian Plaza, Wickham’s Cay II, PO Box 4857, Road Town, Tortola, British Virgin Islands.
Our consolidated financial statements as of December 31, 2018 and December 31, 2017 and for the years respectively then ended incorporated by reference in this prospectus and have been so included in reliance on the report of JLKZ CPA LLP and MaloneBailey, LLP, two independent registered public accounting firms, given on the authority of said firm as experts in accounting and auditing. MaloneBailey, LLP was appointed by the Company to serve as its independent registered public accounting firm for fiscal year ended December 31, 2017. JLKZ CPA LLP was appointed by the Company to serve as its independent registered public accounting firm for fiscal year ended December 31, 2018. The current address of JLKZ CPA LLP is 39-01 Main Street Suite 501, Flushing, NY 11354. The current address of MaloneBailey, LLP is 9801 Westheimer Road, Suite 1100, Houston, TX 77042.
INTERESTS OF EXPERTS AND COUNSEL
No named expert of or counselor to us was employed on a contingent basis, or owns an amount of our shares (or those of our subsidiaries) which is material to that person, or has a material, direct or indirect economic interest in us or that depends of the success of the offering.
COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
| Item 8. | Indemnification of Directors and Officers |
Under British Virgin Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with a view to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances. British Virgin Islands law does not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such indemnification may be held by the British Virgin Islands courts to be contrary to public policy, for example, a provision for indemnification against civil fraud or the consequences of committing a crime.
Under our memorandum and articles of association, we may indemnify our directors against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with civil, criminal, administrative or investigative proceedings to which they are party or are threatened to be made a party by reason of their acting as our directors. To be entitled to indemnification, these persons must have acted honestly and in good faith with a view to the best interest of the company and, in the case of criminal proceedings, they must have had no reasonable cause to believe their conduct was unlawful. The decision of our board of directors as to whether such a person acted honestly and in good faith with a view to the best interests of the company and as to whether the person had no reasonable to cause to believe that his or her conduct was unlawful is, in the absence of fraud, sufficient for the purposes of the indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement, conviction or the entry of no plea does not, by itself, create a presumption that a director did not act honestly and in good faith and with a view to our best interests or that the director had reasonable cause to believe that his or her conduct was unlawful. Such limitation of liability does not affect the availability of equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors under United States federal securities laws.
We may indemnify anyone serving at our request as a director of another entity against all expenses, including legal fees, and against all judgments, fines and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings. To be entitled to indemnification, such a person must have acted honestly and in good faith with the view to our best interests and, in the case of criminal proceedings, must have had no reasonable cause to believe that his or her conduct was unlawful. The decision of our board of directors as to whether the person acted honestly and in good faith with a view to our best interests and as to whether the person had no reasonable cause to believe that his or her conduct was unlawful, is in the absence of fraud sufficient for the purposes of indemnification, unless a question of law is involved. The termination of any proceedings by any judgment, order, settlement, conviction or the entry of no plea does not, by itself, create a presumption that a person did not act honestly and in good faith and with a view to our best interests or that the person had reasonable cause to believe that his or her conduct was unlawful.
We may purchase and maintain insurance in relation to any of our directors or officers against any liability asserted against the directors or officers and incurred by the directors or officers in that capacity, whether or not we have or would have had the power to indemnify the directors or officers against the liability as provided in our memorandum and articles of association.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
| Item 9. | Exhibits |
The following exhibits are attached hereto:
| Exhibit Number | Title | |
| 1.1* | Form of Underwriting Agreement | |
| 3.1 | Amended and Restated Memorandum and Articles of Association of AGM Group Holdings Inc.(1) | |
| 3.2* | Form of Senior Debt Indenture | |
| 3.3* | Form of Subordinated Debt Indenture | |
| 3.4* | Form of Senior Note | |
| 3.5* | Form of Subordinated Note | |
| 3.6* | Form of Class A Ordinary Share Warrant Agreement and Warrant Certificate | |
| 3.7* | Form of Unit Agreement (including unit certificate) | |
| 3.8* | Form of Rights Agreement (including rights certificate) | |
| 3.9* | Form of Share Purchase Contract | |
| 3.10* | Form of Share Purchase Unit | |
| 4.1+ | ||
| 5.1+ | Opinion of Mourant Ozannes, BVI counsel of AGM Holdings Group Inc. | |
| 23.1+ | Consent of JLKZ CPA LLP | |
| 23.2+ | Consent of MaloneBailey, LLP | |
| 25.1* | Statement of Eligibility on Form T-1 under the Trust Indenture Act of 1939, of a trustee acceptable to the registrant, as trustee under any new indenture |
| * | To be filed, if necessary, after effectiveness of this registration statement by an amendment to the registration statement or incorporated by reference to a Current Report on Form 6-K filed in connection with an underwritten offering of the shares offered hereunder. |
| + | Filed herewith |
| (1) | Filed as an exhibit to our registration statement on Form F-1 as filed with the SEC on May 5, 2017 and incorporated herein by reference. |
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| Item 10. | Undertakings |
The undersigned Registrant hereby undertakes:
| (1) | To file, during any period in which offers or sales of securities are being made, a post-effective amendment to this registration statement: |
| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
| (2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
| (4) | To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the Registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of Regulation S-X if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3. |
| (5) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser: |
| (i) | If the registrant is relying on Rule 430B: |
| (a) | Each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
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| (b) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or |
(x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date; or
| (ii) | If the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
| (6) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
| (i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| (iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
| (b) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (c) | The undersigned registrant hereby undertakes to supplement the prospectus, after the expiration of the subscription period, to set forth the results of the subscription offer, the transactions by the underwriters during the subscription period, the amount of unsubscribed securities to be purchased by the underwriters, and the terms of any subsequent reoffering thereof. If any public offering by the underwriters is to be made on terms differing from those set forth on the cover page of the prospectus, a post-effective amendment will be filed to set forth the terms of such offering. |
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hong Kong, People’s Republic of China, on March 5, 2020.
| AGM GROUP HOLDINGS INC. | ||
| By: | /s/ Wenjie Tang | |
| Wenjie Tang | ||
Chief Executive Officer and a director | ||
| (Principal Executive Officer) | ||
| By: | /s/ Guofu Zhang | |
| Guofu Zhang | ||
| Chief Financial Officer | ||
| (Principal Accounting Officer) | ||
Pursuant to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
| Signature | Capacity | Date | ||
| /s/ Bin Cao | Chairman of the Board | March 5, 2020 | ||
| Bin Cao | ||||
| /s/ Xiaoding Wu | Chief Operating Officer | March 5, 2020 | ||
| Xiaoding Wu | ||||
| /s/ Yufeng Mi | Chief Technology Officer | March 5, 2020 | ||
| Yufeng Mi | ||||
| /s/ Jialin Liu | Director | March 5, 2020 | ||
| Jialin Liu | ||||
| /s/ Tingfu Xie | Director | March 5, 2020 | ||
| Tingfu Xie | ||||
| /s/ Fangjie Wang | Director | March 5, 2020 | ||
| Fangjie Wang |
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SIGNATURE OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Pursuant to the Securities Act of 1933 as amended, the undersigned, the duly authorized representative in the United States of America, has signed this registration statement thereto in New York, NY on March 5, 2020.
| COGENCY GLOBAL INC. | ||
| By: | /s/ Colleen A. De Vries | |
| Colleen A. De Vries | ||
| Senior Vice-President on behalf of Cogency Global Inc. | ||
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Exhibit 4.1
DESCRIPTION OF SECURITIES
As of March 2, 2020, AGM Holdings (the “Company”) had one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: class A ordinary shares, par value $0.001 per share (“common stock”). The following description of the Company’s common stock is a summary and is not complete. For a complete description, please refer to the Company’s articles of incorporation (as amended to date, the Company’s “Articles of Incorporation”) and bylaws (as amended to date, the Company’s “Bylaws”), which the company has incorporated by reference as exhibits to the Company’s Annual Report on Form 20-F for the year ended December 31, 2018. Stockholders are also encouraged to refer to the application provisions of the Nevada Revised Statutes and Administrative Codes for additional information. References to “stockholders” refer to holders of the Company’s common stock, unless the context otherwise requires.
The Company was incorporated on April 27, 2015 under the BVI Business Companies Act, 2004 (the “BVI Act”) as a company limited by shares. As at the date of this prospectus, the Company is authorized to issue 200,000,000 Class A ordinary shares of $0.001 par value per share and 200,000,000 Class B ordinary shares of $0.001 par value per share. As of the date of this prospectus, there are 21,791,055 Class A ordinary shares and 7,100,000 Class B ordinary shares issued and outstanding.
The Company’s memorandum and articles of association do not permit a director to decide what compensation he or she will receive. All decisions about the compensation of directors will be recommended by the compensation committee, upon its formation, and approved by the board of directors as a whole, both acting only when a quorum of members is present.
The following are summaries of the material provisions of the Company’s memorandum and articles of association that will be in force at the time of the closing of this offering and the BVI Act insofar as they relate to the material terms of the Company’s Class A ordinary shares. Copies of the Company’s memorandum and articles of association are filed as exhibits to the registration statement of which this prospectus is a part.
Class A Ordinary Shares
General
Each Class A ordinary share in the Company confers upon the shareholder:
| ● | the right to one vote at a meeting of the shareholders of the Company or on any resolution of shareholders; |
| ● | the right to an equal share in any dividend paid by the Company; and |
| ● | the right to an equal share in the distribution of the surplus assets of the Company on its liquidation. |
All of the Company’s issued Class A ordinary shares are fully paid and non-assessable. Certificates representing the Class A ordinary shares are issued in registered form. The Company’s shareholders who are non-residents of the British Virgin Islands may freely hold and vote their Class A ordinary shares.
Class B Ordinary Shares
General
Each Class B ordinary share in the Company confers upon the shareholder the right to five votes at a meeting of the shareholders of the Company or on any resolution of shareholders.
Each Class B ordinary share may not be sold, assigned, transferred, alienated, commuted, anticipated, or otherwise disposed of (including by will or the laws of descent and distribution), or pledged or hypothecated as collateral for a loan or as security for the performance of any obligation, or be otherwise encumbered, and are not subject to attachment, garnishment, execution or other legal or equitable process, and any attempt to do so shall be null and void.
Each Class B ordinary share shall only be issued to Company’s or its subsidiaries’ employees or those entities of which its principal shareholder is an employee of the Company or its subsidiaries. Shareholder’s termination of employment with the Company or its subsidiaries shall immediately result in the cancellation of any and all issued and outstanding shares of Class B ordinary shares held by such shareholder on the date of termination.
Sale, assignment, transfer, alienation, or otherwise disposition of any Class A ordinary shares by common shareholder of Class B ordinary shares shall immediately result in the cancellation of an equal number of Class B ordinary shares on the date of such disposition.
Shareholder(s) of Class B ordinary shares in the Company shall not:
| ● | receive the right to any dividend paid by the Company; | |
| ● | receive the right to any distribution of the surplus assets of the Company on its liquidation. |
Transfer Agent and Registrar
The transfer agent and registrar for the Class A ordinary shares is VStock Transfer, LLC, 18 Lafayette Pace, Woodmere, NY 11598.
Distributions
The holders of the Company’s Class A ordinary shares are entitled to such dividends or other distributions as may be authorized by the Company’s board of directors, subject to the BVI Act and the Company’s memorandum and articles of association.
Voting rights of shareholders
Any action required or permitted to be taken by the shareholders must be taken at a duly called meeting of the shareholders entitled to vote on such action. At each meeting of shareholders, each shareholder who is present in person or by proxy (or, in the case of a shareholder being a corporation, by its duly authorized representative) will have one vote for each Class A ordinary share or five votes for each Class B ordinary share which such shareholder holds. An action that may be taken by the shareholders at a meeting may also be taken by a resolution of shareholders consented to in writing.
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Election of directors
Delaware law permits cumulative voting for the election of directors only if expressly authorized in the certificate of incorporation. The laws of the British Virgin Islands do not specifically prohibit or restrict the creation of cumulative voting rights for the election of the Company’s directors. Cumulative voting is not a concept that is accepted as a common practice in the British Virgin Islands, and the Company has made no provisions in its memorandum and articles of association to allow cumulative voting for elections of directors.
Meetings of shareholders
Any of the Company’s directors may convene a meeting of shareholders at any time and in any manner and place the director considers necessary or desirable. The director convening a meeting must give not less than 7 days’ notice of the meeting to those persons whose names appear as shareholders in the register of shareholders on the date of the notice and are entitled to vote at the meeting, and the other directors. The Company’s board of directors must convene a meeting of shareholders upon the written request of shareholders entitled to exercise 30% or more of the voting rights in respect of the matter for which the meeting is requested within 28 days of receiving the written request. A meeting of shareholders held in contravention of the requirement to give notice is valid if shareholders holding at least 90% of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and, for this purpose, the presence of a shareholder at the meeting shall constitute waiver in relation to all the shares which that shareholder holds.
The quorum for a meeting of shareholders is duly constituted if, at the beginning of the meeting, there are present in person or by proxy not less than 50% of the votes of the shares (or class or series of shares) entitled to vote on the resolutions to be considered at the meeting. A quorum may comprise a single shareholder or proxy. If within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened upon the requisition of the shareholders, will be dissolved. In any other case it will stand adjourned to the next business day in the jurisdiction in which the meeting was to have been held at the same time and place or to such other time and place as the directors may determine and, if at the adjourned meeting there are present within one hour from the time appointed for the meeting in person or by proxy not less than one third of the votes of the shares or each class or series of shares entitled to vote on the matter to be considered by the meeting, those present will constitute a quorum but otherwise the meeting will be dissolved.
A person other than an individual which is a shareholder may, by a resolution of its directors or other governing body, authorize any individual it thinks fit to act as its representative at any meeting of shareholders. The duly authorized representative shall be entitled to exercise the same powers on behalf of the person which he or she represents as that person could exercise if it were an individual shareholder.
Meetings of directors
The Company’s business and affairs are managed by its board of directors, who will make decisions by voting on resolutions of directors. The Company’s directors are free to meet at such times and in such manner and places within or outside the BVI as the directors determine to be necessary or desirable. A director must be given not less than 3 days’ notice of a meeting of directors. At any meeting of directors, a quorum will be present if not less than one half of the total number of directors is present, unless there are only 2 directors in which case the quorum is 2. An action that may be taken by the directors at a meeting may also be taken by a resolution of directors consented to in writing by a majority of the directors.
Protection of minority shareholders
The Company would normally expect British Virgin Islands courts to follow English case law precedents, which would permit a minority shareholder to commence a representative action, or derivative actions in the Company’s name, to challenge (1) an act which is ultra vires or illegal, (2) an act which constitutes a fraud against the minority by parties in control of the Company, (3) an infringement of individual rights of the minority shareholder, such as the right to vote and pre-emptive rights, and (4) an irregularity in the passing of a resolution which requires a special or extraordinary majority of the shareholders.
Pre-emptive rights
There are no pre-emptive rights applicable to the issue by the Company of new Class A ordinary shares under either British Virgin Islands law or the Company’s memorandum and articles of association.
Transfer of Class A ordinary shares
Subject to the restrictions in the Company’s memorandum and articles of association and applicable securities laws, any of the Company’s shareholders may transfer all or any of his or her Class A ordinary shares by written instrument of transfer signed by the transferor and containing the name and address of the transferee. The Company’s board of directors may not resolve to refuse or delay the transfer of any Class A ordinary shares the shareholder has failed to pay an amount due in respect of the Class A ordinary shares.
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Liquidation
If the Company’s wound up and the assets available for distribution among the Company’s shareholders are more than sufficient to repay all amounts paid to the Company on account of the issue of shares immediately prior to the winding up, the excess shall be distributable pari passu among those shareholders in proportion to the amount paid up immediately prior to the winding up on the shares held by them, respectively. If the Company is wound up and the assets available for distribution among the shareholders as such are insufficient to repay the whole of the amounts paid to the Company on account of the issue of shares, those assets shall be distributed so that, to the greatest extent possible, the losses shall be borne by the shareholders in proportion to the amounts paid up immediately prior to the winding up on the shares held by them, respectively. If the Company is wound up, the liquidator appointed by the Company may, in accordance with the BVI Act, divide among the Company’s shareholders in specie or kind the whole or any part of the Company’s assets (whether they shall consist of property of the same kind or not) and may, for such purpose, set such value as the liquidator deems fair upon any property to be divided and may determine how such division shall be carried out as between the shareholders or different classes of shareholders.
Calls on Class A ordinary shares and forfeiture of Class A ordinary shares
The Company’s board of directors may from time to time make calls upon shareholders for any amounts unpaid on their Class A ordinary shares in a written notice served to such shareholders at least 14 days prior to the specified date of payment. Where such a notice has been issued and its requirements have not been complied with, the directors may, at any time before the tender of payment, forfeit and cancel the Class A ordinary shares to which the notice relates.
Issuance of Class A ordinary shares
Subject to the provisions of the BVI Act, the Company’s board of directors may authorize the issuance of Class A ordinary shares at such times, to such persons, for such consideration and on such terms as they may determine by a resolution of directors, subject to the BVI Act, the Company’s memorandum and articles of association and any applicable requirements imposed from time to time by the SEC, The Nasdaq Capital Market, or by any recognized stock exchange on which the Company’s securities are listed.
Redemption of Class A ordinary shares
Subject to the provisions of the BVI Act and the Company’s memorandum and articles of association, the Company may not redeem Class A ordinary shares held by a shareholder without the consent of that shareholder whose Class A ordinary shares are to be redeemed.
Variation of rights
All or any of the rights attached to any class of shares may, subject to the provisions of the BVI Act, only be varied with the consent in writing of, or pursuant to a resolution passed at a meeting by, the holders of more than 50% of the issued shares of that class.
Changes in the number of shares we are authorized to issue and those in issue
The Company may from time to time by resolution of its board of directors:
| ● | amend the Company’s memorandum of association to increase or decrease the maximum number of shares the Company is authorized to issue; | |
| ● | subject to the Company’s memorandum of association, divide the Company’s authorized and issued shares into a larger number of shares; and | |
| ● | subject to the Company’s memorandum of association, combine the Company’s authorized and issued shares into a smaller number of shares. |
Inspection of books and records
Under the BVI Act, holders of the Company’s Class A ordinary shares are entitled, upon giving written notice to us, to inspect (i) the Company’s memorandum and articles of association, (ii) the register of shareholders, (iii) the register of directors and (iv) the minutes of meetings and resolutions of shareholders, and to make copies and take extracts from these documents and records. However, the Company’s directors can refuse access if they are satisfied that to allow such access would be contrary to the Company’s interests.
Rights of non-resident or foreign shareholders
There are no limitations imposed by the Company’s memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting rights on the Company’s shares. In addition, there are no provisions in the Company’s memorandum and articles of association governing the ownership threshold above which shareholder ownership must be disclosed.
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Exhibit 5.1
 |
Mourant Ozannes 5th Floor Waters Edge Building Meridian Plaza Road Town Tortola, British Virgin Islands
T +1 284 852 1700 F +1 284 852 1799 |
|
AGM Group Holdings Inc. c/o Creative Consultants (Hong Kong) Limited Room 1502-3 15/F., Connaught Commercial Building 185 Wanchai Road Wanchai, Hong Kong |
Date | 3 March 2020
Our ref | 8046841/77408579/2
Dear Sir or Madam
AGM Group Holdings Inc. (the Company)
We have acted as the Company's British Virgin Islands legal advisers in connection with the filing by the Company of a registration statement on Form F-3 (the Registration Statement) with the US Securities and Exchange Commission (the SEC) under the US Securities Act of 1933 (the Securities Act). The Registration Statement relates to the offering of:
| (a) | Class A ordinary shares of par value US$0.001 each in the Company (the Class A Ordinary Shares); |
| (b) | warrants that entitle the holder to purchase Class A ordinary shares of the Company, debt securities or any combination thereof (the Warrants) that may be issued pursuant to one or more warrant agreements (the Warrant Agreements) between the Company and a bank or trust company to be identified therein as the warrant agent; |
| (c) | senior debt securities that may be issued under one or more senior indentures (the Senior Indentures) between the Company and a trustee to be specified in any accompanying prospectus supplement of the Company (the Senior Debt Securities); |
| (d) | subordinated debt securities that may be issued under one or more subordinated indentures (the Subordinated Indentures and, together with the Senior Indentures, the Indentures) between the Company and a trustee to be specified in the Prospectus Supplement of the Company (the Subordinated Debt Securities and, together with the Senior Debt Securities, the Debt Securities); |
| (e) | units comprising one or more of the securities described within the Registration Statement (the Units) that may be issued pursuant to one or more unit agreements (the Unit Agreements) between the Company and a unit agent to be identified therein; |
| (f) | share purchase contracts and share purchase units relating to a specific number of Class A ordinary shares of the Company or other securities described within the Registration Statement at a future date or dates (the Purchase Contracts); and |
| (g) | rights to purchase Class A ordinary shares of the Company that may be offered by the Company to security holders (the Rights) under a separate rights agent agreement to be entered into between the Company and a bank or trust company, as rights agent (the Rights Agreement), |
each as described more fully within the Registration Statement and in aggregate not exceeding US$100,000,000.
Mourant Ozannes is a British Virgin Islands partnership
| BVI | CAYMAN ISLANDS | GUERNSEY | HONG KONG | JERSEY | LONDON |  |
The Company has asked us to provide this opinion in connection with the Registration Statement and the issuance of the Securities.
| 1. | Documents, searches and definitions |
| 1.1 | We have reviewed a copy of each of the following documents for the purposes of this opinion: |
| (a) | the Registration Statement; |
| (b) | the Company's certificate(s) of incorporation and memorandum and articles of association obtained from the Company Search (defined below); |
| (c) | a certificate of the Company's registered agent dated 26 February 2020 (the Registered Agent's Certificate); |
| (d) | a copy of the Company's register of members; and |
| (e) | a certificate of good standing for the Company dated 3 March 2020 issued by the Registrar (the Certificate of Good Standing). |
| 1.2 | We have carried out the following searches (together, the Searches) in relation to the Company: |
| (a) | a search of the records maintained by the Registrar (defined below) that were on file and available for public inspection on 3 March 2020 (the Company Search); and |
| (b) | a search of the records of proceedings in the BVI Courts (defined below) available for public inspection contained in the judicial enforcement management system (the electronic register of proceedings) maintained at the registry of the High Court of Justice of the Virgin Islands (the High Court) on 3 March 2020 (the High Court Search). |
| 1.3 | In this opinion: |
| (a) | Agreements means each Warrant Agreement, Indenture, Unit Agreement, Purchase Contract and Rights Agreement; |
| (b) | Authorising Resolutions means resolutions to be passed by the directors of the Company or an authorised committee thereof authorising the issue of Class A Ordinary Shares, Warrants, Debt Securities, Units, Purchase Contracts, Rights, or any combination thereof. |
| (c) | BVI means the territory of the British Virgin Islands; |
| (d) | BVI Courts means the Eastern Caribbean Supreme Court, Court of Appeal (Virgin Islands) and the High Court (Civil and Commercial Divisions), and BVI Court means any of them; |
| (e) | Companies Act means the BVI Business Companies Act 2004; |
| (f) | executed means (unless the context requires otherwise) that a document has been signed, dated and unconditionally delivered; |
| (g) | Insolvency Act means the Insolvency Act 2003; |
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| (h) | insolvent has the meaning given in the Insolvency Act; |
| (i) | non-assessable means, in relation to a Class A Ordinary Share, that the purchase price for which the Company agreed to issue that Class A Ordinary Share has been paid in full to the Company and that no further sum is payable to the Company in respect of that Class A Ordinary Share; |
| (j) | Prospectus means the prospectus that forms part of the Registration Statement; |
| (k) | Prospectus Supplement means any prospectus supplements to the Prospectus that will be filed with the SEC in the future; |
| (l) | Registrar means the Registrar of Corporate Affairs appointed under the Companies Act; |
| (m) | Securities means the Class A Ordinary Shares, the Warrants, the Debt Securities, the Units, the Purchase Contracts and the Rights; and |
| (n) | signed means that a document has been duly signed or sealed. |
| 2. | Assumptions |
We have assumed (and have not independently verified) that:
| 2.1 | each document examined by us: |
| (a) | whether it is an original or copy, is (along with any date, signature, initial, stamp or seal on it) genuine and complete, up-to-date and (where applicable) in full force and effect; and |
| (b) | was (where it was executed after we reviewed it) executed in materially the same form as the last draft of that document examined by us; |
| 2.2 | in approving the issuance of the Securities in accordance with the Registration Statement and the relevant Agreement, each director of the Company: |
| (a) | acted or will act honestly, in good faith and in what the director believed or believes to be the best interests of the Company; |
| (b) | exercised or will exercise the director's powers as a director for a proper purpose; and |
| (c) | exercised or will exercise the care, diligence and skill that a reasonable director would exercise in the same circumstances; |
| 2.3 | each director of the Company (and any alternate director): |
| (a) | has disclosed or will disclose to each other director any interest of that director (or alternate director) in the transactions contemplated by the Registration Statement and the Agreements in accordance with the Company's memorandum and articles of association and the Companies Act; and |
| (b) | disclosed or will disclose to each other director any interest of that director (or alternate director) in the issuance of the Securities in accordance with the Company's memorandum and articles of association and the Companies Act; |
| 2.4 | any Authorising Resolutions will be duly passed, will be in full force and effect and will be effective under all applicable laws in authorising the Company to issue any relevant Securities and enter into any relevant Agreement; |
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| 2.5 | each document examined by us that has been signed by the Company: |
| (a) | has been signed by the person(s) authorised by the Company to sign it; |
| (b) | (where any signatory is a body corporate) it has been signed in accordance with that body corporate's constitution and then current signing authorities; and |
| (c) | has been dated and unconditionally delivered by the Company; |
| 2.6 | each party to each Agreement has: |
| (a) | the capacity and power; |
| (b) | taken or will take all necessary action; and |
| (c) | obtained or made (or will obtain and will make) all necessary agreements, approvals, authorisations, consents, filings, licences, registrations and qualifications (whether as a matter of any law or regulation applicable to it or as a matter of any agreement binding upon it), |
to execute, and perform its obligations under, that Agreement;
| 2.7 | the Registration Statement has been authorised and executed by each party to it and each Agreement has, or will be, authorised and executed by each party to it; |
| 2.8 | there are no documents or arrangements to which the Company is party or resolutions of the Company's directors or shareholders that conflict with, or would be breached by, any term of the Registration Statement, the Agreements or the issuance of any of the Securities; |
| 2.9 | the Company has executed, or will execute, each document, and did, or will do, each other act and thing, that it is required to execute or do under each relevant document in connection with the issuance of the Securities (including the Registration Statement and each Agreement); |
| 2.10 | the Securities have been (or will be) issued in accordance with all applicable laws, the memorandum and articles of association of the Company and the terms of the Registration Statement and the relevant Agreement, and any Agreement will be in full force and effective and legal, binding and enforceable under all applicable laws at the time that the relevant Securities are issued; |
| 2.11 | the Registration Statement and any required amendment thereto have all become effective under the Securities Act and the Prospectus and any and all future supplement to the Prospectus required by applicable laws have been delivered and filed as required by such laws; |
| 2.12 | the Company was not insolvent and will not become insolvent as a result of executing, or performing its obligations under, any document relating to the issuance of the Securities (including the Registration Statement and each Agreement) and at the time the Company issues Securities to the subscriber of the relevant Securities no steps will have been taken, or resolutions passed, to appoint a liquidator of the Company or a receiver in respect of the Company or any of its assets; |
| 2.13 | the Company is not carrying on financial services business (as defined in the Financial Services Commission Act 2001); |
| 2.14 | the Company is not, nor is it owned or controlled directly or indirectly by, a state or sovereign entity; |
| 2.15 | none of our opinions will be affected by the laws or public policy of any foreign jurisdiction; |
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| 2.16 | in relation to the Searches: |
| (a) | all public records of the Company we have examined are complete and accurate; |
| (b) | all filings required to be made in relation to the Company with the Registrar have been made and there was no information which had been filed that did not appear on the records of the Company at the time of the Company Search; and |
| (c) | the information disclosed by the Searches was at the time of each search, and continues to be, accurate and complete; and |
| 2.17 | the Registered Agent's Certificate was and remains at the date of this opinion accurate and complete. |
| 3. | Opinion |
Subject to the assumptions, observations, qualifications and limitations set out in this opinion, and to matters not disclosed to us, we are of the following opinion.
| 3.1 | Status: the Company is registered under the Companies Act, validly exists under the laws of the BVI and is in good standing with the Registrar. For the purposes of this opinion, good standing means only that, on the date of issue of the Certificate of Good Standing, the Company is listed on the register of companies maintained by the Registrar, has paid to the Registrar all fees, annual fees and penalties due and payable for the current year and has filed with the Registrar a copy of its register of directors which is complete (to the satisfaction of the Registrar as to the requisite information relating to each director and is properly filed) or is not yet due to file its register of directors with the Registrar. |
| 3.2 | Class A Ordinary Shares: when (i) the Class A Ordinary Shares have been specifically authorised by the Authorising Resolutions, (ii) the terms of the issuance and sale of the Class A Ordinary Shares have been duly established in conformity with the memorandum and articles of association of the Company and the Authorising Resolutions, (iii) the Class A Ordinary Shares have been issued and delivered as contemplated by the Registration Statement, the Prospectus and the Prospectus Supplement in accordance with the applicable underwriting or other purchase agreement or upon conversion or exercise of any Securities offered under the Registration Statement against payment therefor, (iv) the Company has received the consideration provided for in the Authorising Resolutions and the applicable underwriting agreement or other purchase agreement and such consideration per share is not less than the par value per Class A Ordinary Share, and (v) the name of the respective shareholder is entered in the Company's register of members, such Class A Ordinary Shares will be validly issued, fully paid and non-assessable. |
| 3.3 | Warrants: when (i) the Warrants have been specifically authorised for issuance by the Authorising Resolutions, (ii) the applicable Warrant Agreement relating to the Warrants has been duly authorised, executed and delivered by the Company, (iii) the terms of the Warrants and of their issuance and sale have been duly established in conformity with the applicable Warrant Agreement and the Authorising Resolutions, (iv) the Warrants have been duly executed by the Company and countersigned in accordance with the applicable Warrant Agreement and Authorising Resolutions and issued and delivered as contemplated by the Registration Statement, the Prospectus and the Prospectus Supplement in accordance with the applicable underwriting or other purchase agreement against payment therefor, and (v) the Company has received the consideration provided for in the Authorising Resolutions and the applicable underwriting agreement or other purchase agreement, such Warrants will be legally binding obligations of the Company, enforceable against the Company in accordance with their terms. |
| 3.4 | Debt Securities: when (i) the Debt Securities have been specifically authorised for issuance by the Authorising Resolutions, (ii) the applicable Indentures relating to the Debt Securities has been duly authorised, executed and delivered by the Company, (iii) the terms of the Debt Securities and of their issuance and sale have been duly established in conformity with the applicable Indentures and the Authorising Resolutions, (iv) the Debt Securities have been duly executed by the Company and countersigned in accordance with the applicable Indentures and Authorising Resolutions and issued and delivered as contemplated by the Registration Statement, the Prospectus and the Prospectus Supplement in accordance with the applicable underwriting or other purchase agreement against payment therefor, and (v) the Company has received the consideration provided for in the Authorising Resolutions and the applicable underwriting agreement or other purchase agreement, such Debt Securities will be legally binding obligations of the Company, enforceable against the Company in accordance with their terms. |
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| 3.5 | Units: when (i) the Units have been specifically authorised for issuance by the Authorising Resolutions, (ii) the applicable Unit Agreement has been duly authorised, executed and delivered, (iii) the terms of the Units and of their issuance and sale have been duly established in conformity with the applicable Unit Agreement and the Authorising Resolutions, (iv) the Units have been duly executed and delivered in accordance with the applicable Unit Agreement and issued and delivered as contemplated by the Registration Statement, the Prospectus and the Prospectus Supplement in accordance with the applicable underwriting or other purchase agreement against payment therefor, and (v) the Company has received the consideration provided for in the Authorising Resolutions and the applicable underwriting agreement or other purchase agreement, such Units will be legally binding obligations of the Company, enforceable against the Company in accordance with their terms. |
| 3.6 | Purchase Contracts: when (i) the Purchase Contracts have been specifically authorised for issuance by the Authorising Resolutions, (ii) the applicable Purchase Contract has been duly authorised, executed and delivered, (iii) the terms of the Purchase Contracts and of their issuance and sale have been duly established in conformity with the applicable Purchase Contract and the Authorising Resolutions, (iv) the Purchase Contracts have been duly executed and delivered in accordance with the applicable Purchase Contract and issued and delivered as contemplated by the Registration Statement, the Prospectus and the Prospectus Supplement in accordance with the applicable underwriting or other purchase agreement against payment therefor, and (v) the Company has received the consideration provided for in the Authorising Resolutions and the applicable underwriting agreement or other purchase agreement, such Purchase Contracts will be legally binding obligations of the Company, enforceable against the Company in accordance with their terms. |
| 3.7 | Rights: when (i) the Rights have been specifically authorised for issuance by the Authorising Resolutions, (ii) the applicable Rights Agreement has been duly authorised, executed and delivered, (iii) the terms of the Rights and of their issuance and sale have been duly established in conformity with the applicable Rights Agreement and the Authorising Resolutions, (iv) the Rights have been duly executed and delivered in accordance with the applicable Rights Agreement and issued and delivered as contemplated by the Registration Statement, the Prospectus and the Prospectus Supplement in accordance with the applicable underwriting or other purchase agreement against payment therefor, and (v) the Company has received the consideration provided for in the Authorising Resolutions and the applicable underwriting agreement or other purchase agreement, such Rights will be legally binding obligations of the Company, enforceable against the Company in accordance with their terms. |
| 4. | Qualifications and observations |
This opinion is subject to the following qualifications and observations.
| 4.1 | This opinion is subject to all laws relating to bankruptcy, dissolution, insolvency, re-organisation, liquidation, moratorium, court schemes and other laws and legal procedures of general application affecting or relating to the rights of creditors. |
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| 4.2 | When the term enforceable or binding is used in paragraph 3 (Opinion) of our opinion, it means that an obligation is of a type that the BVI Courts will enforce. It does not mean that the obligation will necessarily be enforced in all circumstances or in accordance with its terms or that any particular remedy will be available. In particular, but without limitation: |
| (a) | enforcement may be prevented by statutory provisions relating to the setting aside of unfair preferences, undervalue transactions, voidable floating charges, extortionate credit transactions and disclaiming of onerous property; |
| (b) | enforcement may be limited by general principles of equity (for example, equitable remedies like specific performance and injunction are discretionary and may not be available where damages are considered to be an adequate remedy); |
| (c) | enforcement of obligations may be invalidated by reason of duress, fraud, misrepresentation, mistake or undue influence; |
| (d) | contractual provisions that require a defaulting party to pay a sum that is out of all proportion to the innocent party's legitimate interest in the agreement being performed or which seek to punish a defaulting party may be held to be unenforceable on the ground that they constitute penalties; |
| (e) | provisions in an agreement or in a BVI company's memorandum or articles of association that fetter any statutory power may not be enforceable; |
| (f) | the BVI Courts will not enforce the terms of an agreement if: |
| (i) | they are, or their performance would be, illegal or contrary to public policy in the BVI or in any other jurisdiction; or |
| (ii) | they would conflict with or breach applicable sanctions or exchange control regulations; |
| (g) | the BVI Courts may not enforce the terms of an agreement: |
| (i) | for the payment or reimbursement of, or indemnity against, the costs of enforcement (actual or contemplated) or of litigation brought before the BVI Courts or foreign courts or where the BVI Courts or foreign courts have themselves made an order for costs; |
| (ii) | that constitute an agreement to negotiate or an agreement to agree; |
| (iii) | that would involve the enforcement of any foreign revenue, penal or other public laws or an indemnity in respect of any of these laws; |
| (iv) | that seek to exclude the jurisdiction of the BVI Courts; |
| (v) | that relate to confidentiality (which may be overridden by the requirements of legal process); |
| (vi) | that provide that any of the terms of that agreement can only be amended or waived in writing (and not orally or by course of conduct); or |
| (vii) | that permit the severance of illegal, invalid or unenforceable terms; |
| (h) | a judgment of a BVI Court or a foreign court given in respect of contractual obligations may be held to supersede them (so they may not survive the judgment even if expressed to do so); |
| (i) | the BVI Courts may refuse to allow unjust enrichment; |
| (j) | claims may become time barred or may be subject to rights and defences of abatement, acquiescence, counter-claim, estoppel, frustration, laches, set-off, waiver and similar defences; |
| (k) | the effectiveness of terms that seek to exclude or limit a liability or duty otherwise owed, or to indemnify a person in respect of a loss caused by the act or omission of that person, may be limited by law; and |
| (l) | where any party to an agreement is party to it in more than one capacity that party may not be able to enforce obligations owed by it to itself. |
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| 4.3 | Where a director fails, in accordance with the Companies Act, to disclose an interest in a transaction entered into by a BVI company, the transaction is voidable. |
| 4.4 | The Company Search will not reveal any document which has not been filed with the Registrar or which was filed but was not registered or did not appear on the Company's file at the time of the Company Search. |
| 4.5 | The High Court Search will not reveal (among other things) if there are any: |
| (a) | proceedings or appointments that have not been filed or that have been filed but have not been recorded in the High Court's judicial enforcement management system; |
| (b) | proceedings commenced prior to 1 January 2000 if no document has been filed since that date; |
| (c) | proceedings against the Company that have been threatened but not filed; |
| (d) | files that have been sealed pursuant to a court order; or |
| (e) | arbitration proceedings in which the Company is a defendant or respondent. |
| 4.6 | The Insolvency Act requires a receiver appointed in respect of a BVI company (or any of its assets) to file a notice of appointment with the Registrar and (if the company is or has been a regulated person (as defined in the Insolvency Act)) with the British Virgin Islands Financial Services Commission. If the receiver fails to do so, the receiver will be guilty of an offence and liable to a fine. This does not, however, invalidate the receiver's appointment. |
| 5. | Limitations |
| 5.1 | This opinion is limited to the matters expressly stated in it and it is given solely in connection with the Registration Statement and the issuance of the Securities. |
| 5.2 | For the purposes of this opinion, we have only examined the documents listed in paragraph 1.1 above (Documents) and carried out the Searches. We have not examined any term or document incorporated by reference, or otherwise referred to, whether in whole or part, in the Registration Statement and we offer no opinion on any such term or document. |
| 5.3 | We have made no investigation of, and express no opinion with respect to, the laws of any jurisdiction other than the BVI or the effect of the Registration Statement under those laws. In particular, we express no opinion as to the meaning or effect of any foreign statutes referred to in the Registration Statement. |
| 5.4 | We assume no obligation to advise the Company (or any person we give consent to rely on this opinion) in relation to changes of fact or law that may have a bearing on the continuing accuracy of this opinion. |
| 6. | Governing law |
This opinion, and any non-contractual obligations arising out of it, are governed by, and to be interpreted in accordance with, BVI laws in force on the date of this opinion.
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| 7. | Consent |
| 7.1 | This opinion may only be used in connection with the offer and sale of the Securities while the Registration Statement is effective. |
| 7.2 | We consent to: |
| (a) | the filing of a copy of this opinion as Exhibit 5.1 to the Registration Statement; and |
| (b) | reference to us being made in the section of the Prospectus under the heading Legal Matters and elsewhere in the Prospectus. |
In giving this consent, we do not admit that we are included in the category of persons whose consent is required under section 7 of the Securities Act or the rules and regulations promulgated by the SEC under the Securities Act.
Yours faithfully
/s/ Mourant Ozannes
Mourant Ozannes
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Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in this Registration Statement of AGM Group Holdings Inc. as of and for the period ended December 31, 2018 of our report dated May 15, 2019 included in Form S-3 of Registration Statements.
We also consent to the reference to our firm under the caption "Experts" in this Registration Statement.
/s/ JLKZ CPA LLP
Flushing, New York
March 3, 2020
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the incorporation by reference in this Registration Statement on Form F-3 of our report dated April 30, 2018 with respect to the audited consolidated financial statements of AGM Group Holdings Inc. as of December 31, 2017 and for the years ended December 31, 2017 and 2016.
We also consent to the references to us under the heading “Experts” in such Registration Statement.
/s/ MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
March 1, 2020
