DarkIris Inc F-1, filed Sep 30, 2026
DarkIris Inc. (DKI)
As filed with the U.S. Securities and Exchange Commission on September 30, 2026.
Registration No. 333-[*]
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
DARKIRIS INC.
黑瞳科技
(Exact Name of Registrant as Specified in its Charter)
| Cayman Islands | 7372 | Not Applicable | ||
| (State
or other jurisdiction of incorporation or organization) |
(Primary
Standard Industrial Classification Code Number) |
(I.R.S.
Employer Identification No.) |
6/F, Cheong Sun Tower
No. 118 Wing Lok Street
Sheung Wan, Hong Kong
Tel: +852 6670 1632
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Cogency Global Inc.
122 East 42nd Street, 18th Floor
New York, NY 10168
+1 800-221-0102
(Name, address, including zip code, and telephone number, including area code, of agent for service)
Copies of all communications, including communications sent to agent for service, should be sent to:
Lawrence
S. Venick, Esq. Los
Angeles, CA 90067 |
Jing
Ye, Esq. Ye & Associates, P.C. 275 5th Avenue, 2nd Floor New York, NY 10016 Tel: (929) 300-7489 |
Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.
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, 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 post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering. ☐
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. ☐
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, as amended, or until the registration statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.
| PRELIMINARY PROSPECTUS (Subject to Completion) | Dated September 30, 2026 |
DARKIRIS INC.
黑瞳科技
Up to 4,166,666 Units, each consisting of one Class A Ordinary Share and one Warrant to purchase one Class A Ordinary Share
Up to 4,166,666 Pre-Funded Units, each consisting of one Pre-Funded Warrant to purchase one Class A Ordinary Share and one Warrant to purchase one Class A Ordinary Share
Up to 4,166,666 Class A Ordinary Shares included in the Units
Up to 4,166,666 Pre-Funded Warrants to Purchase Class A Ordinary Shares included in the Pre-Funded Units
Up to 41,666,666 Warrants to Purchase Class A Ordinary Shares
Up to 52,380,944 Class A Ordinary Shares Issuable upon Exercise of the Warrants to Purchase Class A Ordinary Shares at a Zero Exercise Price
Up to 4,166,666 Class A Ordinary Shares Issuable upon Exercise of the Pre-Funded Warrants
This preliminary prospectus relates to a best-efforts public offering by DarkIris Inc. (the “Company,” “DarkIris,” “we,” “us” or “our”) of up to 4,166,666 units (the “Units”), with each Unit consisting of (i) one Class A Ordinary Share, par value $0.0016 per share (the “Class A Ordinary Shares”), and (ii) one warrant (each, a “Warrant”) to purchase one Class A Ordinary Share or otherwise receive a greater number of Class A Ordinary Shares pursuant to the zero exercise price option described below. We are also offering up to 4,166,666 pre-funded units (the “Pre-Funded Units”), with each Pre-Funded Unit consisting of (i) one pre-funded warrant (each, a “Pre-Funded Warrant”) to purchase one Class A Ordinary Share, and (ii) one Warrant. The Pre-Funded Units are being offered in lieu of Units to any investor whose purchase of Units in this offering would result in such investor, together with its affiliates, beneficially owning more than 4.99% (or, at the election of the investor, 9.99%) of our outstanding Class A Ordinary Shares immediately following the consummation of this offering. We are offering the Units at an assumed public offering price of $1.20 per Unit and the Pre-Funded Units at an assumed public offering price of $1.1999 per Pre-Funded Unit (equal to the public offering price per Unit minus $0.0001).
We are registering up to an aggregate of 56,547,610 Class A Ordinary Shares under this prospectus, consisting of (i) up to 4,166,666 Class A Ordinary Shares included in the Units, or up to 4,166,666 Class A Ordinary Shares issuable upon exercise of the Pre-Funded Warrants, and (ii) up to 52,380,944 Class A Ordinary Shares issuable upon exercise of the Warrants, assuming that all holders exercise the Warrants using the zero exercise price option.
Each Warrant will be immediately exercisable at an initial exercise price equal to 170% of the public offering price per Unit and will expire six (6) months after its issuance, subject to the terms of the Warrant. The exercise price and the number of Class A Ordinary Shares issuable upon exercise of the Warrants will be subject to customary adjustments for share dividends, share splits, combinations, reclassifications and certain other corporate transactions, as further described herein.
Each Pre-Funded Warrant will be immediately exercisable at an exercise price of $0.0001 per share and will not expire. Holders of Pre-Funded Warrants will also receive Warrants as part of their Pre-Funded Units.
If, at the time of exercise of a Warrant, there is no effective registration statement registering, or the prospectus contained therein is not available for, the issuance of the Class A Ordinary Shares underlying the Warrant, the holder may elect to exercise the Warrant on a cashless basis. Upon a cashless exercise, the holder will be entitled to receive the number of Class A Ordinary Shares determined by dividing [(A-B) × X] by A, where “A” is the trading price determined in accordance with the Warrant, “B” is the applicable exercise price and “X” is the number of Class A Ordinary Shares that would be issuable upon a cash exercise of the Warrant. Subject to customary adjustments, the maximum number of Class A Ordinary Shares issuable upon conventional cashless exercise of the Warrants is 4,166,666.
A holder may also exercise a Warrant using the zero exercise price option at any time while the Warrant is outstanding. Under the zero exercise price option, a holder will be entitled to receive approximately 12 Class A Ordinary Shares for each Warrant exercised without paying any additional cash consideration to us. We expect holders to elect the zero exercise price option rather than exercise the Warrants for cash. The zero exercise price option permits a holder to receive more Class A Ordinary Shares without paying additional consideration than the holder would receive upon a cash exercise. Accordingly, we will likely not receive any proceeds from the exercise of the Warrants. If any Warrants are nevertheless exercised for cash, we intend to use the resulting proceeds for working capital and other general corporate purposes.
Please see “Description of Securities We Are Offering” for further information.
The Units and Pre-Funded Units will have no stand-alone rights and will not be certificated or issued as stand-alone securities. The Class A Ordinary Shares and the accompanying Warrants may be purchased only together as Units in this offering (or, in the case of Pre-Funded Units, Pre-Funded Warrants and accompanying Warrants), but the component securities will be issued separately and will be immediately separable upon issuance.
Our Class A Ordinary Shares are listed on the Nasdaq Capital Market under the symbol “DKI.” On September 29, 2026, the last reported sale price of our Class A Ordinary Shares on the Nasdaq Capital Market was $2.55 per share. Because each Unit includes both one Class A Ordinary Share and one Warrant, the public offering price per Unit is not directly comparable to the market price of one Class A Ordinary Share.
The public offering price for the securities in this offering is at a significant discount to the current market price. The final public offering price will be determined at the time of pricing through negotiations among us, Prime Number Capital, LLC (the “Placement Agent”) and the investors based on a number of factors, including our history and prospects, the development of our business, our business plans and the extent to which they have been implemented, an assessment of our management, conditions in the industries in which we operate, our past and present operating results, the experience of our executive officers, prevailing market conditions, and the trading price and trading volume of our Class A Ordinary Shares. The assumed public offering price used throughout this prospectus may not be indicative of the final public offering price.
There is no established public trading market for the Units, Pre-Funded Units, Pre-Funded Warrants, or the Warrants, and we do not expect a market for these securities to develop. We do not intend to apply to list the Units, Pre-Funded Units, Pre-Funded Warrants, or the Warrants on The Nasdaq Capital Market or any other national securities exchange or trading system. Without an active trading market, the liquidity of the Pre-Funded Warrants and Warrants will be limited.
We have a dual-class voting structure consisting of Class A Ordinary Shares and Class B Ordinary Shares (collectively, the “Ordinary Shares”). Each Class A Ordinary Share is entitled to one vote, and each Class B Ordinary Share is entitled to one hundred and fifty (150) votes. As of the date of this prospectus, Hong Zhifang, our Chief Executive Officer, director and controlling shareholder, beneficially owns approximately 20.49% of our issued and outstanding Ordinary Shares in aggregate, representing approximately 97.48% voting power of our Company in aggregate. After giving effect to the sale of all Units offered hereby and the exercise of all Warrants using the zero exercise price option, Hong Zhifang will beneficially own approximately 0.73% of our issued and outstanding Ordinary Shares and approximately 52.55% of their total voting power. As a result, we expect to remain a “controlled company” within the meaning of the Nasdaq Listing Rules. See “Risk Factors — Risks Relating to Our Securities and This Offering.”
As of the date of this prospectus, we had 1,667,701 Class A Ordinary Shares and 429,886 Class B Ordinary Shares issued and outstanding. If all Units offered hereby are sold and all Warrants are exercised using the zero exercise price option, we will issue up to an aggregate of 56,547,610 Class A Ordinary Shares in connection with this offering, and such shares would represent approximately 96.42% of the total number of our Ordinary Shares outstanding after giving effect to this offering.
We have engaged the Placement Agent to act as our exclusive placement agent in connection with this offering. The Placement Agent has agreed to use its best efforts to arrange for the sale of the securities offered by this prospectus. The Placement Agent is not purchasing or selling any of the securities offered hereby and is not required to arrange for the purchase or sale of any specific number or dollar amount of securities.
There is no minimum number of Units or minimum amount of proceeds required as a condition to the closing of this offering. We have not established an escrow, trust or similar arrangement for funds received from investors. Because this is a best-efforts offering with no minimum offering amount, we may sell substantially fewer than all of the Units offered hereby, which would significantly reduce the proceeds received by us. After the closing, investors will not be entitled to a refund solely because we have not sold enough Units or raised sufficient proceeds to implement the business plans. Upon the closing, the proceeds from the sale of the Units will be available for our immediate use despite uncertainty as to whether we will have raised sufficient proceeds to fund our intended uses.
We expect to conduct one closing for all securities sold in this offering. The offering will terminate upon completion of the single closing, which is expected to occur on October 6, 2026, unless we terminate the offering before that date. The public offering price per Unit will be fixed for the duration of this offering.
We are a “foreign private issuer,” as defined in the Securities Exchange Act of 1934, as amended, or the Exchange Act, and are exempt from certain rules under the Exchange Act that impose certain disclosure obligations and procedural requirements for proxy solicitations under Section 14 of the Exchange Act. Our principal shareholders are exempt from the reporting provisions and our executive officers, directors and principal shareholders are exempt from the short-swing profit recovery provisions contained in Section 16 of the Exchange Act. Moreover, we are not required to file periodic reports and financial statements with the Securities and Exchange Commission as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
We are an “emerging growth company” as defined under the federal securities laws and will be subject to reduced public company reporting requirements.
Investing in our securities involves risks. See “Risk Factors” beginning on page 9 of this prospectus for a discussion of the factors you should carefully consider before deciding to purchase these securities.
The Units and Pre-Funded Units offered in this prospectus, consisting of Class A Ordinary Shares (or Pre-Funded Warrants in the case of Pre-Funded Units) and Warrants, are securities of DarkIris Inc., a Cayman Islands holding company that has no material operations of its own. We conduct our operations substantially through our subsidiaries incorporated in Hong Kong, namely Quantum Arts Co., Limited (“Quantum”) and Hongkong Stellar Wisdom Co., Limited (“Stellar”). Quantum is primarily engaged in the development, publishing and operation of mobile digital games, and Stellar is primarily engaged in video marketing on social media and video content platforms. Substantially all of our operations are located in Hong Kong, and a majority of our customers are located in Hong Kong. We also incorporated a subsidiary DarkIris Digital Technology (Xiamen) Co., Ltd. in October 2025, which focuses on new games development and has obtained business registration certificates to conduct its business operations in mainland China.
Hong Kong is a Special Administrative Region of the PRC and currently maintains a legal and regulatory system separate from that of mainland China. The common law, rules of equity, ordinances, subordinate legislation and customary law previously in force in Hong Kong have been maintained, and Hong Kong continues to use the English common-law system. Hong Kong has historically exercised a high degree of autonomy over its domestic affairs, including its currencies, immigration and customs operations, public finance and judicial system.
The PRC government has initiated a series of regulatory actions and made public statements relating to the regulation of certain business operations in China, including actions relating to illegal activities in the securities markets, overseas listings by China-based issuers, cybersecurity and data security reviews, and anti-monopoly enforcement. Although we now have an operating subsidiary in mainland China, substantially all of our operations are conducted in Hong Kong, and we believe that we are not currently materially affected by these regulatory actions. However, because of uncertainty concerning the potential application and interpretation of PRC laws and regulations, we cannot assure you that the relevant PRC governmental authorities will agree with our conclusions or will not adopt new laws, regulations or interpretations that apply to our operations or this offering.
As of the date of this prospectus, we have not been materially affected by statements or regulatory actions by the PRC government indicating an intention to exercise greater oversight and control over offerings conducted overseas or foreign investment in China- or Hong Kong-based issuers. However, due to the long-arm provisions under current PRC laws and regulations, there remains regulatory uncertainty concerning the implementation, interpretation and enforcement of PRC laws. The PRC government may exercise significant oversight and discretion, and its policies, regulations, rules and enforcement practices may change rapidly and with little advance notice to us or our shareholders. In addition, PRC laws and regulations may be interpreted and applied inconsistently by different agencies or authorities and inconsistently with our current policies and practices.
Because we now have a subsidiary in mainland China, we are subject to PRC laws and regulations governing our PRC operations. Compliance with such laws and regulations may be costly and could delay or impede the development of our business, result in negative publicity, increase our operating costs, require significant management time and attention, require us to obtain additional licenses, permits, approvals or certificates, or subject us to inquiries, investigations, remedies, administrative penalties, fines, criminal liabilities or orders requiring us to modify or cease certain business practices. If existing or future PRC laws and regulations are interpreted or applied to our Hong Kong operations, we may face similar compliance burdens with respect to those operations. Any such actions could materially and adversely affect our business, financial condition and results of operations and cause the value of our Class A Ordinary Shares to significantly decline or become worthless.
Currently, there are no material or limitation under Hong Kong law on the conversion of Hong Kong dollars into foreign currencies or the transfer of currencies out of Hong Kong. The PRC laws and regulations on currency conversion control apply to our PRC subsidiary and could have an impact on the transfer of cash between our PRC subsidiary and DarkIris or our Hong Kong subsidiaries. In addition, if existing or future PRC laws and regulations become applicable to our Hong Kong subsidiaries, to the extent that our cash or assets are in Hong Kong or mainland China or held by a Hong Kong or PRC entity, such funds or assets may not be available to fund operations or for other uses outside Hong Kong or mainland China due to intervention by, or the imposition of restrictions and limitations by, the PRC government. If the PRC government intervenes in or restricts our subsidiaries’ ability to transfer cash within our corporate group, including for distribution to U.S. investors, our business, financial condition and results of operations could be materially and adversely affected, and our Class A Ordinary Shares could significantly decline in value or become worthless.
We are aware that, on December 28, 2021, the Cyberspace Administration of China, or the CAC, and certain other PRC governmental authorities promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022. On September 24, 2024, the State Council of the PRC promulgated the Regulations on Network Data Security Management, which became effective on January 1, 2025. These regulations impose cybersecurity review and other requirements on certain critical information infrastructure operators and data processors conducting activities that affect or may affect national security. Our operating subsidiaries publish their games through third-party platforms that do not disclose the personal information of game players to us, and we do not collect or hold the personal information of game players. Neither DarkIris nor any of our subsidiaries has been notified by any PRC governmental authority that we are classified as a critical information infrastructure operator or data processor subject to cybersecurity review, and neither DarkIris nor any of our subsidiaries has been involved in any investigation initiated by the CAC or any other competent PRC governmental authority or received any inquiry, notice, warning or sanction in this respect. We believe that we are not currently required to undergo a cybersecurity review in connection with this offering.
However, we cannot rule out the possibility that the PRC government will impose licensing or pre-approval requirements on our overseas securities offerings or on our gaming industry operations in the future. In that case, we may be unable to comply with such requirements in a timely manner or at all, which could materially and adversely affect our business and impede our ability to continue operations.
We are also aware that, on February 17, 2023, the China Securities Regulatory Commission, or the CSRC, issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and related supporting guidelines, which became effective on March 31, 2023 (the “Overseas Listing Regulations”). The Overseas Listing Regulations impose filing requirements on certain direct and indirect overseas securities offerings and listings by PRC domestic enterprises. We do not believe that we are subject to the CSRC filing requirements because, as of the date of this prospectus, (i) we conduct substantially all of our businesses in Hong Kong; (ii) we are headquartered in Hong Kong and all of our officers are employed by our operating subsidiaries in Hong Kong; and (iii) our operating revenue, total profit, total assets, and net assets, as documented in our audited consolidated financial statements for the most recent accounting year prior to this offering, accounted for by our mainland China subsidiary are all under 50%.
However, if our understanding to the Overseas Listing Regulations is wrong or incorrect and we fail to comply with the Overseas Listing Regulations, we will be required to correct our behaviors, face warnings and fines which amount will range from RMB1,000,000 to RMB10,000,000, and directly responsible personnel will also be warned and fined an amount ranging from RMB500,000 to RMB5,000,000. Any failure to obtain the required approvals or complete the filings and other regulatory procedures in a timely manner could prevent us from offering or continuing to offer our Class A Ordinary Shares, cause significant disruption to our business operations, and damage our reputation, which would materially and adversely affect our financial condition and results of operations and cause our Class A Ordinary Shares to significantly decline in value or become worthless.
We are subject to potential trading prohibitions, restrictions and delisting risks under the Holding Foreign Companies Accountable Act, or the HFCA Act. The HFCA Act, was signed into law on December 18, 2020. The HFCA Act states if the SEC determines that we have filed audit reports issued by a registered public accounting firm that has not been subject to inspection for the Public Company Accounting Oversight Board, or the PCAOB, for three consecutive years beginning in 2021, the SEC shall prohibit our shares from being traded on a national securities exchange or in the over-the-counter trading market in the United States. On December 23, 2022, the Accelerating Holding Foreign Companies Accountable Act, or the AHFCA Act was enacted, which amended the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three. On December 16, 2021, the PCAOB issued its determination that the PCAOB is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong. On August 26, 2022, the CSRC, the Ministry of Finance of the PRC, and the PCAOB signed a Statement of Protocol, or the Protocol, governing inspections and investigations of audit firms based in China and Hong Kong. The Protocol remains unpublished and is subject to further explanation and implementation. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC. On December 15, 2022, the PCAOB Board determined that the PCAOB was able to secure complete access to inspect and investigate registered public accounting firms headquartered in mainland China and Hong Kong and voted to vacate its previous determinations to the contrary. However, should PRC authorities fail to agree the PCAOB’s intervention in the future, the PCAOB Board will consider the need to issue a new determination. Notwithstanding the foregoing, in the event it is later determined that the PCAOB is unable to inspect or investigate completely our auditor, then such lack of inspection could cause our securities to be delisted from the stock exchange. On December 29, 2022, the President signed the Consolidated Appropriations Act, 2023, which, among other things, amended the HFCA Act by requiring the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, and thus, reduced the time before our Class A Ordinary Shares may be prohibited from trading or delisted. The delisting of our Class A Ordinary Shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.
Our current auditor, Enrome LLP, as an auditor of companies that are traded publicly in the United States and a firm registered with the PCAOB, is subject to laws in the United States pursuant to which the PCAOB conducts regular inspections to assess its compliance with the applicable professional standards. Enrome is headquartered in Singapore, and, as of the date of this prospectus, was not included in the list of PCAOB Identified Firms in the PCAOB Determination Report issued in December 2021. Uncertainties of the ability of auditors to comply with the requirements of the HFCA Act, as well as further rulemakings by U.S. regulators with respect to their work in China, could cause the market price of our Shares to fall. If the PCAOB determines that it cannot inspect the audits of our operating subsidiaries, the trading of our securities may be prohibited under the HFCA Act and, as a result, Nasdaq may delist our securities. The delisting of our Class A Ordinary Shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.
We are a holding company incorporated under the laws of the Cayman Islands. We operate substantially all of our business through our subsidiaries in Hong Kong, Quantum and Stellar, and our subsidiary in mainland China, and may rely on dividends and other distributions paid by our subsidiaries for our cash and financing requirements. If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict its ability to pay dividends or make other distributions to us.
Currently, there are no restrictions under Hong Kong law on foreign exchange, the conversion of Hong Kong dollars into foreign currencies or the transfer of currencies out of Hong Kong. There are also currently no restrictions under Hong Kong law on transfers of cash among DarkIris, Quantum and Stellar, across borders or to U.S. investors, or on distributions of earnings by our Hong Kong subsidiaries to DarkIris, or by DarkIris to U.S. investors. However, our PRC subsidiary is subject to PRC laws and regulations on foreign exchange and currency conversion, which may restrict transfers of cash between our PRC subsidiary and the rest of our corporate group. In addition, if existing or future PRC laws and regulations become applicable to our Hong Kong subsidiaries, to the extent that our cash or assets are in Hong Kong or mainland China or held by a Hong Kong or PRC entity, such funds or assets may not be available to fund operations or for other uses outside Hong Kong or mainland China due to intervention by, or the imposition of restrictions and limitations by, the PRC government. We cannot assure you that the PRC government will not intervene in or impose restrictions on our subsidiaries’ ability to transfer or distribute cash within our organization or to U.S. investors. Any limitation on the ability of our subsidiaries to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions, pay dividends or otherwise fund and conduct our business.
As of the date of this prospectus, DarkIris has not declared or paid any dividends or other distributions to its shareholders. During the periods presented in this prospectus, there were no material transfers of cash or other assets among DarkIris, Quantum and Stellar. In the future, cash proceeds raised from overseas financing activities, including this offering, may be transferred by DarkIris to Quantum or Stellar through capital contributions, shareholder loans, dividends or other permitted means. See “Prospectus Summary” and “Dividend Policy.”
Per Share and Accompanying Warrant |
Total (Assuming maximum offering) |
|||||||
| Public offering price(1) | $ | 1.20 | $ | 4,999,999.20 | ||||
|
Placement agent commissions (2) |
$ | 0.06 | $ | 249,999.96 | ||||
| Proceeds, before expenses, to us(3) | $ | 1.14 | $ | 4,749,999.24 | ||||
| (1) | The offering price is $1.20 per Unit. |
| (2) | We have agreed to pay the placement agent a cash placement fee equal to 5% of the gross proceeds raised in this offering. We have also agreed to reimburse the placement agent for certain of its offering-related expenses, including reimbursement for legal fees and other out-of-pocket fees, costs and expenses in an amount up to $80,000. For more information about the compensation to be received by the placement agent, see “Plan of Distribution.” |
| (3) | We estimate the total expenses of this offering payable by us will be approximately $4,594,999. Since this is a best-efforts offering, we may not sell all or any of the Units offered pursuant to this prospectus. |
Neither the U.S. Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.
Sole Placement Agent
The date of this prospectus is , 2026
TABLE OF CONTENTS
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About this Prospectus
We have not authorized anyone to provide any information or to make any representations other than those contained in this prospectus or in any free writing prospectuses prepared by us or on our behalf or to which we have referred you. We take no responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you. This prospectus is an offer to sell only the Units, Pre-Funded Units, Class A Ordinary Shares, Pre-Funded Warrants, Warrants, and the Class A Ordinary Shares underlying the Pre-Funded Warrants and Warrants offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. We are not making an offer to sell 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. For the avoidance of doubt, no offer or invitation to subscribe for Ordinary Shares is made to the public in the Cayman Islands. The information contained in this prospectus is current only as of the date on the front cover of the prospectus. Our business, financial condition, results of operations, and prospects may have changed since that date.
Conventions that Apply to this Prospectus
Unless otherwise indicated or the context requires otherwise, the terms “we,” “us,” “our Company,” “our,” the “Company” and “DarkIris” refer to DarkIris Inc., a holding company incorporated under the laws of the Cayman Islands on May 31, 2024. In addition, in this prospectus:
“AIGC” refers to our Artificial Intelligence-Generated Content business launched in 2026, which focuses on AI-driven content creation and production services;
“AETHER INTELLIGENCE” refers to Aether Intelligence Pte. Ltd., our newly established subsidiary in Singapore, which serves as DarkIris’ global R&D headquarter and central hub for AIGC innovation and operations;
“Class A Ordinary Shares” refers to the Company’s Class A ordinary shares, par value US$0.0016 per share, with 281,250,000,000 Class A Ordinary Shares authorized and 1,667,701 Class A Ordinary Shares outstanding as of the date of this prospectus;
“Class B Ordinary Shares” refers to the Company’s Class B ordinary shares, par value US$0.0016 per share, with 31,250,000,000 Class B Ordinary Shares authorized and 429,886 Class B Ordinary Shares outstanding as of the date of this prospectus;
“China” or the “PRC” refers to the People’s Republic of China, including the special administrative regions of Hong Kong and Macau. For reference to specific laws and regulations adopted by the PRC, the definition of “China” or the “PRC” refers to the People’s Republic of China, including the special administrative regions of Hong Kong and Macau unless explicitly stated otherwise;
Depending on the context, “we,” “us,” “our company,” “our,” “the Company” and “DarkIris” refer to DarkIris Inc.. 黑瞳科技, a Cayman Islands company that will issue the Units and Pre-Funded Units offered in this prospectus, consisting of Class A Ordinary Shares, Pre-Funded Warrants and Warrants;
“Hong Kong” refers to Hong Kong Special Administrative Region in the PRC;
“mainland China” refers to the People’s Republic of China (excluding Hong Kong, Macau and Taiwan);
“Our games” refers to both self-developed games owned by the Group and licensed games from third parties published and operated by the Group;
“PRC government” or “PRC authorities”, or variations of such words or similar expressions, refer to the central, provincial, and local governments of all levels in the PRC, including regulatory and administrative authorities, agencies and commissions, or any court, tribunal or any other judicial or arbitral body in the PRC;
“Quantum” refers to Quantum Arts Co., Limited, incorporated as a limited company in Hong Kong;
“RMB” or “Chinese Yuan” refers to the legal currency of China;
“SEC” refers to the Securities and Exchange Commission;
“shares”, “Shares” or “Ordinary Shares” refer to the Ordinary Shares of DarkIris, consisting of Class A Ordinary Shares and Class B Ordinary Shares;
“Stellar” refers to Hongkong Stellar Wisdom Co., Limited, incorporated as a limited company in Hong Kong;
“Turing” refers to Guangzhou Turing Interactive Entertainment Technology Co., Ltd, incorporated as a limited liability company in the PRC, a wholly-owned subsidiary of Quantum and disposed of by Quantum on May 14, 2025;
“Three Kingdoms” refers to the Taoyuan Three Kingdoms (桃園三國);
“U.S. dollars,” “dollars,” “USD” or “$” refers to the legal currency of the United States;
“Wei, Shu & Wu” refers to The Great Story of Wei, Shu and Wu (大話魏蜀吳);
“Xiqi” refers to Xiamen Xiqi Network Technology Co., Ltd, incorporated as a limited liability company in the PRC.
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EXCHANGE RATE INFORMATION
The functional and reporting currency of the Company is the United States Dollar (“US$”). The Company’s subsidiary operating in China uses Renminbi (“RMB”) as the functional currency.
The financial statements of the Company and its subsidiaries, other than subsidiaries with functional currency of US$, are translated into US$ using the exchange rate as of the balance sheet date for assets and liabilities and average exchange rate for the year for income and expense items. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. The equity denominated in the functional currency is translated at the historical rate of exchange at the time of capital contribution. Because cash flows are translated based on the average translation rate, amounts related to assets and liabilities reported on the consolidated statements of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets. Translation adjustments arising from the use of different exchange rates from period to period are included as a separate component of accumulated other comprehensive income (loss) included in consolidated statements of changes in shareholders’ equity (deficit). Translation gains and losses are recognized in the consolidated statements of operations and comprehensive income (loss) as other comprehensive income or loss.
For the Company, except for the shareholders’ equity, the balance sheet accounts as of March 31, 2026, September 30, 2025 and September 30, 2024 were translated at RMB6.898, RMB7.1190 and RMB7.0176 to $1.00, respectively. The shareholders’ equity accounts were translated at their historical rate. The average translation rates applied to statements of operations for the years ended September 30, 2025, and 2024 were RMB7.2125, and RMB7.2043 to $1.00, respectively. The average translation rates applied to statements of operations for the six months ended March 31, 2026, and 2025 were RMB7.0061, and RMB7.2306 to $1.00, respectively. Cash flows were also translated at average translation rates for the periods. Therefore, amounts reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheets.
TRADEMARKS
Our logo and some of our trademarks and tradenames are used or incorporated by reference in this prospectus. This prospectus also includes trademarks, tradenames and service marks that are the property of other organizations. Solely for convenience, trademarks, tradenames and service marks referred to in this prospectus may appear without the ®, TM and SM symbols, but those references are not intended to indicate in any way that we will not assert to the fullest extent under applicable law our rights or the rights of the applicable licensor to these trademarks, tradenames and service marks.
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The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and financial statements included elsewhere in this prospectus. In addition to this summary, we urge you to read the entire prospectus carefully, especially the risks of investing in our securities, discussed under “Risk Factors,” before deciding whether to buy our securities.
Business Summary
Overview
DarkIris Inc. is a holding company incorporated as an exempted company under the laws of the Cayman Islands. We operate substantially all of our business through our subsidiaries in Hong Kong, namely Quantum and Stellar, our subsidiary in mainland China, and our subsidiary in Singapore.
We are a comprehensive technology enterprise engaged in the development, publishing and operating of mobile digital games via various third-party digital storefronts. Our activities encompass including game design, programming and graphics, as well as distribution and operation of mobile games on various platforms. We leverage on (i) the innovative, creative and technical expertise of the gaming industry communities in Hong Kong and (ii) the multicultural environment and diversified interests of mobile game players in these regions. Our goal is to create and promote a broader array of engaging, immersive, and captivating mobile game genres to cater to a global audience of gamers. Over the past seven years, we have successfully released numerous popular games. We are committed to consistently demonstrating exceptional strength and unique allure across diverse sectors of games, leading the way in pioneering advancements within the gaming industry.
Quantum is our operating subsidiary in Hong Kong dedicated to games development and publishing, which is committed to bringing unique gaming experiences to game players around the world. It has a team of game developers who are not only technically proficient, but also have keen market insights to quickly capture and respond to the diverse needs of the global game market.
Stellar is our subsidiary in Hong Kong which commenced operations in April 2025. As of the date of this prospectus, it is dedicated to video marketing on social media and video content platforms such as YouTube.
We also incorporated a subsidiary DarkIris Digital Technology (Xiamen) Co., Ltd. in October 2025, which focuses on new games development and has obtained business registration certificates to conduct its business operations in mainland China.
In April 2026, we established a new subsidiary, AETHER INTELLIGENCE PTE. LTD. (“AETHER INTELLIGENCE”), in Singapore. AETHER INTELLIGENCE will serve as DarkIris’ global research and development (R&D) headquarter and central hub for Artificial Intelligence Generated Content (“AICG”) innovation and operations.
Our core product offerings are:
| ● | Games Development. We develop, market and distribute our self-developed mobile games; and |
| ● | Games Publishing and Operation. We publish and operate our self-developed mobile games and mobile games we license from other game developers. |
As a recent development, we officially launched our AIGC platform to drive a dual-engine growth strategy of “core gaming business + artificial intelligence (AI) digital content”. This business line will focus on AI-driven content creation and production services, covering script and storyboard generation, virtual character and scene production, short-form videos creation and digital content production. It aims to provide efficient, low-marginal-cost solutions for film producers, content platforms, and brand clients.
For the six months ended March 31, 2026, our revenue increased by 13.9% to approximately $5.93 million from approximately $5.20 million for the six months ended March 31, 2025, and our gross profit increased by 20.9% to approximately $1.76 million from approximately $1.45 for the same period in 2025.
Corporate Information
Our principal office is 6/F Cheong Sun Tower, No.118 Wing Lok Street, Sheung Wan. Hong Kong. The telephone number of our principal office is +852 6670 1632. Our agent for service of process in the United States is Cogency Global Inc., located at 122 East 42nd Street, 18th Floor New York, NY 10168. Our corporate website is www.darkiris.com. Information contained on our website does not constitute part of this prospectus.
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Corporate Structure
The following diagram illustrates our corporate structure as of the date of this prospectus.
Our Mission
Our mission is to create and promote a broader array of engaging, immersive, and captivating mobile game genres to cater to a global audience of gamers.
Our Business Strategies
We have developed a comprehensive strategy to drive innovation, expand market presence, and achieve sustainable growth. By focusing on game development, IP integration, technological advancement, and global collaboration, we aim to solidify our position in gaming and interactive entertainment through the following strategies:
| ● | Expansion of game portfolio |
| ● | Development and expansion of intellectual property rights |
| ● | Strategic investments and partnerships |
| ● | Product line diversification. |
Our Competitive Strengths
We believe that the following strengths contribute to our success and differentiate us from our competitors:
| ● | Strong production and content creative capabilities with an international perspective |
| ● | Experienced management team in game production and publishing |
| ● | Global reach and market expertise |
| ● | Global infrastructure and player support |
| ● | Key platform and payment partnerships. |
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Our Challenges
Currently, we are facing the following major challenges:
| ● | We may not be able to consistently develop, license and launch commercially successful games, retain and grow our gameplayer base or effectively convert active gameplayers into paying gameplayers. |
| ● | We derive a substantial portion of our revenue from a limited number of popular games and rely heavily on third-party game licensors, publishing platforms and payment processing channels. Any deterioration in these relationships could reduce our gameplayer base and revenue. |
| ● | The mobile gaming industry is highly competitive and subject to rapidly changing player preferences, technologies and regulations in Hong Kong, mainland China and overseas markets. We may be unable to compete effectively, obtain required approvals or successfully expand internationally. |
| ● | Our growth depends on our ability to protect intellectual property and gameplayer data, maintain reliable technology infrastructure, address cybersecurity threats and attract and retain qualified management, development and technical personnel. |
| ● | We have incurred net losses and may require additional capital to fund our operations and growth. We may not achieve or maintain profitability or obtain additional financing on acceptable terms. |
To overcome these challenges, we need adequate capital to continue investing in game development and licensing, technology and research and development, marketing and player acquisition, regulatory compliance, data security, international expansion and recruitment.
In general, the successful execution of our business strategies depends on our ability to launch and monetize popular games, retain and engage gameplayers, diversify our game portfolio and revenue sources, maintain relationships with licensors and third-party platforms, comply with applicable laws and regulations, protect our intellectual property and data, maintain reliable technology infrastructure, control costs and recruit and retain qualified personnel. See “Risk Factors” and the other information included in this prospectus for a discussion of these and other risks and uncertainties we face.
Brief Introduction to Our Products
Games publishing and operation
We engage in the publication and operation of self-developed mobile games and mobile games developed by third-parties with exclusive or non-exclusive licensing rights granted to us in specific geographic regions across diverse platforms, enabling gamers to download and immerse themselves in these captivating games. Substantially majority of our revenues are from mobile games developed by third-parties.
Before launching games in different regions, we localize them through language options, region-specific character costumes and other culturally relevant features. We tailor our marketing strategies based on game type, player preferences and data obtained from third-party analytics platforms, and promote our games through social media, celebrity and influencer endorsements, live-streaming platforms, search engine optimization and outdoor advertising. We also work with major mobile application platforms, including the Apple App Store and Google Play Store, and payment providers, including Mycard, PayPal, WeChat and Alipay, to facilitate game distribution and in-game transactions. To enhance player engagement and loyalty, we organize offline events, offer benefits to long-standing players and conduct in-game promotions, including holiday-limited virtual items.
Self-developed games
The Company distributes mobile games developed by the Company to Hong Kong, Macau and Taiwan via third-party gaming platforms. We have distributed our mobile games “The Great Story of Wei, Shu, and Wu (大話魏蜀吳)” and “Three Kingdoms (桃園三國)” to two gaming platforms, namely, My1737 in Taiwan and Let’s Play Art Planet in Hong Kong on a non-exclusive basis.
For the fiscal years ended September 30, 2025 and 2024, we generated approximately 45% and 27% of our total revenue from our self-developed mobile games. For the six months ended March 31, 2026, we generated approximately 55% of our total revenue from our self-developed mobile games.
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Licensed mobile games
We also publish and operate mobile games licensed from third-party developers on an exclusive or non-exclusive basis in specified geographic markets. Under our licensing arrangements, we are generally responsible for game localization, server setup, marketing, in-game purchases and payment channels. We pay licensing and copyright fees and share in-game purchase proceeds with the relevant developers based on agreed ratios. Our licensing agreements generally have terms of two to three years. Over the years, we have been licensed to launch and operate 12 mobile games.
For the fiscal years ended September 30, 2025 and 2024, we generated approximately 55% and 73% of our total revenue from mobile games developed by third-parties. For the six months ended March 31, 2026, we generated approximately 45% of our total revenue from mobile games developed by third-parties.
In-game purchases
All of our self-developed or licensed games adopt the free-to-play model. Players looking to enrich their gaming experience have the option to acquire credits through a variety of payment gateways, exchanging them for our in-game virtual items upon purchase. These virtual items are non-physical items serve to elevate gaming experiences by empowering players to fortify their teams, accelerate progress, and personalize their in-game personas. Such in-game purchase cannot be exchanged for real currency and have no monetary value outside our respective games.
Virtual items available for purchase are classified as either Consumable Virtual Items - items that provide immediate benefits or perform in-game actions upon use (e.g., temporary power-ups or weapons); or Durable Virtual Items - items that offer long-term enhancements to a player’s character or inventory (e.g., premium outfits or permanent upgrades). The monetary value of the virtual currencies sold and converted to the in-game tokens is shared between the Company and the game developer, if the game is licensed, which is pre-determined in the individual revenue sharing arrangements. The Company’s pre-determined percentage share of such sales varies by contracts and is generally between 40% and 85% of the total collected by us. The Company collects the payments made by the game players via the third-party distribution platforms, such as Apple App Store and Google Play Store, and remits the agreed sharing (net of tax and surcharges) by the Company to the game developer according to the applicable revenue sharing arrangement.
For the years ended September 30, 2025 and 2024, we recorded revenue of approximately $10.0 million and $7.9 million, respectively, representing 100% of our total revenue from in-game purchase. For the six month ended March 31, 2026, we recorded revenue of approximately $5.9 million, representing 100% of our total revenue from in-game purchase.
Recent Development of Our AIGC Business
In 2026, we launched a full-scale AIGC “gaming + film and television” ecosystem as an additional strategic growth engine complementing our core gaming business. Our AIGC business focuses on AI-assisted content creation and production, including script and storyboard generation, virtual character and scene production, short-form video creation and other digital content production. On April 24, 2026, we acquired a portfolio of 10 completed film and television intellectual property titles and completed a private placement from which we received net proceeds of approximately $3.8 million, which we intend to use to fund the development of our AIGC platform and for other general corporate purposes.
On May 29, 2026, we commercially launched our AIGC video platform, available globally at video.aideptus.com. The platform integrates ByteDance’s Seedance 2.0 model and supports text-to-video and image-to-video generation for applications such as short-form content, storyboarding and commercial advertising. Through our AIGC business, we intend to enhance content-production efficiency and flexibility across our gaming and film and video operations and develop reusable and scalable content-production capabilities while continuing to invest in our core gaming business.
More recently, we have been preparing for the planned launch of our Cine3.AI platform, which is intended to provide professional and enterprise users with AI-enabled film and video production tools across multiple stages of the production workflow, including pre-visualization, scene and character generation and related post-production support. To support the anticipated commercialization of Cine3.AI and related services, we have implemented additional operational initiatives, including establishing a wholly owned U.S. subsidiary intended to serve as a North America-focused operating hub to support business development, customer and partner engagement and certain operational functions, and initiating a recruitment plan in Singapore and the United States focused on building capabilities in areas such as business development, administration, IP licensing/rights operations and cross-border compliance.
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Property, Plants and Equipment
Our headquarter is located at 6/F Cheong Sun Tower, No.118 Wing Lok Street, Sheung Wan, Hong Kong and we maintain an office in Xiamen, China at Room 310, No. 10-1, Wanghai Road, Phase II, Software Park, Siming District, Xiamen City, Fujian Province, China. As of the date of this prospectus, we do not own any real estate, and we leased an aggregate of 500 square meters of real property. We do not expect to experience difficulties in renewing any of the leases when they expire. If we require additional space, we expect to be able to obtain additional facilities on commercially reasonable terms. For the sake of cost control, on the premise of reasonable layout of production capacity, we may terminate the lease contract in advance or not renew the contract when it expires.
As of the date of this prospectus, we own 5 software copyrights and 18 trademarks registered in China, including 12 stylized or graphic trademarks for our games.
Summary of Risk Factors
An investment in our securities involves a high degree of risk. Before deciding whether to invest in our securities, you should carefully consider the risk described under “Risk Factors” under the heading “Item 3. Key Information — D. Risk Factors” in our Annual Report on Form 20-F for the fiscal year ended September 30, 2025 (the “2025 Annual Report”) on file with the SEC, which is incorporated by reference into this prospectus, as well as the risk factors below, which augment the risk factors set forth in our 2025 Annual Report, together with any other information appearing or incorporated by reference in this prospectus and in any accompanying prospectus supplement, in light of your particular investment objectives and financial circumstances. In addition to those risk factors, there may be additional risks and uncertainties of which our management is unaware or deems immaterial. Our business, financial condition, or results of operations could be materially and adversely affected by any of these risks. The trading price of our Class A Ordinary Shares could decline due to any of these risks, and you may lose all or part of your investment.
Risks Relating to Our Dual-Class Share Structure
| ● | The dual class structure of our Ordinary Shares has the effect of concentrating voting control with Mr. Hong Zhifang, our Chief Executive Officer, director and controlling shareholder, whose interests may not be aligned with those of our other shareholders. | |
| ● | We are a “controlled company” within the meaning of the Nasdaq listing rules and may rely on exemptions from certain corporate governance requirements, which could reduce the protections available to our public shareholders. |
Risks Relating to Our Securities and This Offering
| ● | If holders of the Warrants elect to exercise the Warrants using the zero exercise price option, our shareholders will suffer substantial additional dilution, and we may not receive any proceeds from the exercise of the Warrants. | |
| ● | We are selling a substantial number of Class A Ordinary Shares in this offering, which could cause the price of our Class A Ordinary Shares to decline. | |
| ● | This is a best-efforts offering with no minimum offering amount, and we may not raise sufficient capital to fund our business plans. | |
| ● | The sale or availability for sale of substantial amounts of our Class A Ordinary Shares could adversely affect their market price. | |
| ● | This offering may cause the price of our Class A Ordinary Shares to decline and fall below the minimum bid price requirement under the Nasdaq Listing Rules, which could result in the delisting of our Class A Ordinary Shares. | |
| ● | There is no public market for the Pre-Funded Warrants or Warrants, and an active trading market for the Pre-Funded Warrants or Warrants is not expected to develop. | |
| ● | We have broad discretion in the use of the net proceeds from this offering and may not use them effectively. | |
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Implications of Being an Emerging Growth Company
We qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). An emerging growth company may take advantage of reduced reporting requirements that are otherwise applicable to larger public companies. In particular, as an emerging growth company, we:
| ● | may present only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations; | |
| ● | are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements and analyzing how those elements fit with our principles and objectives, which is commonly referred to as “compensation discussion and analysis”; | |
| ● | are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”); | |
| ● | are not required to obtain a non-binding advisory vote from our shareholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on frequency,” and “say-on-golden-parachute” votes); | |
| ● | are exempt from certain executive compensation disclosure provisions requiring a pay-versus-performance graph and chief executive officer pay ratio disclosure; | |
| ● | are eligible to take advantage of the extended transition periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act; and | |
| ● | are not required to conduct an evaluation of our internal control over financial reporting until our second annual report on Form 20-F following the effectiveness of the IPO. |
We have elected to take advantage of certain reduced reporting requirements and exemptions, including the extended transition period for the adoption of new or revised financial accounting, so long as we remain an emerging growth company. As a result, you may not have access to certain information that would otherwise be available with respect to another public company that is not an emerging growth company.
We will cease to be an emerging growth company upon the earliest of: (i) the last day of the fiscal year in which the fifth anniversary of the first sale of our common equity securities pursuant to an effective registration statement under the Securities Act of 1933, as amended (the “Securities Act”), occurs; (ii) the last day of the fiscal year in which our total annual gross revenues equal or exceed $1.235 billion; (iii) the date on which we are deemed to be a “large accelerated filer,” which generally requires, among other things, that the market value of our Ordinary Shares held by non-affiliates equal or exceed $700 million as of the last business day of our most recently completed second fiscal quarter; or (iv) the date on which we have issued more than $1 billion in principal amount of non-convertible debt during the preceding three-year period. See “Risk Factors—Risks Relating to Our Securities and This Offering.”
Implications of Being a Foreign Private Issuer
We are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As such, we are exempt from certain provisions applicable to United States domestic public companies. For example:
| ● | we are not required to provide as many Exchange Act reports, or as frequently, as a domestic public Company; | |
| ● | for interim reporting, we are permitted to comply solely with our home country requirements, which are less rigorous than the rules that apply to domestic public companies; |
| ● | we are not required to provide the same level of disclosure on certain issues, such as executive compensation; | |
| ● | we are exempt from provisions of Regulation Fair Disclosure aimed at preventing issuers from making selective disclosures of material information; | |
| ● | we are not required to comply with the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; and | |
| ● | our principal shareholders are exempt from the reporting provisions and our executive officers, directors and principal shareholders are exempt from the short-swing profit recovery provisions contained in Section 16 of the Exchange Act. |
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We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC is less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.
The Nasdaq listing rules provide that a foreign private issuer may follow the practices of its home country, which for us is the Cayman Islands, rather than the Nasdaq rules as to certain corporate governance requirements, including the requirement that the issuer have a majority of independent directors, the audit committee, compensation committee, and nominating and corporate governance committee requirements, the requirement to disclose third-party director and nominee compensation, and the requirement to distribute annual and interim reports. A foreign private issuer that follows a home country practice in lieu of one or more of the listing rules is required to disclose in its annual reports filed with the SEC each requirement that it does not follow and describe the home country practice followed by the issuer in lieu of such requirements. Although we do not currently intend to take advantage of these exceptions to the Nasdaq corporate governance rules, we may in the future take advantage of one or more of these exemptions. See “Risk Factors — Risks Relating to Our Securities and This Offering.”
Implications of Potential CSRC Approval Required for This Offering
On February 17, 2023, the CSRC issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Enterprises, or the Trial Measures, which have become effective on March 31, 2023. We believe that we are not subject to the CSRC filing requirements under the Trial Measures for this offering because, as of the date of this prospectus, (i) we conduct substantially all of our businesses in Hong Kong; (ii) we are headquartered in Hong Kong and all of our officers are employed by our operating subsidiaries in Hong Kong; (iii) most of our revenues and profits are generated by our subsidiaries in Hong Kong; and (iv) our operating revenue, total profit, total assets, and net assets, as documented in our audited consolidated financial statements for the most recent accounting year prior to this offering, accounted for by our mainland China subsidiary are all under 50%.
If our understanding of the Trial Measures is wrong or incorrect and we fail to comply with the Trial Measures, we will be required to correct our behaviors, face warnings and fines which amount will range from RMB1,000,000 to RMB10,000,000, and directly responsible personnel will also be warned and fined an amount ranging from RMB500,000 to RMB5,000,000. Any failure by us to obtain the relevant approval or complete the filings and other relevant regulatory procedures in a timely manner will completely hinder our ability to offer or continue to offer our Class A Ordinary Shares, cause significant disruption to our business operations, and severely damage our reputation, which would materially and adversely affect our financial condition and results of operations and cause our Class A Ordinary Shares to significantly decline in value or become worthless. See “Risk Factors—Risks Relating to Conducting Business in Hong Kong and Mainland China.”
Implications of HFCA Act
Our Class A Ordinary Shares could be prohibited from trading on a national securities exchange or in the over-the-counter market in the United States if the SEC determines that we are a Commission-Identified Issuer under the Holding Foreign Companies Accountable Act, as amended (the “HFCA Act”), for two consecutive years.
Our independent registered public accounting firm, Enrome LLP, issued the audit report incorporated by reference into this prospectus. Enrome LLP is registered with the Public Company Accounting Oversight Board (the “PCAOB”) and, as such, is subject to the laws and regulations of the United States pursuant to which the PCAOB conducts regular inspections to assess registered accounting firms’ compliance with applicable professional standards. As of the date of this prospectus, the PCAOB is able to inspect Enrome LLP, and Enrome LLP is not subject to a determination issued by the PCAOB under PCAOB Rule 6100 that the PCAOB is unable to inspect or investigate the firm completely.
On December 16, 2021, the PCAOB determined that it was unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China or Hong Kong because of positions taken by authorities in those jurisdictions. On August 26, 2022, the PCAOB entered into a Statement of Protocol with the China Securities Regulatory Commission and the Ministry of Finance of the People’s Republic of China, establishing a framework for the PCAOB to conduct inspections and investigations of registered public accounting firms headquartered in mainland China and Hong Kong. On December 15, 2022, the PCAOB determined that it had secured complete access to inspect and investigate such firms and vacated its December 16, 2021 determinations.
The PCAOB may issue a new determination in the future if authorities in the PRC obstruct or otherwise fail to facilitate the PCAOB’s access. If the PCAOB were to determine that it could not inspect or investigate our auditor completely, and the SEC were to identify us as a Commission-Identified Issuer for two consecutive years, the SEC would prohibit our securities from trading on a national securities exchange or in the over-the-counter market in the United States. Any such trading prohibition, or the threat of such a prohibition, could materially and adversely affect the value of our Class A Ordinary Shares. See “Risk Factors—Risks Relating to Conducting Business in Hong Kong and Mainland China.”
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| Issuer | DarkIris Inc. | |
| Securities offered by us | Up to 4,166,666 Units, based on the assumed public offering price of $1.20 per Unit, with each unit consisting of one Class A Ordinary Share and one Warrant; and up to 4,166,666 Pre-Funded Units, based on the assumed public offering price of $1.1999 per Pre-Funded Unit, with each Pre-Funded Unit consisting of one Pre-Funded Warrant to purchase one Class A Ordinary Share and one Warrant. | |
| Public Offering Pirce Per Unit | Assumed price at $1.20 per Unit (consisting of one Class A Ordinary Share and one Warrant).
The offering price per Unit in the Offering will be determined by us based on negotiations with the Placement Agent on behalf of the prospective investors in the Offering. |
| Warrants offered by us | Up to 4,166,666 Warrants included in the Units and up to 4,166,666 Warrants included in the Pre-Funded Units.
The Warrants will become exercisable beginning on the Initial Exercise Date at an assumed initial exercise price of $2.04. A holder of the Warrants may also effect the zero exercise price option at any time while the Warrants are outstanding. Under the zero exercise price option, the holder of the Warrants, has the right to receive the number of Class A Ordinary Shares as set forth in the applicable Warrant, which will be more than such number of Class A Ordinary Shares that is issuable upon cash exercise or cashless exercise. The Warrants will expire on the six (6) months period of the Initial Exercise Date. See “Description of Securities We Are Offering — Warrants”. | |
| Pre-Funded Warrants offered by us | Up to 4,166,666 Pre-Funded Warrants included in the Pre-Funded Units. Each Pre-Funded Warrant is exercisable for one Class A Ordinary Share at an exercise price of $0.0001 per share. The Pre-Funded Warrants will be immediately exercisable and will not expire. See “Description of Securities We Are Offering — Pre-Funded Warrants”. | |
| Total Class A Ordinary Shares outstanding immediately prior to this offering | 1,667,701 Class A Ordinary Shares | |
Total Class A Ordinary Shares to be outstanding immediately after this offering |
4,166,666 Class A Ordinary Shares (assuming none of the Warrants issued in this offering are exercised); or 56,547,610 Class A Ordinary Shares (assuming all Warrants issued in this offering are exercised using zero exercise price) | |
| Listing | Our Class A Ordinary Shares are listed on Nasdaq under the symbol “DKI”. | |
| Use of proceeds | We intend to use the proceeds from this offering for expansion of the operations team and rewards to existing team members, product development and for working capital and other general corporate purposes. See “Use of Proceeds” for more information. | |
| Risk factors | The Class A Ordinary Share offered hereby involve a high degree of risk. You should read “Risk Factors” beginning on page 9 for a discussion of factors to consider before deciding to invest in our securities. |
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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 2025 Annual Report, and all of the information included or incorporated by reference in this prospectus before deciding whether to purchase our securities. 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 Class A 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 “Cautionary Statement Regarding Forward-Looking Statements.”
We may not be successful in preventing the material adverse effects that any of the following risks and uncertainties may cause. These potential risks and uncertainties may not be a complete list of the risks and uncertainties facing us. There may be additional risks and uncertainties that we are presently unaware of, or presently consider immaterial, that may become material in the future and have a material adverse effect on us. You could lose all or a significant portion of your investment due to any of these risks and uncertainties.
Risks Relating to Doing Business in Hong Kong and Mainland China
The PRC government may exercise significant oversight and control over the conduct of our business and may intervene in or influence our operations at any time, which could result in a material change in our operations and the value of our Class A Ordinary Shares.
Substantially all our operations are in Hong Kong. However, due to the long-arm provisions under current PRC laws and regulations, there remains regulatory uncertainty concerning the implementation, interpretation and enforcement of PRC laws. The PRC government may exercise significant oversight and discretion, and its policies, regulations, rules and enforcement practices may change rapidly and with little advance notice to us or our shareholders. In addition, PRC laws and regulations may be interpreted and applied inconsistently by different agencies or authorities and inconsistently with our current policies and practices.
Because we now have a subsidiary in mainland China, we are subject to PRC laws and regulations governing our PRC operations. Compliance with such laws and regulations may be costly and could delay or impede the development of our business, result in negative publicity, increase our operating costs, require significant management time and attention, require us to obtain additional licenses, permits, approvals or certificates, or subject us to inquiries, investigations, remedies, administrative penalties, fines, criminal liabilities or orders requiring us to modify or cease certain business practices.
Failure to obtain the required approvals or complete the filings and other regulatory procedures in a timely manner could prevent us from offering or continuing to offer our Class A Ordinary Shares, materially disrupt our business operations and cause our Class A Ordinary Shares to significantly decline in value or become worthless.
On December 28, 2021, the Cyberspace Administration of China, or the CAC, and certain other PRC governmental authorities promulgated the Cybersecurity Review Measures, which became effective on February 15, 2022. On September 24, 2024, the State Council of the PRC promulgated the Regulations on Network Data Security Management, which became effective on January 1, 2025. These regulations impose cybersecurity review and other requirements on certain critical information infrastructure operators and data processors conducting activities that affect or may affect national security. Our operating subsidiaries publish their games through third-party platforms that do not disclose the personal information of game players to us, and we do not collect or hold the personal information of game players. Neither DarkIris nor any of our Hong Kong subsidiaries has been notified by any PRC governmental authority that we are classified as a critical information infrastructure operator or data processor subject to cybersecurity review, and neither DarkIris nor any of our Hong Kong subsidiaries has been involved in any investigation initiated by the CAC or any other competent PRC governmental authority or received any inquiry, notice, warning or sanction in this respect. We believe that we are not currently required to undergo a cybersecurity review in connection with this offering.
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However, we cannot rule out the possibility that the PRC government will impose licensing or pre-approval requirements on our overseas securities offerings or on our gaming industry operations in the future. In that case, we may be unable to comply with such requirements in a timely manner or at all, which could materially and adversely affect our business and impede our ability to continue operations.
On February 17, 2023, the China Securities Regulatory Commission, or the CSRC, issued the Trial Administrative Measures of Overseas Securities Offering and Listing by Domestic Companies and related supporting guidelines, which became effective on March 31, 2023 (the “Overseas Listing Regulations”). The Overseas Listing Regulations impose filing requirements on certain direct and indirect overseas securities offerings and listings by PRC domestic enterprises. We do not believe that we are subject to the CSRC filing requirements because, as of the date of this prospectus, (i) we conduct substantially all of our businesses in Hong Kong; (ii) we are headquartered in Hong Kong and all of our officers are employed by our operating subsidiaries in Hong Kong; and (iii) our operating revenue, total profit, total assets, and net assets, as documented in our audited consolidated financial statements for the most recent accounting year prior to this offering, accounted for by our mainland China subsidiary are all under 50%.
However, if our understanding to the Overseas Listing Regulations is wrong or incorrect and we fail to comply with the Overseas Listing Regulations, we will be required to correct our behaviors, face warnings and fines which amount will range from RMB1,000,000 to RMB10,000,000, and directly responsible personnel will also be warned and fined an amount ranging from RMB500,000 to RMB5,000,000.
In the event that (i) the PRC government expands the categories of industries or companies whose overseas securities offerings are subject to review by PRC governmental authorities, such that we are required to obtain additional permissions or approvals, or (ii) we incorrectly conclude that any required permissions or approvals are not necessary or fail to obtain or maintain any required permissions or approvals, the resulting legal consequences could prevent us from offering or continuing to offer our Class A Ordinary Shares, materially disrupt our business operations and cause our Class A Ordinary Shares to significantly decline in value or become worthless.
Under the HFCA Act, as amended, our Class A Ordinary Shares could be prohibited from trading on U.S. securities exchanges if the PCAOB is unable to inspect or investigate completely our auditor for two consecutive years.
The HFCA Act was signed into law on December 18, 2020, and was subsequently amended by the Consolidated Appropriations Act, 2023, to require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchange if its auditor is not subject to PCAOB inspections for two consecutive years.
On December 2, 2021, the SEC adopted final amendments implementing the disclosure and submission requirements under the HFCA Act, pursuant to which the SEC will identify a “Commission-Identified Issuer” if an issuer has filed an annual report containing an audit report issued by a registered public accounting firm that the PCAOB has determined it is unable to inspect or investigate completely, and will impose a trading prohibition on an issuer after it is identified as a Commission-Identified Issuer for two consecutive years.
On December 16, 2021, the PCAOB issued a report to notify the SEC of its determination that the PCAOB was unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong. However, on December 15, 2022, the PCAOB vacated this determination after concluding that it was able to secure complete access to inspect and investigate such firms.
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The lack of access to the PCAOB inspection or investigation of auditors, including but not limited to inspection of auditors’ audit working papers related to their clients in China prevents the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China. As a result, the investors may not enjoy the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections or investigations of auditors, including but not limited to inspection of auditors’ audit working papers related to their clients, in China makes it more difficult to evaluate the effectiveness of these accounting firms’ audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections and investigations, which could cause existing and potential investors in our shares to lose confidence in our audit procedures and reported financial information and the quality of our consolidated financial statements.
Should PRC authorities obstruct the PCAOB’s access in the future, the PCAOB may issue a new determination, and if the PCAOB is unable to inspect or investigate completely our auditor, our securities could be delisted from the stock exchange.
Enrome LLP, our current independent registered public accounting firm, is registered with the PCAOB and is subject to U.S. laws and regulations pursuant to which the PCAOB conducts regular inspections. Enrome is headquartered in Singapore and is not subject to any PCAOB determination that the PCAOB is unable to inspect or investigate the firm completely.
Uncertainties regarding the PCAOB’s continued ability to inspect auditors, as well as further regulatory developments, could cause the market price of our shares to fall. If the PCAOB determines in the future that it cannot inspect the audits of our Hong Kong subsidiaries, the trading of our securities may be prohibited under the HFCA Act and, as a result, Nasdaq may delist our securities. The delisting of our Class A Ordinary Shares, or the threat of their being delisted, may materially and adversely affect the value of your investment.
Risks Relating to Our Dual-Class Share Structure
The dual class structure of our Ordinary Shares has the effect of concentrating voting control with Mr. Hong Zhifang, our Chief Executive Officer, director and controlling shareholder, whose interests may not be aligned with those of our other shareholders.
We have a dual-class voting structure consisting of Class A Ordinary Shares and Class B Ordinary Shares. Under this structure, holders of Class A Ordinary Shares are entitled to one (1) vote per one Class A Ordinary Share, and holders of Class B Ordinary Shares are entitled to one hundred and fifty (150) votes per one Class B Ordinary Share.
As of the date of this prospectus, Hong Zhifang, our Chief Executive Officer, director and controlling shareholder, beneficially owns 20.94% of our issued and outstanding shares, representing approximately 97.48% of the aggregate voting rights of our issued and outstanding Ordinary Shares. Assuming that all Units offered hereby are sold and no Warrants are exercised, Hong Zhifang will beneficially own approximately 6.86% of our issued and outstanding Ordinary Shares and approximately 91.70% of the aggregate voting rights in our Company. Assuming further that all Warrants are exercised using the zero exercise price option, Hong Zhifang will beneficially own approximately 0.73% of our issued and outstanding Ordinary Shares and approximately 52.55% of the aggregate voting rights in our Company.
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The interests of our controlling shareholder may not coincide with your interests, and it may make decisions with which you disagree, including decisions on important topics such as the composition of the board of directors, compensation, management succession, and our business and financial strategy. To the extent that the interests of our controlling shareholder differ from your interests, you may be disadvantaged by any action that they may seek to pursue.
We are a “controlled company” within the meaning of the Nasdaq Listing Rules and may rely on exemptions from certain corporate governance requirements, which could reduce the protections available to our public shareholders.
As of the date of this prospectus, Hong Zhifang, our controlling shareholder, beneficially owns more than 50% of the total voting power of our issued and outstanding Ordinary Shares. As a result, we are a “controlled company” within the meaning of the Nasdaq Listing Rules. As a controlled company, we are eligible to rely on exemptions from certain Nasdaq corporate governance requirements, including the requirements that a majority of our board of directors consist of independent directors, that the compensation of our executive officers be determined or recommended by a compensation committee composed entirely of independent directors, and that director nominees be selected or recommended by independent directors.
Although we do not currently intend to rely on the controlled company exemptions under the Nasdaq Listing Rules, we may elect to rely on one or more of them in the future. If we elect to rely on the controlled company exemptions, holders of our Class A Ordinary Shares may not have the same protections afforded to shareholders of companies that are subject to all of Nasdaq’s corporate governance requirements. If we subsequently cease to qualify as a controlled company, we may be permitted to phase in our compliance with the applicable corporate governance requirements during a transition period.
Risks Relating to Our Securities and This Offering
We are a “foreign private issuer” within the meaning of the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.
We are a foreign private issuer within the meaning of the rules under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). As such, we are exempt from certain provisions applicable to United States domestic public companies, including:
| ● | the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q or current reports on Form 8-K; | |
| ● | the sections of the Exchange Act regulating the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act; | |
| ● | the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and | |
| ● | the selective disclosure rules by issuers of material nonpublic information under Regulation FD. |
We are required to file an annual report on Form 20-F within four months of the end of each fiscal year. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC is less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers.
As an exempted company with limited liability incorporated in the Cayman Islands, we are permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from the Nasdaq Capital Market corporate governance requirements. Currently, we do not plan to rely on home country practice with respect to our corporate governance after the completion of this offering. However, if we were to rely on home country practices in the future, you may not be afforded the same protections or information that would be made available to you were you investing in a U.S. domestic issuer.
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We are an “emerging growth company” within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.
We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 so long as we are an emerging growth company. As a result, if we elect not to comply with such auditor attestation requirements, our investors may not have access to certain information they may deem important.
Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to avail ourselves of an exemption that allows us to delay adopting new or revised accounting standards until such time as those standards apply to private companies. As a result, we will not be subject to the same new or revised accounting standards as other public companies that comply with the public company effective dates. We have also elected to take advantage of certain reduced disclosure obligations in the registration statement of which this prospectus is a part and may elect to take advantage of other reduced reporting requirements in future filings. As a result, you may not have access to certain information that would otherwise be accessible for another public company that is not an emerging growth company.
If holders of the Warrants elect to exercise the Warrants using the zero exercise price option, our shareholders will suffer substantial additional dilution, and we may not receive any proceeds from the exercise of the Warrants.
The Warrants contain a zero exercise price option under which a holder may, at any time while the Warrants are outstanding, receive up to 52,380,944 Class A Ordinary Shares for each Warrant exercised without paying any additional cash consideration. Accordingly, the zero exercise price option allows a holder to receive more Class A Ordinary Shares, without additional payment, than the holder would receive upon a cash exercise or cashless exercise.
Given the economic terms of the zero exercise price option, we anticipate that holders will elect to use that option rather than exercise the Warrants on a cash or cashless basis. If all Warrants sold in this offering are exercised using the zero exercise price option, we will issue up to 52,380,944 additional Class A Ordinary Shares and will not receive any proceeds from those exercises. The issuance and potential resale of those shares will substantially dilute our existing shareholders and could materially adversely affect the market price of our Class A Ordinary Shares.
We are selling a substantial number of Class A Ordinary Shares in this offering, which could cause the price of our Class A Ordinary Shares to decline.
We are offering up to 4,166,666 Units, consisting of 4,166,666 Class A Ordinary Shares and 4,166,666 Warrants, or up to 4,166,666 Pre-Funded Units, consisting of 4,166,666 Pre-Funded Warrant to purchase 4,166,666 Class A Ordinary Share and 4,166,666 Warrants. If holders exercise all of the Warrants using the zero exercise price option, we will issue up to an additional 52,380,944 Class A Ordinary Shares. Accordingly, we may issue up to an aggregate of 56,847,610 Class A Ordinary Shares in connection with this offering.
Assuming all Units offered hereby are sold and all Warrants are exercised using the zero exercise price option, the Class A Ordinary Shares issued in connection with this offering would represent approximately 96.42% of the total number of our Class A Ordinary Shares outstanding after giving effect to those issuances.
The issuance of these Class A Ordinary Shares will dilute the ownership and voting interests of our existing shareholders. The actual or anticipated issuance of these shares could also adversely affect the market price of our Class A Ordinary Shares and impair our ability to raise additional capital through future equity offerings.
This is a best-efforts offering with no minimum offering amount, and we may not raise sufficient capital to fund our business plans.
The Placement Agent has agreed to use its best efforts to arrange for the sale of the Units offered by this prospectus. The Placement Agent is not purchasing or selling any of the Units and is not required to arrange for the purchase or sale of any specific number or dollar amount of Units. There is no minimum number of Units or minimum amount of proceeds required as a condition to the closing of this offering, and we have not established an escrow, trust or similar arrangement for the funds received from investors.
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Accordingly, an investor’s purchase will not be conditioned on our selling all, or any minimum number, of the Units offered hereby or on our raising sufficient proceeds to fund the intended uses described in this prospectus. Once the closing occurs, investors will not be entitled to a refund solely because we have not sold enough Units or raised sufficient proceeds to implement our business plans.
Because the actual number of Units sold is uncertain, the amount of the placement agent fees and the net proceeds available to us cannot presently be determined and may be substantially less than the maximum amounts described in this prospectus. If we sell substantially fewer than all the Units offered hereby, we may not raise sufficient capital to fund our planned operations or intended uses of proceeds. In that event, we may be required to reduce or delay our planned expenditures or seek additional financing sooner than anticipated. Additional financing may not be available when needed, on acceptable terms or at all.
The sale or availability for sale of substantial amounts of our Class A Ordinary Shares could adversely affect their market price.
Sales of substantial amounts of our Class A Ordinary Shares in the public market after the completion of this offering, or the perception that these sales could occur, could adversely affect the market price of our Class A Ordinary Shares and could materially impair our ability to raise capital through equity offerings in the future. As of the date of this prospectus, we had 1,667,701 Class A Ordinary Shares and 429,886 Class B Ordinary Shares issued and outstanding. Each Class B Ordinary Share is convertible into one Class A Ordinary Share. The Class A Ordinary Shares sold in this offering, including the Class A Ordinary Shares issuable upon exercise of the Warrants will be freely tradable without restriction or further registration under the Securities Act, and shares held by our existing shareholders may also be sold in the public market in the future subject to the restrictions in Rule 144 and Rule 701 under the Securities Act. We cannot predict what effect, if any, market sales of Class A Ordinary Shares held by our significant shareholders or any other shareholder or the availability of these Class A Ordinary Shares for future sale will have on the market price of our Class A Ordinary Shares. See “Plan of Distribution” and “Shares Eligible for Future Sale” for a more detailed description of the restrictions on selling our Class A Ordinary Shares after this offering.
This offering may cause the price of our Class A Ordinary Shares to decline and fall below the minimum bid price requirement under the Nasdaq Listing Rules, which could result in the delisting of our Class A Ordinary Shares.
Our Class A Ordinary Shares are currently listed on the Nasdaq Capital Market. Continued listing of a security on the Nasdaq Capital Market is conditioned upon compliance with various continued listing standards. In particular, the requirements for the Nasdaq Capital Market impose a minimum $1.00 per share bid price requirement. To comply with this requirement, the closing bid price for our Class A Ordinary Shares must not fall below $1.00 for a 30 consecutive trading day period. If we are unable to maintain a minimum closing bid price of $1.00 per Class A Ordinary Share for the preceding 30 consecutive trading days, we will receive a deficiency letter from the staff of Nasdaq, or the Staff. The Staff may provide us with a 180-calendar day grace period to regain compliance with the bid price requirement.
Additionally, in the event of a delisting notice, we would typically have an opportunity to appeal such decision to the Nasdaq Hearing Panel or take other measures to preserve the listing of our Class A Ordinary Shares on the Nasdaq Capital Market, but these measures and any appeal may not be successful. If our Class A Ordinary Shares are delisted by Nasdaq, our Class A Ordinary Shares may be eligible to trade on an over-the-counter quotation system, where an investor may find it more difficult to sell our Class A Ordinary Shares or obtain accurate quotations as to the market value of our Class A Ordinary Shares. We cannot ensure that our Class A Ordinary Shares, if delisted from the Nasdaq Capital Market, will be listed on any national securities exchange or quoted on an over-the counter quotation system.
On November 18, 2025, we received a notification letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC, or the Nasdaq, indicating that we were not in compliance with the minimum bid price requirement under the Nasdaq listing rules. We did not regain compliance during the initial 180-calendar-day compliance period ended May 18, 2026. Nasdaq subsequently granted us an additional 180-calendar-day period, through November 16, 2026, to regain compliance. On May 27, 2026, Nasdaq confirmed that the closing bid price of our Class A Ordinary Shares had been at least $1.00 per share for 10 consecutive business days, from May 12, 2026 through May 26, 2026. Accordingly, we regained compliance with Nasdaq Listing Rule 5550(a)(2), and the matter was closed. However, there can be no assurance that we will continue to satisfy the minimum bid price requirement or Nasdaq’s other continued listing requirements. If we fail to maintain compliance and are unable to regain compliance within any applicable cure period, our Class A Ordinary Shares could be delisted.
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In the event we are delisted from the Nasdaq Capital Market, the only established trading market for our Class A Ordinary Shares would be eliminated, and we would be forced to list our shares on the OTC Markets or another quotation medium, depending on our ability to meet the specific listing requirements of those quotation systems. As a result, an investor would likely find it more difficult to trade or obtain accurate price quotations for our Class A Ordinary Shares. Delisting would likely also reduce the visibility, liquidity, and value of our Class A Ordinary Shares, reduce institutional investor interest in our company, and may increase the volatility of our Class A Ordinary Shares. Delisting could also cause a loss of confidence of potential industry partners, lenders, and employees, which could further harm our business and our future prospects.
Unless our Class A Ordinary Shares are listed on a national securities exchange, such as Nasdaq, our Class A Ordinary Shares will also likely be subject to the regulations and restrictions regarding trading in “penny stocks,” which are those securities trading for less than $5.00 per share, and that are not otherwise exempted from the definition of a penny stock under other exemptions provided for in the applicable regulations. These penny stock requirements and regulations could severely limit the liquidity of our Class A Ordinary Shares in the secondary market because fewer brokers or dealers would be likely to be willing to undertake related compliance activities to trade in our Class A Ordinary Shares. If our Class A Ordinary Shares are not listed on a national securities exchange, the rules and restrictions regarding penny stock transactions may limit an investor’s ability to sell to a third-party and our trading activity in the secondary market may be reduced.
There is no public market for the Pre-Funded Warrants or Warrants, and an active trading market for the Pre-Funded Warrants or Warrants is not expected to develop.
There is currently no established public trading market for the Pre-Funded Warrants or Warrants. We do not intend to apply to list the Pre-Funded Warrants or Warrants on the Nasdaq Capital Market or any other national securities exchange or trading system. Although the Class A Ordinary Shares and Warrants will be sold together as Units (or, in the case of Pre-Funded Units, Pre-Funded Warrants with Warrants), the Units and Pre-Funded Units will have no stand-alone rights and their component securities will be immediately separable and issued separately.
Without an active trading market, holders may be unable to sell their Pre-Funded Warrants or Warrants or obtain an accurate market quotation for them. The liquidity and value of the Pre-Funded Warrants and Warrants will therefore be limited. In addition, the Warrants will expire six (6) months after their issuance. Any Warrant not exercised before its expiration will expire without value. The Pre-Funded Warrants will not expire.
We have broad discretion in the use of the net proceeds from this offering and may not use them effectively.
To the extent we determine that the proposed uses as described under “Use of Proceeds” are no longer in the best interests of our Company, we cannot specify with any certainty the particular uses of such net proceeds that we will receive from this offering. Our management will have broad discretion in the application of such net proceeds, including working capital and other general corporate purposes, and we may spend or invest these proceeds in a way with which our shareholders disagree. The failure by our management to apply these funds effectively could harm our business and financial condition. Pending their use, we may invest the net proceeds from our public offering in a manner that does not produce income or that loses value.
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements that reflect our current expectations and views of future events, all of which are subject to risks and uncertainties. Forward-looking statements give our current expectations or forecasts of future events. You can identify these statements by the fact that they do not relate strictly to historical or current facts. You can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may,” or other similar expressions in this prospectus. These statements are likely to address our growth strategy, financial results, and product and development programs. You must carefully consider any such statements and should understand that many factors could cause actual results to differ from our forward-looking statements. These factors may include inaccurate assumptions and a broad variety of other risks and uncertainties, including some that are known and some that are not. No forward-looking statement can be guaranteed and actual future results may vary materially. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to:
| ● | assumptions about our future financial and operating results, including revenue, income, expenditures, cash balances, and other financial items; | |
| ● | our ability to execute our growth, and expansion, including our ability to meet our goals; | |
| ● | current and future economic and political conditions; | |
| ● | our capital requirements and our ability to raise any additional financing which we may require; | |
| ● | our ability to attract customers and dealers and further enhance our brand recognition; | |
| ● | our ability to hire and retain qualified management personnel and key employees in order to enable us to develop our business; | |
| ● | trends and competition in the electric vehicle industry; and | |
| ● | other assumptions described in this prospectus underlying or relating to any forward-looking statements. |
We describe certain material risks, uncertainties, and assumptions that could affect our business, including our financial condition and results of operations, under “Risk Factors.” We base our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may, and are likely to, differ materially from what is expressed, implied or forecast by our forward-looking statements. Accordingly, you should be careful about relying on any forward-looking statements. Except as required under the federal securities laws, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this prospectus, whether as a result of new information, future events, changes in assumptions, or otherwise.
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ENFORCEABILITY OF CIVIL LIABILITIES
We are incorporated under the laws of the Cayman Islands as an exempted company with limited liability. We are incorporated in the Cayman Islands because of certain benefits associated with being a Cayman Islands company, such as political and economic stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions and the availability of professional and support services. However, the Cayman Islands has a less developed body of securities laws as compared to the United States and provides less protection for investors. In addition, Cayman 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, most of our directors and executive officers are nationals or residents of jurisdictions other than the United States and substantially all of their assets are located outside the United States. As a result, it may be difficult or impossible for you to effect service of process within the United States upon us or these persons, or to enforce judgments obtained in U.S. courts against us or them, including judgments predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States. It may also be difficult for you to enforce judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and our executive officers and directors.
We have appointed Cogency Global Inc. as our agent to receive service of process with respect to any action brought against us in the United States in connection with this offering under the federal securities laws of the United States or of any State in the United States. The address of our agent is 122 East 42nd Street, 18th Floor, New York, NY 10168.
Cayman Islands
There may be uncertainty as to whether the courts of the Cayman Islands would (i) recognize or enforce judgments of United States courts obtained against us predicated upon the civil liability provisions of the securities laws of the United States and (ii) entertain original actions brought in the Cayman Islands against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.
Appleby, our counsel with respect to the laws of the Cayman Islands, has advised us that any final and conclusive judgment for a definite sum (not being a sum payable in respect of taxes or other charges of a like nature nor a fine or other penalty) and/or certain non-monetary judgments rendered in any action or proceedings brought against our Company in a foreign court (other than certain judgments of a superior court of certain states of the Commonwealth of Australia) will be recognized as a valid judgment by the courts of the Cayman Islands without re-examination of the merits of the case. On general principles, such proceedings would be expected to be successful provided that the court which gave the judgment was competent to hear the action in accordance with private international law principles as applied in the Cayman Islands and the judgment is not contrary to public policy in the Cayman Islands, has not been obtained by fraud or in proceedings contrary to natural justice.
Hong Kong
There is uncertainty as to whether the courts of Hong Kong would recognize or enforce judgments of U.S. courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, or entertain original actions brought in Hong Kong against us or our directors or officers predicated upon such securities laws.
A judgment of a U.S. court predicated upon U.S. federal or state securities laws may be enforced in Hong Kong at common law by bringing an action in a Hong Kong court on that judgment for the amount due thereunder and then seeking summary judgment on the strength of the foreign judgment, provided that the foreign judgment, among other things, is: (i) for a debt or a definite sum of money, other than taxes or similar charges payable to a foreign governmental taxing authority or a fine or other penalty; and (ii) final and conclusive on the merits of the claim. Such a judgment may not be enforced in Hong Kong if: (i) it was obtained by fraud; (ii) the proceedings in which the judgment was obtained were opposed to natural justice; (iii) its enforcement or recognition would be contrary to the public policy of Hong Kong; (iv) the U.S. court was not jurisdictionally competent; or (v) the judgment conflicts with a prior Hong Kong judgment.
Hong Kong has no arrangement with the United States for the reciprocal enforcement of judgments. As a result, there is uncertainty as to the enforceability in Hong Kong, whether in original actions or actions for enforcement, of judgments of U.S. courts imposing civil liabilities predicated solely upon the federal securities laws of the United States or the securities laws of any state or territory of the United States.
PRC
Under the PRC Civil Procedure Law, where a legally effective judgment or ruling made by a foreign court requires recognition and enforcement by a PRC court, a party may apply directly to a competent intermediate PRC court for recognition and enforcement, or the foreign court may request recognition and enforcement by a PRC court pursuant to an applicable international treaty concluded or acceded to by the PRC or in accordance with the principle of reciprocity. Upon examining such an application or request pursuant to an applicable international treaty or in accordance with the principle of reciprocity, a PRC court may recognize a legally effective foreign judgment or ruling if it determines that such judgment or ruling does not violate the basic principles of PRC law or the sovereignty, security or public interest of the PRC. If enforcement is required, the PRC court may issue an enforcement order in accordance with the applicable provisions of the PRC Civil Procedure Law. If the PRC court determines that the foreign judgment or ruling violates any such principles or interests, the judgment or ruling will not be recognized or enforced.
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Assuming we sell all of the Units offered pursuant to this prospectus, we estimate that the net proceeds from this offering will be approximately US$4.59 million, based on an assumed public offering price of US$1.20 per Unit, after deducting the placement agent’s commissions and estimated offering expenses payable by us, and excluding any proceeds from the cash exercise of the Warrants. Because this is a best-efforts offering with no minimum offering amount, the actual net proceeds may be substantially less than this amount.
We intend to use the net proceeds from this offering for the operations team to fund our development programs and for working capital and other general corporate purposes.
The allocation of the net proceeds of the offering represents our estimates based upon our current plans and assumptions regarding industry and general economic conditions, our future revenues and expenditures.
As of the date of this prospectus, we cannot predict with certainty all of the particular uses for the net proceeds to be received upon completion of this offering, or the amount we will actually spend on the uses set forth above. The amounts and timing of our actual use of net proceeds will vary depending on numerous factors, including the relative success and cost of our research and development programs, our ability to gain access to additional financing, and other factors described under “Risk Factors” in this prospectus and in our 2025 Annual Report. As a result, our management will have broad discretion in the application of the net proceeds, and investors will be relying on our management’s judgment regarding the application of the net proceeds of this offering.
Given the economic terms of the zero exercise price option under the Warrants, we do not expect to receive any proceeds from the exercise of the Warrants. If any Warrants are exercised for cash, we intend to use the resulting proceeds for working capital and other general corporate purposes.
Pending the application of the net proceeds as described above, we will hold the net proceeds from this offering in short-term, interest-bearing, securities.
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We currently intend to retain most, if not all, of our available funds and any future earnings to fund the development and growth of our business. As a result, we do not expect to pay any cash dividends in the foreseeable future.
Our board of directors has discretion as to whether to distribute dividends, subject to certain restrictions under Cayman Islands law, namely that our company may only pay dividends out of profits or share premium; provided that in no circumstances may a dividend be paid if this would result in our company being unable to pay its debts as they fall due in the ordinary course of business. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our board of directors. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors.
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The following unaudited pro-forma financial statements sets forth our capitalization as of March 31, 2026:
| ● | on an actual basis; |
| ● | on a pro forma basis, giving effect to the following transactions: (a) payment of $800,000 to purchase certain short video dramas content through the issuance of 142,857 shares, after giving effect to the 16-for-1 reverse share split; (b) gross proceeds of $3,790,000 raised via a private investment in public equity (PIPE) financing, effected through the issuance of 587,500 Class A Ordinary Shares (post the 16-for-1 reverse share split) and 89,286 Class B Ordinary Shares (post the 16-for-1 reverse share split); and (c) The issuance of 20,131 additional Class A Ordinary Shares as an adjustment directly resulting from the 16-for-1 reverse share split; and |
| ● | on an as adjusted basis to reflect the issuance and sale of the Class A Ordinary Shares by us in this offering (assuming all Warrants to purchase Class A Ordinary Shares issued in this offering are exercised using zero exercise price) at the offering price of $1.20 per share, and after deducting the offering expenses payable by us, we estimated the net proceeds will be approximately $4,594,999. |
| As of March 31, 2026 | ||||||||||||
| As Adjusted | ||||||||||||
| Actual | Pro forma | For the Offering | ||||||||||
| Long term loan | - | - | - | |||||||||
| Shareholders’ equity: | ||||||||||||
| Class A ordinary shares ($0.0016 par value, 28,125,000 shares authorized, 917,213 Class A ordinary shares issued as of March 31, 2026 on actual basis; 5,083,879 issued as adjusted for the offering) | $ | 1,468 | $ | 2,668 | $ | 9,335 | ||||||
| Class B ordinary shares ($0.0016 par value, 3,125,000 shares authorized, 340,600 Class B ordinary shares issued as of March 31, 2026 on actual basis; 340,600 issued as adjusted for the offering) | 545 | 688 | 688 | |||||||||
| Additional paid-in capital | 19,129,328 | 23,717,985 | 28,306,317 | |||||||||
| Accumulated deficits | (14,248,033 | ) | (14,248,033 | ) | (14,248,033 | ) | ||||||
| Accumulated other comprehensive loss | (1,743 | ) | (1,743 | ) | (1,743 | ) | ||||||
| Total Equity | $ | 4,881,565 | $ | 9,471,565 | $ | 14,066,564 | ||||||
| Total Capitalization | $ | 4,881,565 | $ | 9,471,565 | $ | 14,066,564 | ||||||
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DILUTION
If you purchase Units in this offering, your ownership interest will be diluted to the extent of the difference between the assumed public offering price per Unit, with no value attributed to the Warrant included in each Unit, and our as-adjusted net tangible book value per Ordinary Share immediately after this offering. The calculations below assume that all of the Units offered hereby are sold and that none of the Warrants is exercised. Any issuance of Class A Ordinary Shares upon exercise of the Warrants would affect our net tangible book value per Ordinary Share and may result in additional dilution to our shareholders.
Our net tangible book value as of March 31, 2026 was approximately $4.9 million, or $3.88 per ordinary share, calculated on the combined basis of all issued and outstanding Class A and Class B Ordinary Shares. Net tangible book value per ordinary share is determined by dividing our total tangible assets, less total liabilities, by the total number of our Ordinary Shares outstanding as of March 31, 2026.
For purposes of the dilution table below, all per share calculations are presented on the basis of only our issued and outstanding Class A Ordinary Shares, as the Class B Ordinary Shares are not participating in this offering and are not entitled to the same economic rights as the newly issued Class A Ordinary Shares from this transaction.
After giving effect to the sale of all 4,166,666 Units offered hereby at an assumed public offering price of $1.20 per Unit (assuming all Warrants to purchase Class A Ordinary Shares issued in this offering are exercised using zero exercise price), and after deducting the placement agent’s commissions and estimated offering expenses payable by us, our as-adjusted net tangible book value as of March 31, 2026 would have been approximately $14.1 million, or $2.41 per Class A Ordinary Share. This would represent an immediate decrease in net tangible book value of $2.91 per Class A Ordinary Share to our existing shareholders and immediate accretion in net tangible book value of $1.21 per Class A Ordinary Share to purchasers of Units in this offering.
The final public offering price will be determined through negotiation between us and Placement Agent in the offering and may be at a discount to the current market price. Therefore, the assumed public offering price used throughout this prospectus may not be indicative of the final public offering price.
The following table illustrates this dilution on a per ordinary share basis:
| As at March 31, | ||||
| Per Ordinary Shares | ||||
| Assumed public offering price per Class A ordinary share | $ | 1.20 | ||
| Historical net tangible book value per Class A ordinary share as of March 31, 2026 | $ | 5.32 | ||
| Decrease to net tangible book value per Class A ordinary share attributable to existing shareholders | $ | (2.91 | ) | |
| As adjusted net tangible book value per Class A ordinary share as of March 31, 2026, after giving effect to this offering | $ | 2.41 | ||
| Accretion per Class A ordinary share to the investors in this offering | $ | 1.21 | ||
A US$1.00 increase in the assumed public offering price of $1.20 per Unit would increase our as-adjusted net tangible book value per Class A Ordinary Share by approximately $0.68 and increase accretion in net tangible book value per Class A Ordinary Share to purchasers of Units in this offering by approximately $0.68. These calculations assume that none of the Warrants is exercised and the placement agent’s commissions and estimated offering expenses payable by us are deducted.
The information above is illustrative only and will be adjusted based on the actual public offering price, the actual number of Units sold and the other terms of this offering determined at the time of pricing. We may raise additional capital in the future due to market conditions, strategic considerations or other factors. To the extent we raise additional capital through the issuance of equity or convertible securities, such issuances could result in further dilution to our shareholders.
Except as otherwise noted, all information in this prospectus reflects and assumes no exercise of any warrants issued in this offering.
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MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
You should read the discussion and analysis of our financial condition and results of operations in conjunction with our audited consolidated financial statements and accompanying notes for the year ended September 30, 2025 included in our 2025 Annual Report, filed with the SEC on January 30, 2026, as well as our unaudited condensed consolidated financial statements for the six months ended March 31, 2026, included in our current report on Form 6-K filed with the SEC on August 13, 2026. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information regarding the beneficial ownership of our Ordinary Shares as of the date of this prospectus by our officers, directors, and 5% or greater beneficial owners of Ordinary Shares. There is no other person or group of affiliated persons known by us to beneficially own more than 5% of our Ordinary Shares. The following table assumes that none of our officers, directors or 5% or greater beneficial owners of our Ordinary Shares will purchase shares in this Offering.
In addition, the following table assumes that the over-allotment option has not been exercised. Holders of our Class A Ordinary Shares are entitled to one (1) vote per share and holders of our Class B Ordinary Shares are entitled to one hundred and fifty (150) votes per share. Our Class B Ordinary Shares are convertible at any time by the holder into Class A Ordinary Shares on a one-for-one basis, while Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. Upon a transfer of any Class B Ordinary Shares by a holder thereof to any person other than certain permitted transferees or a change in the beneficial owner of such Class B Ordinary Shares, such Class B Ordinary Shares will be automatically and immediately converted into Class A Ordinary Shares on a one-for-one basis. Holders of our Shares are entitled to vote on all matters submitted to a vote of our Shareholders, except as may otherwise be required by law.
We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Unless otherwise indicated, the person identified in this table has sole voting and investment power with respect to all shares shown as beneficially owned by him, subject to applicable community property laws.
Class A Ordinary Shares | Class B Ordinary Shares | Aggregate Voting Power | ||||||||||||||||||
| Name of Beneficial Owners | Number | %(1) | Number | %(1) | %(1) | |||||||||||||||
| Directors and Executive Officers: | ||||||||||||||||||||
| Hong Zhifang(2) | - | - | 429,886 | 20.492 | % | 97.48 | % | |||||||||||||
| All directors and executive officers as a group | - | - | 429,886 | 20.49 | % | 97.48 | % | |||||||||||||
| 5% shareholders: | ||||||||||||||||||||
| Rongstar Holding Ltd(2) | - | - | 340,600 | 16.24 | % | 77.23 | % | |||||||||||||
| Hong Kong Huiying Technology Network Limited(3) | 142,858 | 6.81 | % | - | - | 0.22 | % | |||||||||||||
| Weijie Cold Chainlogistics Co., Ltd(4) | 125,000 | 5.96 | % | - | - | 0.19 | % | |||||||||||||
| Hong Chunnan (5) | 109,668 | 5.23 | % | - | - | 0.17 | % | |||||||||||||
| (1) | Applicable percentage of ownership is based on 1,667,701 Class A Ordinary Shares and 429,886 Class B Ordinary Shares outstanding as of the date of this prospectus. Each Class A Ordinary Share shall, on a poll, be entitled to one (1) vote per share, and each Class B Ordinary Share shall, on a poll, be entitled to one hundred and fifty (150) votes per share. | |
| (2) | Represents (i) 89,286 Class B Ordinary Shares held by Hong Zhifang and (ii) 340,600 Class B Ordinary Shares held by Rongstar Holding Ltd, which Hong Zhifang is the sole shareholder and he holds the voting and dispositive power over the ordinary shares held by such entity. | |
| (3) | Yu Defang beneficially owns in aggregate 6.81% of the outstanding Ordinary Shares of the Company and in aggregate 0.22% voting power, through his 100% ownership of Hong Kong Huiying Technology Network Limited. | |
| (4) | Chen Zhiqiang beneficially owns in aggregate 5.96% of the outstanding Ordinary Shares of the Company and in aggregate 0.19% voting power, through his 100% ownership of Weijie Cold Chainlogistics Co., Ltd. | |
| (5) | Hong Chunnan beneficially owns in aggregate 5.23% of the outstanding Ordinary Shares of the Company and in aggregate 0.17% voting power of the Company. |
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SHARES ELIGIBLE FOR FUTURE SALE
Upon completion of this offering, we will have 58,645,197 Class A Ordinary Shares issued. In addition, for each Class A Ordinary Share sold in this offering, one (1) additional Class A Ordinary Shares will be issuable upon exercise of each Warrant issued in connection with each Class A Ordinary Share sold or approximately 12 additional Class A Ordinary Shares will be issuable under each Warrant upon exercise at the zero exercise price. All of the Class A Ordinary Shares sold in this Offering will be freely transferable by persons other than by our “affiliates” without restriction or further registration under the Securities Act. Sales of substantial amounts of our Class A Ordinary Shares in the public market could adversely affect prevailing market prices of our Class A Ordinary Shares.
Rule 144
In general, under Rule 144 as currently in effect, a person (or persons whose shares are aggregated) who at the time of a sale is not, and has not been during the three months preceding the sale, an affiliate of ours and has beneficially owned our restricted securities for at least six months is entitled to sell the restricted securities without registration under the Securities Act, subject to the availability of current public information about us, and will be entitled to sell restricted securities beneficially owned for at least one year without restriction. Persons who are our affiliates (including persons beneficially owning 10% or more of our outstanding shares) and have beneficially owned our restricted securities for at least six months may sell within any three-month period a number of restricted securities that does not exceed the greater of the following:
| ● | 1% of the then outstanding ordinary shares of the same class, which will equal approximately 586,452 Class A Ordinary Shares immediately after this offering, assuming the sales of all of the Class A Ordinary Shares we are offering; and | |
| ● | the average weekly trading volume of our ordinary shares of the same class on the Nasdaq Capital Market during the four calendar weeks preceding the date on which notice of the sale on Form 144 is filed with the SEC. |
Such sales are also subject to manner-of-sale provisions, notice requirements and the availability of current public information about us.
Persons who are our affiliates and have beneficially owned our restricted securities for at least six months may sell a number of restricted securities within any three-month period that does not exceed the greater of the following:
| ● | 1% of the then outstanding Ordinary Shares which will equal approximately 586,452 Ordinary Shares assuming sale of all the units we are offering at the closing; or | |
| ● | the average weekly trading volume of our Ordinary Shares on Nasdaq during the four calendar weeks preceding the date on which notice of the sale is filed with the SEC. Sales by our affiliates under Rule 144 are also subject to certain requirements relating to the manner of sale, notice and the availability of current public information about us. |
Rule 701
In general, under Rule 701 of the Securities Act as currently in effect, each of our employees, consultants or advisors who purchases our Ordinary Shares from us in connection with a compensatory stock or option plan or other written agreement relating to compensation is eligible to resell such Ordinary Shares 90 days after we became a reporting Company under the Exchange Act in reliance on Rule 144, but without compliance with some of the restrictions, including the holding period, contained in Rule 144.
Transfer Agent and Registrar
The transfer agent and registrar for our Ordinary Shares is Transhare Corporation.
Regulation S
Regulation S provides generally that sales made in offshore transactions are not subject to the registration or prospectus-delivery requirements of the Securities Act.
Selling Restrictions
No action has been taken in any jurisdiction except the United States that would permit a public offering of our Ordinary Shares, or the possession, circulation or distribution of this prospectus or any other material relating to us or our Ordinary Shares in any jurisdiction where action for that purpose is required. Accordingly, the shares may not be offered or sold, directly or indirectly, and neither this prospectus nor any other offering material or advertisements in connection with the shares may be distributed or published, in or from any country or jurisdiction except in compliance with any applicable rules and regulations of any such country or jurisdiction.
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DESCRIPTION OF SECURITIES WE ARE OFFERING
Units and Pre-Funded Units
We are offering the Units on a best-efforts basis at an assumed public offering price of $1.20 per Unit. We are also offering the Pre-Funded Units at an assumed public offering price of $1.1999 per Pre-Funded Unit (equal to the public offering price per Unit minus $0.0001). The final public offering prices per Unit and per Pre-Funded Unit will be determined through negotiations between us and the Placement Agent.
Each Unit consists of one Class A Ordinary Share and one Warrant. Each Pre-Funded Unit consists of one Pre-Funded Warrant and one Warrant. The Units and Pre-Funded Units will have no stand-alone rights and will not be certificated or issued as separate securities. The Class A Ordinary Shares offered hereby may be purchased only with the accompanying Warrants as part of the Units (or, in the case of Pre-Funded Units, Pre-Funded Warrants with accompanying Warrants). The Class A Ordinary Shares, Pre-Funded Warrants and Warrants comprising the Units and Pre-Funded Units will be issued separately and will be immediately separable upon issuance.
Class A Ordinary Shares
The following is a summary of the material terms and provisions of our Class A Ordinary Shares and the rights of any other class of securities that qualify or limit the rights of our Class A Ordinary Shares. A more complete description is contained in Exhibit 2.1 to our 2025 Annual Report, which is incorporated herein by reference, as updated by any subsequently filed amendment or report incorporated herein by reference. This summary is qualified in its entirety by reference to those documents. See “Incorporation of Certain Information by Reference.”
Voting Rights
Voting at any meeting of shareholders is conducted by poll, with votes counted according to the voting rights attached to the shares held by each shareholder. Each Class A Ordinary Share is entitled to one vote, and each Class B Ordinary Share is entitled to one hundred and fifty (150) votes. All shareholders holding shares of a particular class are also entitled to vote at a meeting of the holders of that class of shares.
An ordinary resolution requires the affirmative vote of a simple majority of the votes cast by shareholders entitled to vote and present in person or represented by proxy at a meeting. A special resolution requires the affirmative vote of at least two-thirds of the votes cast by such shareholders. A special resolution will be required for important matters such as a change of name or making changes to our second amended and restated memorandum and articles of association. Holders of the shares may, among other things, divide or combine their shares by ordinary resolution.
Dividends
Holders of our Class A Ordinary Shares are entitled to receive dividends declared by our board of directors out of funds lawfully available for distribution. Our shareholders may also declare dividends by ordinary resolution, but no dividend may exceed the amount recommended by our board of directors. Under Cayman Islands law, dividends may be paid out of profits or amounts standing to the credit of our share premium account, provided that, immediately following the payment, we are able to pay our debts as they fall due in the ordinary course of business.
Transferability
Subject to our second amended and restated memorandum and articles of association, applicable law and the rules of the Nasdaq Capital Market, our Class A Ordinary Shares may be transferred by an instrument of transfer in the usual or common form, in a form prescribed by the Nasdaq Capital Market (if such shares are listed on the Nasdaq Capital Market) or in another form approved by our board of directors. The transferor will remain the registered holder of the Class A Ordinary Shares until the transferee’s name is entered in our register of members.
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Our board of directors may decline to register a transfer if the applicable registration requirements are not satisfied. With respect to Class A Ordinary Shares not listed on or subject to the rules of the Nasdaq Capital Market, our board of directors may, in its absolute discretion, decline to register a transfer of shares that are not fully paid or are subject to a lien in our favor. If our board of directors refuses to register a transfer, it must notify the transferor and the transferee within one month after the date on which the instrument of transfer is lodged with us.
Subject to applicable notice requirements, including any notice required by the Nasdaq Capital Market, our board of directors may suspend the registration of transfers and close our register of members upon 14 clear days’ notice, provided that the suspension or closure may not exceed 30 clear days in any year.
Variation of Class Rights
The rights attached to a class of shares may be varied with the written consent of holders of two-thirds of the issued shares of that class or by a special resolution passed at a separate meeting of the holders of that class. Unless otherwise expressly provided by the terms of issuance, the creation or issuance of additional shares ranking pari passu with an existing class will not constitute a variation of the rights of that class.
Transfer Agent and Registrar
The transfer agent and registrar for the Class A Ordinary Shares is Transhare Corporation.
Warrants
The Warrants offered hereby will be issued in the form filed as an exhibit to the registration statement of which this prospectus is a part and the following summary is not complete and is subject to and qualified in its entirety by reference to the form of Warrant. Prospective investors should carefully review the form of the Warrant for a complete description of the terms and conditions applicable to the Warrant.
Exercise Price
The assumed initial exercise price per Class A Ordinary Share purchasable upon exercise of the Warrant is $2.04 per share. The final exercise price of the Warrant will be determined based on negotiations with the Placement Agent on behalf of the prospective investors in this offering. The exercise price and number of Class A Ordinary Shares issuable upon exercise are subject to appropriate adjustment in the event of share dividends, share splits, share combinations, reorganizations or similar events affecting our Class A Ordinary Shares. The initial exercise price of $2.04 for each of the Warrants was determined at 170% of the assumed public offering price of $1.20 per Unit. The exercise price may be subject to adjustments as described in the Warrant. Such adjustments occur in the following circumstances: (i) if the Company effects any share splits, combinations, reclassifications, or share dividends, the exercise price may be adjusted proportionately; and (ii) in the event of certain corporate transactions such as mergers or reorganizations, the exercise price may be adjusted to reflect the consideration received by holders of Class A Ordinary Shares in the transaction.
Exercisability
Each Warrant is exercisable at the option of the holder at any time on or after the issuance date until sixth month of the issuance date.
Each Warrant will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full of the exercise price in immediately available funds for the number of Class A Ordinary Shares issuable upon such exercise (except in the case of a cashless exercise or zero exercise price option as discussed below).
A holder may not exercise any portion of the Warrant to the extent that the holder (together with its affiliates) would beneficially own more than 4.99% (or, at the election of the holder, 9.99%) of the outstanding Class A Ordinary Shares immediately after exercise. However, upon notice from the holder to us, the holder may decrease or increase the holder’s beneficial ownership limitation, which may not exceed 4.99% (or, at the election of the holder, 9.99%) of the number of outstanding Class A Ordinary Shares immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Warrants, provided that any increase in the beneficial ownership limitation will not take effect until 61 days following notice to us.
Cashless Exercise and Zero Exercise Price Option
If and only if at the time of any exercise of the Warrant, there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Class A Ordinary Shares underlying the Warrants to the holder, in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the number of Class A Ordinary Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where (A) = trading price determined in accordance with the Warrants; (B) = the exercise price of the Warrants; and (X) = the number of warrant shares that would be issuable upon exercise of such Warrants by means of a cash exercise rather than a cashless exercise. Subject to customary adjustments for share dividends, splits or other changes in share capital, the maximum number of Class A Ordinary Shares issuable upon cashless exercise of the Warrants is 4,166,666.
A holder of the Warrants may also effect an exercise at a zero exercise price (the “zero exercise price option”) to receive approximately 12 Class A Ordinary Shares under each Warrant at any time while the Warrants are outstanding. The aggregate number of Class A Ordinary Shares issuable pursuant to the zero exercise price option is up to 52,380,944.
Notwithstanding the cash exercise at the initial exercise price of $2.04 per Class A Ordinary Share and the cashless exercise based on the same initial exercise price, the zero exercise price option allows exercise of the Warrants for no additional consideration. In addition, the number of Class A Ordinary Shares that investors will receive under the zero exercise price option will be more than such number of Class A Ordinary Shares that is issuable upon cash exercise or cashless exercise. As a result, there is no practical or financial incentive for holders of the Warrants to exercise the Warrants via cash exercise or cashless exercise and we do not expect to receive any proceeds from the exercise of the Warrants.
Fundamental Transactions
Upon a Fundamental Transaction, a holder exercising a Warrant will be entitled to receive the same kind and amount of securities, cash or other property that the holder would have received if it had exercised the Warrant and held the underlying Class A Ordinary Shares immediately before the Fundamental Transaction. The exercise price will be appropriately adjusted to apply to such alternative consideration. If shareholders are given any choice as to the consideration to be received, holders of the Warrants will be given the same choice. We will cause any successor entity in a fundamental transaction in which we are not the survivor to assume our obligations under the Warrants and, at the holder’s option, deliver a security substantially similar to the Warrants that preserves its economic value. Additionally, at the option of holders of the Warrants, exercisable within 30 days after the fundamental transaction (or announcement date, if later), we or any successor entity shall purchase the unexercised portion of the Warrants for cash equal to its Black Scholes value (as provided in the Warrants). However, if such fundamental transaction is not within our control (including not approved by our Board), holders will only be entitled to receive the same type of consideration that is being offered to shareholders, at the Black Scholes value of the unexercised portion of the Warrants.
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Transferability
Subject to applicable laws, a Warrant may be transferred at the option of the holder upon surrender of the Warrant to us together with the appropriate instruments of transfer.
Trading Market
There is no established public trading market for the Warrants, and we do not intend to list the Warrants on any national securities exchange or trading system. Without a trading market, the liquidity of the Warrants will be limited. The Class A Ordinary Shares issuable upon exercise of the Warrants are currently listed on the Nasdaq Capital Market.
No Rights as a Shareholder
Except as otherwise provided in the Warrants, holders of the Warrants will not be entitled to voting rights, dividends or any other rights as shareholders of the Company before exercising their Warrants.
Waivers and Adjustments
Subject to certain exceptions, any terms of the Warrants may be amended or waived with our written consent and the written consent of the holder.
Warrant Certificate
The Warrants will be issued in certificated form.
The Pre-Funded Warrants offered hereby will be issued in the form filed as an exhibit to the registration statement of which this prospectus is a part and the following summary is not complete and is subject to and qualified in its entirety by reference to the form of Pre-Funded Warrant. Prospective investors should carefully review the form of the Pre-Funded Warrant for a complete description of the terms and conditions applicable to the Pre-Funded Warrant.
Pre-Funded Warrants
Exercise Price
The exercise price per Class A Ordinary Share purchasable upon exercise of the Pre-Funded Warrant is $0.0001 per share. The exercise price and number of Class A Ordinary Shares issuable upon exercise are subject to appropriate adjustment in the event of share dividends, share splits, share combinations, reorganizations or similar events affecting our Class A Ordinary Shares.
Exercisability
Each Pre-Funded Warrant is exercisable at the option of the holder at any time on or after the issuance date and will not expire. Each Pre-Funded Warrant will be exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full of the exercise price in immediately available funds for the number of Class A Ordinary Shares issuable upon such exercise (except in the case of a cashless exercise as discussed below).
A holder may not exercise any portion of the Pre-Funded Warrant to the extent that the holder (together with its affiliates) would beneficially own more than 4.99% (or, at the election of the holder, 9.99%) of the outstanding Class A Ordinary Shares immediately after exercise. However, upon notice from the holder to us, the holder may decrease or increase the holder’s beneficial ownership limitation, which may not exceed 9.99% of the number of outstanding Class A Ordinary Shares immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the Pre-Funded Warrants, provided that any increase in the beneficial ownership limitation will not take effect until 61 days following notice to us.
Cashless Exercise
If and only if at the time of any exercise of the Pre-Funded Warrant, there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Class A Ordinary Shares underlying the Pre-Funded Warrants to the holder, in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the number of Class A Ordinary Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where (A) = trading price determined in accordance with the Pre-Funded Warrants; (B) = the exercise price of the Pre-Funded Warrants; and (X) = the number of pre-funded warrant shares that would be issuable upon exercise of such Pre-Funded Warrants by means of a cash exercise rather than a cashless exercise.
Fundamental Transactions
Upon a Fundamental Transaction, a holder exercising a Pre-Funded Warrant will be entitled to receive the same kind and amount of securities, cash or other property that the holder would have received if it had exercised the Pre-Funded Warrant and held the underlying Class A Ordinary Shares immediately before the Fundamental Transaction. The exercise price will be appropriately adjusted to apply to such alternative consideration. If shareholders are given any choice as to the consideration to be received, holders of the Pre-Funded Warrants will be given the same choice. We will cause any successor entity in a fundamental transaction in which we are not the survivor to assume our obligations under the Pre-Funded Warrants.
Transferability
Subject to applicable laws, a Pre-Funded Warrant may be transferred at the option of the holder upon surrender of the Pre-Funded Warrant to us together with the appropriate instruments of transfer.
Trading Market
There is no established public trading market for the Pre-Funded Warrants, and we do not intend to list the Pre-Funded Warrants on any national securities exchange or trading system. Without a trading market, the liquidity of the Pre-Funded Warrants will be limited. The Class A Ordinary Shares issuable upon exercise of the Pre-Funded Warrants are currently listed on the Nasdaq Capital Market.
No Rights as a Shareholder
Except as otherwise provided in the Pre-Funded Warrants, holders of the Pre-Funded Warrants will not be entitled to voting rights, dividends or any other rights as shareholders of the Company before exercising their Pre-Funded Warrants.
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Pursuant to a placement agency agreement, we engaged Prime Number Capital, LLC (the “placement agent”) to act as our exclusive placement agent on a best-efforts basis in connection with this offering. The placement agent is not purchasing or selling any of the securities offered by this prospectus and is not required to arrange for the purchase or sale of any specific number or dollar amount of securities, other than to use its best efforts to arrange for the sale of such securities by us. The terms of this offering are subject to market conditions and negotiations between us, the placement agent, and prospective investors. The placement agency agreement does not give rise to any commitment by the placement agent to purchase any of our securities, and the placement agent will have no authority to bind us by virtue of the placement agency agreement. Further, the placement agent does not guarantee that it will be able to raise new capital in any prospective offering. The placement agent may engage sub-agents or selected dealers to assist with this offering.
We expect to enter into a securities purchase agreement (“Securities Purchase Agreement”) directly with each investor in connection with this offering, and we may not sell the entire amount, or any amount, of securities offered pursuant to this prospectus. The form of securities purchase agreement will be included as an exhibit to the registration statement of which this prospectus is a part, as applicable.
We will deliver the Units offered hereby to the investors upon closing and receipt of investor funds for the purchase of the Units offered pursuant to this prospectus. There is no arrangement for funds to be received in escrow, trust or similar arrangement. We intend to complete the closing of this offering in accordance with the terms agreed between the Company and the investors.
Fees and Expenses
We have agreed to pay the placement agent a cash placement fee equal to five percent (5.0%) of the aggregate offering price of the securities sold in this offering. We have also agreed to reimburse the placement agent for certain travel, due diligence, legal and related expenses incurred in connection with this offering, up to an aggregate amount of US$80,000.
We estimate that the total commission and expenses payable by us in connection with this offering will be approximately US$330,000, which includes the placement agent’s commission, reimbursement of the placement agent’s offering-related expenses, and other estimated offering expenses, including legal, accounting, printing and registration-related fees and expenses.
Right of First Refusal
For a period of six (6) months following the closing date of this offering, the placement agent shall have an irrevocable right of first refusal to act as lead book-running manager, lead placement agent or lead financial advisor, as applicable, with respect to any public or private offering of equity, equity-linked or debt securities, or any other financing or capital-raising transaction by the Company or any of its subsidiaries, provided that in no event shall this right of first refusal have a duration of more than three (3) years from the commencement of sales of this offering or the termination date of the placement agent’s engagement, in accordance with FINRA Rule 5110(g)(6)(A). The Company may terminate the placement agent’s engagement for cause, including the placement agent’s material failure to provide the best-efforts placement agent services contemplated by the engagement agreement. If the Company terminates the engagement for cause, it will have no obligation to pay any termination fee or to provide or honor the right of first refusal, in accordance with FINRA Rule 5110(g)(5)(B).
Lock-Up Agreements
In connection with this offering, each of the Company’s officers, directors, shareholders holding 10% or more of the Company’s outstanding shares, and certain shareholders holding less than 10% of the Company’s outstanding shares have agreed that, without the prior written consent of the Placement Agent, they will not, during the 180-day period following the closing date of this offering, directly or indirectly offer, issue, sell, contract to sell, encumber, grant any option to purchase, or otherwise dispose of any securities of the Company, subject to certain exceptions.
In addition, we have agreed, subject to certain exceptions, that for a period of 90 days following the closing of this offering, we will not, without the prior written consent of the Placement Agent, directly or indirectly offer, sell, or otherwise transfer or dispose of any shares of capital stock of the Company or any securities convertible into, or exercisable or exchangeable for, shares of capital stock of the Company, or file or cause to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company or any securities convertible into, or exercisable or exchangeable for, shares of capital stock of the Company.
Listing
Our Class A Ordinary Shares are listed on The Nasdaq Capital Market under the symbol “DKI.” There is no established public trading market for the Pre-Funded Warrants or Warrants, and we do not intend to list the Pre-Funded Warrants or Warrants on The Nasdaq Capital Market or any other securities exchange or trading market. Without an active trading market, the liquidity of the Pre-Funded Warrants and Warrants will be limited. We are also registering the Class A Ordinary Shares issuable upon exercise of the Pre-Funded Warrants and Warrants and anticipate that such Class A Ordinary Shares will trade on The Nasdaq Capital Market.
Regulation M
The placement agent may be deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act, and any fees received by the placement agent might be deemed to be underwriting commissions under the Securities Act. The placement agent will be required to comply with the requirements of the Securities Act and the Exchange Act, including, without limitation, Rule 10b-5 and Regulation M under the Exchange Act. These rules and regulations may limit the timing of purchases and sales of the securities by the placement agent. Under these rules and regulations, the placement agent may not (i) engage in any stabilization activity in connection with our securities; or (ii) bid for or purchase any of our securities or attempt to induce any person to purchase any of our securities, other than as permitted under the Exchange Act, until it has completed its participation in the distribution.
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Other Relationships
From time to time, the placement agent may provide various advisory, investment banking and other services to us in the ordinary course of business, for which it may receive customary fees and commissions. However, except as disclosed in this prospectus, we have no present arrangements with the placement agent for any services.
We have agreed to indemnify the placement agent against certain liabilities, including liabilities under the Securities Act. If we are unable to provide this indemnification, we will contribute to payments that the placement agent may be required to make for these liabilities.
Selling Restrictions
No action may be taken in any jurisdiction other than the United States that would permit a public offering of the securities or the possession, circulation or distribution of this prospectus in any jurisdiction where action for that purpose is required. The Class A Ordinary Shares, Pre-Funded Warrants and Warrants offered by this prospectus may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered by this prospectus in any jurisdiction in which such an offer or solicitation is unlawful.
Notice to Prospective Investors in the Cayman Islands
This prospectus does not constitute a public offer of the Class A Ordinary Shares, Pre-Funded Warrants or Warrants, whether by way of sale or subscription, in the Cayman Islands. The Class A Ordinary Shares, Pre-Funded Warrants and Warrants have not been offered or sold, and will not be offered or sold, directly or indirectly, in the Cayman Islands.
Notice to Prospective Investors in Hong Kong
The contents of this prospectus have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice. Our securities may not be offered or sold in Hong Kong by means of any document other than (i) in circumstances which do not constitute an offer to the public within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32, Laws of Hong Kong), or (ii) to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, (iii) in circumstances which constitute an offer specified in Part 1 of the Seventeenth Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32, Laws of Hong Kong) as read with the other Parts of that Schedule, or (iv) in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32, Laws of Hong Kong), and no advertisement, invitation or document relating to the Ordinary Shares may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the laws of Hong Kong) other than with respect to the securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) and any rules made thereunder, unless the offer of the Ordinary Shares constitutes an offer specified in Part 1 of the Seventeenth Schedule to the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap.32, Laws of Hong Kong) as read with the other Parts of that Schedule.
Notice to Prospective Investors in the People’s Republic of China
This prospectus may not be circulated or distributed in the PRC, and the securities may not be offered or sold, and will not be offered or sold, to any person for re-offering or resale directly or indirectly to any resident of the PRC, except pursuant to applicable laws, rules and regulations of the PRC. For the purpose of this paragraph only, the PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau.
Notice to Prospective Investors in Taiwan, the Republic of China
The securities have not been and will not be registered with the Financial Supervisory Commission of Taiwan, the Republic of China, pursuant to relevant securities laws and regulations and may not be offered or sold in Taiwan through a public offering or in any manner which would constitute an offer within the meaning of the Securities and Exchange Act of Taiwan or would otherwise require registration with or the approval of the Financial Supervisory Commission of Taiwan.
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Loeb & Loeb LLP is acting as counsel to our Company regarding U.S. securities law matters. The validity of the Class A Ordinary Shares offered hereby will be passed upon for us by Appleby. Ye & Associates, P.C. is acting as counsel to the placement agent with respect to certain legal matters as to United States federal securities law in connection with this offering.
The consolidated financial statements as of September 30, 2025 and 2024 and for each of the years then ended included in this prospectus have been so included in reliance on the report of Enrome LLP, our principal external auditor, given on the authority of such firm as experts in accounting and auditing.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
We are allowed to incorporate by reference the information we file with the SEC, which means that we can disclose important information to you by referring to those documents. The information incorporated by reference is considered to be part of this prospectus. We incorporate by reference in this prospectus the documents listed below:
| ● | our latest annual report on Form 20-F for the year ended September 30, 2025, filed with the SEC on January 30, 2026; | |
| ● | the description of our Ordinary Shares contained in Exhibit 2.1 to the 2025 Annual Report, filed with the SEC on January 30, 2026, including any amendments or reports filed for the purpose of updating such description, and any amendment or report filed for the purpose of updating such description; and | |
| ● | our current reports on Form 6-K, furnished to the SEC on November 21, 2025, January 27, 2026 (as amended on February 10, 2026), February 13, 2026, February 17, 2026, April 8, 2026, April 9, 2026, April 24, 2026, May 28, 2026, May 29, 2026, July 6, 2026, July 21, 2026, August 11, 2026, August 13, 2026, September 4, 2026 and September 18, 2026. |
The information relating to us contained in this prospectus does not purport to be comprehensive and should be read together with the information contained in the documents incorporated or deemed to be incorporated by reference in this prospectus.
As you read the above documents, you may find inconsistencies in information from one document to another. If you find inconsistencies between the documents and this prospectus, you should rely on the statements made in the most recent document. All information appearing in this prospectus is qualified in its entirety by the information and financial statements, including the notes thereto, contained in the documents incorporated by reference herein.
Unless expressly incorporated by reference, nothing in this prospectus shall be deemed to incorporate by reference information furnished to, but not filed with, the SEC. Copies of all documents incorporated by reference in this prospectus, other than exhibits to those documents unless such exhibits are specially incorporated by reference in this prospectus, will be provided at no cost to each person, including any beneficial owner, who receives a copy of this prospectus on the written or oral request of that person made to:
DARKIRIS INC.
6/F, Cheong Sun Tower
No. 118 Wing Lok Street
Sheung Wan, Hong Kong
Tel: +852 6670 1632
You should rely only on the information contained or incorporated by reference in this prospectus. We have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus, or such earlier date, that is indicated in this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We have filed a registration statement, including relevant exhibits, with the SEC on Form F-1 under the Securities Act with respect to the Ordinary Shares to be sold in this Offering. This prospectus, which constitutes a part of the registration statement on Form F-1, does not contain all of the information contained in the registration statement. You should read our registration statements and their exhibits and schedules for further information with respect to us and our Ordinary Shares.
Upon the effectiveness of the registration statement on Form F-1 to which this prospectus is a part, we have become subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we are required to file reports, including annual reports on Form 20-F, and other information with the SEC. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC.
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Up to 4,166,666 Units, each consisting of one Class A Ordinary Share and one Warrant to purchase one Class A Ordinary Share
Up to 4,166,666 Pre-Funded Units, each consisting of one Pre-Funded Warrant to purchase one Class A Ordinary Share and one Warrant to purchase one Class A Ordinary Share
Up to 4,166,666 Class A Ordinary Shares included in the Units
Up to 4,166,666 Pre-Funded Warrants to Purchase Class A Ordinary Shares included in the Pre-Funded Units
Up to 4,166,666 Warrants to Purchase Class A Ordinary Shares
52,380,944 Class A Ordinary Shares Issuable upon Exercise of the Warrants to Purchase Class A Ordinary Shares at a Zero Exercise Price
Up to 4,166,666 Class A Ordinary Shares Issuable upon Exercise of the Pre-Funded Warrants
DARKIRIS INC.
Part II — Information Not Required in the Prospectus
Item 6. Indemnification of Directors and Officers and Limitation of Liability.
Cayman 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 provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing a crime. Our second amended and restated memorandum and articles of association provide that to the extent permitted by law, we shall indemnify each existing or former director (including alternate director), secretary and other officer of us (including an investment adviser or an administrator or liquidator) and their personal representatives against:
| ● | all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by the existing or former director (including alternate director), secretary or officer in or about the conduct of our business or affairs or in the execution or discharge of the existing or former director’s (including alternate director’s), secretary’s or officer’s duties, powers, authorities or discretions; and |
| ● | without limitation to paragraph (a), all costs, expenses, losses or liabilities incurred by the existing or former director (including alternate director), secretary or officer in defending (whether successfully or otherwise) any civil, criminal, administrative or investigative proceedings (whether threatened, pending or completed) concerning us or our affairs in any court or tribunal, whether in the Cayman Islands or elsewhere. |
No such existing or former director (including alternate director), secretary or officer, however, shall be indemnified in respect of any matter arising out of his own dishonesty.
To the extent permitted by the Companies Act, we may make a payment, or agree to make a payment, whether by way of advance, loan or otherwise, for any legal costs incurred by an existing or former director (including alternate director), secretary or officer of the Company in respect of any matter identified in above on condition that the director (including alternate director), secretary or officer must repay the amount paid by us to the extent that we are ultimately found not liable to indemnify the director (including alternate director), secretary or officer for those legal costs.
This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers, or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Item 7. Recent Sales of Unregistered Securities.
During the past three years, we have issued and sold the securities described below without registering the securities under the Securities Act. None of these transactions involved any underwriters’ underwriting discounts or commissions, or any public offering.
On May 31, 2024, the Company issued one ordinary share to Harneys Fiduciary (Cayman) Limited, which was transferred to Cove International Capital Ltd. On May 31, 2024, as a part of offshore reorganization, the Company issued 49,999 Ordinary Shares to below shareholders in exchange (the “Shares Exchange”) for their shares owned in Xiqi, which in turned owned Quantum and Turing. The shares were issued in reliance upon exemptions from registration under Section 4(a)(2) of the Securities Act. No underwriters were involved in these issuances of ordinary shares.
| Name | Number of Ordinary Shares | |||
| Vertex International Capital Ltd | 5,000 | |||
| XideFu International Capital Ltd | 3,850 | |||
| Grace Fang International Holdings Ltd | 3,805 | |||
| NewDawn International Capital Ltd | 3,720 | |||
| Topbest International Capital Ltd | 3,305 | |||
| HouKu holdings Ltd | 3,045 | |||
| Reverence for Nature International Holdings Ltd | 2,100 | |||
| Egret Capital Holdings Ltd | 2,000 | |||
| First Chance Int Capital Ltd | 1,900 | |||
| Source Capital Holdings Inc | 1,500 | |||
| Storm Effect Inc | 1,500 | |||
| Cove International Capital Ltd | 1,244 | |||
| RongStar Holdings Ltd | 17,030 | |||
| Total | 49,999 | |||
On February 27, 2025, the Company resolved a special resolution that the Company re-designated and re-classifies its authorized share capital into 450,000,000 Class A Ordinary Shares of par value of US$0.0001 each and 50,000,000 Class B Ordinary Shares of par value of US$0.0001 each. The currently issued 50,000 ordinary shares of par value of US$0.0001 each in the Company be and are re-designated and re-classified into such number of Class A ordinary shares of par value US$0.0001 each with 1 vote per share or such number of Class B ordinary shares of par value US$0.0001 each with 20 votes per share, in each case on a one for one basis, as follows:
| Name of the Shareholders | Number and Class of Existing Shares Held | Number of Shares Held Giving Effect to Share Re-designation and Re-classification | ||||
| Vertex International Capital Ltd | 5,000 | 5,000 Class A Ordinary Shares | ||||
| XideFu International Capital Ltd | 3,850 | 3,850 Class A Ordinary Shares | ||||
| Grace Fang International Holdings Ltd | 3,805 | 3,805 Class A Ordinary Shares | ||||
| NewDawn International Capital Ltd | 3,720 | 3,720 Class A Ordinary Shares | ||||
| Topbest International Capital Ltd | 3,305 | 3,305 Class A Ordinary Shares | ||||
| HouKu holdings Ltd | 3,045 | 3,045 Class A Ordinary Shares | ||||
| Reverence for Nature International Holdings Ltd | 2,100 | 2,100 Class A Ordinary Shares | ||||
| Egret Capital Holdings Ltd | 2,000 | 2,000 Class A Ordinary Shares | ||||
| First Chance Int Capital Ltd | 1,900 | 1,900 Class A Ordinary Shares | ||||
| Source Capital Holdings Inc | 1,500 | 1,500 Class A Ordinary Shares | ||||
| Storm Effect Inc | 1,500 | 1,500 Class A Ordinary Shares | ||||
| Cove International Capital Ltd | 1,244 | 1,244 Class A Ordinary Shares | ||||
| RongStar Holdings Ltd | 17,030 | 17,030 Class B Ordinary Shares | ||||
| II-1 |
In June 2025, the Company issued additional 10,517,430 Class A Ordinary Shares and 5,432,570 Class B Ordinary Shares to our shareholders on a pro-rata basis, resulting in an aggregate of 10,550,400 Class A Ordinary Shares and 5,449,600 Class B Ordinary Shares issued and outstanding.
On April 7, 2026, the Company entered into share purchase agreements with 11 investors pursuant to which the Company agreed to sell an aggregate of 9,400,000 Class A Ordinary Shares and 1,428,571 Class B Ordinary Shares at $0.35 per share (the “2026 Private Placement”). The 1,428,571 Class B Ordinary Shares were purchased by Hong Zhifang, the Company’s Chief Executive Officer, Chairman of the board of directors and director. The closing of the 2026 Private Placement occurred on April 15, 2026.
On May 11, the Company effected a share consolidation of its Class A ordinary shares of par value US$0.0001 each and Class B ordinary shares of par value US$0.0001 each at a ratio of 1-for-16. As a result of the share consolidation, every 16 shares (or part thereof) will be combined into one (1) share, with fractional shares rounded up to the next whole share.
We believe that the offers, sales and issuances of the securities described in the preceding paragraphs were exempt from registration either (a) under Section 4(a)(2) of the Securities Act and the rules and regulations promulgated thereunder, in that the transactions were between an issuer and sophisticated investors or members of its senior executive management and did not involve any public offering within the meaning of Section 4(a)(2), (b) under Regulation S promulgated under the Securities Act in that offers, sales and issuances were not made to persons in the United States and no directed selling efforts were made in the United States, or (c) under Rule 701 promulgated under the Securities Act in that the transactions were underwritten compensatory benefit plans or written compensatory contracts.
Item 8. Exhibits.
(a) Exhibits
See Exhibit Index of this registration statement:
EXHIBIT INDEX
* Previously filed
** To be filed by amendment
| II-2 |
ITEM 9. UNDERTAKINGS.
(1) To file, during any period in which offers or sales 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;
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 SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement;
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, 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.
(5) That, for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
(6) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus 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.
(7) That, for the purpose of determining liability under the Securities Act to any purchaser:
Each prospectus filed by the registrant 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.
| II-3 |
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-1 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the Hong Kong, China, on September 30, 2026.
| DARKIRIS INC. | ||
| By: | /s/ Hong Zhifang | |
| Name: | Hong Zhifang | |
| Title: | Director, Chief Executive Officer and Chairman of the Board | |
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Hong Zhifang, his true and lawful agent, proxy and attorney-in-fact, with full power of substitution and resubstitution, for and in his or name, place and stead, in any and all capacities, to (1) act on, sign and file with the Securities and Exchange Commission any and all amendments (including post-effective amendments) to this Registration Statement together with all schedules and exhibits thereto and any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, together with all schedules and exhibits thereto, (2) act on, sign and file such certificates, instruments, agreements and other documents as may be necessary or appropriate in connection therewith, (3) act on and file any supplement to any prospectus included in this Registration Statement or any such amendment or any subsequent registration statement filed pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and (4) take any and all actions which may be necessary or appropriate to be done, as fully for all intents and purposes as he might or could do in person, hereby approving, ratifying and confirming all that such agent, proxy and attorney-in-fact or any of his substitutes may lawfully do or cause to be done by virtue thereof.
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 | Title | Date | ||
| /s/ Hong Zhifang | Chief Executive Officer and Director, Chairman of the Board of Directors, Director | September 30, 2026 | ||
| Hong Zhifang | ||||
| /s/ Xu Jiang | Chief Financial Officer, Director | September 30, 2026 | ||
| Xu Jiang | ||||
| /s/ Ng Chee Jiong | Independent Director | September 30, 2026 | ||
| Ng Chee Jiong | ||||
| /s/ Law Chee Hui | Independent Director | September 30, 2026 | ||
| Law Chee Hui | ||||
| /s/ Li Feng Lin | Independent Director | September 30, 2026 | ||
| Li Feng Lin |
| II-4 |
Authorized U.S. Representative
Pursuant to the Securities Act of 1933, as amended, the undersigned, the duly authorized representative in the United States of DarkIris Inc., has signed this registration statement in New York, on September 30, 2026.
Authorized U.S. Representative Cogency Global Inc. | ||
| By: | /s/ Collen A. De Vries | |
| Name: | Collen A. De Vries | |
| Title: | Senior Vice-President on behalf of Cogency Global Inc. | |
| II-5 |
Exhibit 1.1
PLACEMENT AGENCY AGREEMENT
Prime Number Capital, LLC
27F 12E 49th Street
New York, NY 10017
[●], 2026
Ladies and Gentlemen:
This letter (this “Agreement”) constitutes the agreement between DarkIris Inc. (the “Company,” “we” or “us”) and Prime Number Capital, LLC (the “Placement Agent”), pursuant to which the Placement Agent shall serve as the exclusive placement agent for the Company, on a best-efforts basis, in connection with the proposed offer and sale by the Company of up to [●] units (the “Units”), each consisting of one Class A Ordinary Share, par value $0.0016 per share (the “Class A Ordinary Shares”), and one warrant to purchase one Class A Ordinary Share (each, a “Warrant,” and collectively with the Units, the Class A Ordinary Shares included in the Units, and the Class A Ordinary Shares issuable upon exercise of the Warrants, the “Securities”). The Company expressly acknowledges and agrees that the Placement Agent’s obligations hereunder are on a best-efforts basis only and that the execution of this Agreement does not constitute a commitment by the Placement Agent to purchase the Securities or ensure the successful placement of the Securities or any portion thereof.
| 1. | Appointment as Exclusive Placement Agent. |
On the basis of the representations, warranties, covenants and agreements of the Company herein contained, and subject to all the terms and conditions of this Agreement, the Company hereby appoints the Placement Agent as its exclusive placement agent in connection with the offering of the Securities (“Offering”) to be offered and sold by the Company pursuant to a registration statement filed under the Securities Act of 1933, as amended (the “Securities Act”), on Form F-1 (File No. 333- [●]), and the Placement Agent agrees to act as the Company’s exclusive placement agent. Pursuant to this appointment, the Placement Agent will use its best efforts to arrange for the sale of the Securities by the Company. The Placement Agent is not purchasing or selling any of the Securities offered by the prospectus and is not required to arrange for the purchase or sale of any specific number or dollar amount of Securities. The Company acknowledges that under no circumstances will the Placement Agent be obligated to underwrite or purchase any Securities for its own account. The Placement Agent may engage sub-agents or selected dealers to assist with this Offering. The Placement Agent will solicit offers for the purchase of the Securities in the Offering at such times and in such amounts as the Placement Agent deems advisable. The Company shall have the sole right to accept offers to purchase Securities and may reject any such offer, in whole or in part. The Company and the Placement Agent shall negotiate the timing and terms of the Offering and acknowledge that the Offering and the provision of the services related to the Offering are subject to market conditions and the receipt of all required related clearances and approvals.
| 2. | Fees; Expenses; Other Arrangements. |
A. Placement Agent’s Fee. As compensation for services rendered, the Company shall pay to the Placement Agent in cash by wire transfer in immediately available funds to an account designated by the Placement Agent an amount equal to five percent (5.0%) of the aggregate gross proceeds raised in this Offering (the “Placement Fee”). The Placement Agent may deduct from the net proceeds of this Offering payable to the Company on the Closing Date the Placement Fee and reimbursable expenses set forth herein.
B. Offering Expenses. The Company will be responsible for and will pay all expenses relating to the Offering, including, without limitation, (a) all filing fees and expenses relating to the registration of the Securities with the Commission; (b) all FINRA filing fees; (c) all fees and expenses relating to the listing on the Nasdaq Capital Market (the “Exchange”); (d) the costs of all mailing and printing of the documents related to the Offering; (e) transfer and/or stamp taxes, if any, payable upon the transfer of Securities from the Company to Investors; (f) the fees and expenses of the Company’s accountants; (g) all the Placement Agent’s travel expenses and due diligence expenses; and (h) the legal fees of the Placement Agent’s counsel; provided that the aggregate amount of reimbursable expenses set forth in subsections (g)-(h) shall not exceed $80,000. The Placement Agent may deduct from the net proceeds of the Offering payable to the Company on the Closing Date the expenses set forth herein to be paid by the Company to the Placement Agent, provided, however, that in the event that the Offering is terminated, the Company agrees to reimburse the Placement Agent to the extent required by Section 5 hereof promptly after such termination. Notwithstanding the foregoing, if the Offering does not close for any reason, the Company’s reimbursement obligation shall be limited solely to the reimbursement of the Placement Agent’s legal counsel fees and due diligence expenses in the amount of $30,000, and the Company shall have no obligation to reimburse any other expenses.
C. Right of First Refusal. For a period of six (6) months following the Closing Date of this Offering, the Placement Agent shall have an irrevocable right of first refusal to act as lead book-running manager, lead placement agent or lead financial advisor, as applicable, with respect to at least eighty percent (80%) of the economics for any public or private offering of equity, equity-linked or debt securities, or any other financing or capital-raising transaction by the Company or any of its subsidiaries, subject to compliance with FINRA Rule 5110(g)(6); provided that in no event shall this right of first refusal extend beyond three (3) years from the commencement of sales of this Offering or the termination date of the engagement between the Company and the Placement Agent, as applicable.
D. The services provided by the Placement Agent hereunder are solely for the benefit of the Company and are not intended to confer any rights upon any persons or entities not a party hereto (including, without limitation, securityholders, employees or creditors of the Company) as against the Placement Agent or its directors, officers, agents and employees.
| 3. | Description of the Offering. |
The Securities to be offered directly to various investors (each, an “Investor” or “Purchaser” and, collectively, the “Investors” or the “Purchasers”) pursuant to a Securities Purchase Agreement between the Company and each Investor shall consist of up to [●] Units, with each Unit consisting of one Class A Ordinary Share and one Warrant. The Company is also registering up to [●] Class A Ordinary Shares issuable upon exercise of the Warrants at a zero exercise price in accordance with their terms, including upon exercise for cash at the applicable Exercise Price, by cashless exercise when available, or pursuant to the Zero Exercise Price Option set forth in the Warrants. The Units have no stand-alone rights and will not be certificated or issued as stand-alone securities. The Class A Ordinary Shares can each be purchased in this Offering only with the accompanying Warrants as part of the Units, but the component parts of the Units will be immediately separable and issued separately in this Offering.
| 4. | Delivery and Payment; Closing. |
The Company will deliver the Class A Ordinary Shares and Warrants included in the Units to the Investors upon closing and receipt of investor funds for the purchase of the Securities offered pursuant to the prospectus. There is no arrangement for funds to be received in escrow, trust or similar arrangement. The Company intends to complete one closing of this Offering, and the Offering will terminate upon the completion of a single closing. Settlement of the Securities purchased by an Investor shall be made as set forth in the Securities Purchase Agreement. On the Closing Date, the Securities to which the Closing relates shall be delivered through such means as the parties to the Securities Purchase Agreement may hereafter agree. The Securities shall be registered in such name or names and in such authorized denominations as set forth in the Securities Purchase Agreement. The term “Business Day” means any day other than a Saturday, a Sunday, a legal holiday or a day on which banking institutions are authorized or obligated by law to close in New York, New York.
| 5. | Term and Termination of Agreement. |
The term of this Agreement will commence upon the execution of this Agreement and will terminate upon the completion of the closing of the Offering or earlier termination of the engagement in accordance with this Agreement. The Company may terminate this Agreement for cause, which shall include the Placement Agent’s material failure to provide the placement agency services contemplated by this Agreement. If the Company exercises this right, it shall have no obligation to pay a termination fee or to provide the Placement Agent with the right of first refusal set forth in Section 2(C). Notwithstanding anything to the contrary contained herein, any provision in this Agreement concerning or relating to confidentiality, indemnification, contribution, advancement, the Company’s representations and warranties, the Company’s obligations to pay fees and reimburse expenses, and any other provisions that by their terms survive, will survive any expiration or termination of this Agreement.
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| 6. | Permitted Acts. |
Nothing in this Agreement shall be construed to limit the ability of the Placement Agent, its officers, directors, employees, agents, associated persons and any individual or entity “controlling,” “controlled by,” or “under common control” with the Placement Agent (as those terms are defined in Rule 405 under the Securities Act) to conduct its business including without limitation the ability to pursue, investigate, analyze, invest in, or engage in investment banking, financial advisory or any other business relationship with any individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
| 7. | Representations, Warranties and Covenants of the Company. |
As of the date and time of the execution of this Agreement, the Closing Date and the Initial Sale Time (as defined herein), the Company (i) makes such representations and warranties to the Placement Agent as the Company makes to the Investors pursuant to the Securities Purchase Agreement, and (ii) further represents, warrants and covenants to the Placement Agent, other than as disclosed in the Prospectus (as defined below) or in any of its filings with the Securities and Exchange Commission (the “Commission”) that are incorporated by reference into the Registration Statement (as defined below), that:
A. Registration Matters.
i. The Company has filed with the Commission a registration statement on Form F-1 (File No. 333-[●]) including a related prospectus, for the registration of Units, the Class A Ordinary Shares included in the Units, the Warrants and the Class A Ordinary Shares issuable upon exercise of the Warrants under the Securities Act and the rules and regulations thereunder (the “Securities Act Regulations”). The “Registration Statement,” as of any time, means such registration statement as amended by any post-effective amendments thereto at such time, including the exhibits and any schedules thereto at such time. The prospectus set forth in the Registration Statement in the form first used to confirm sales of the Securities is hereinafter referred to as the “Prospectus,” and the term “Preliminary Prospectus” means any preliminary form of the Prospectus specifically related to the Securities filed with the Commission by the Company with the consent of the Placement Agent.
ii. All references in this Agreement to financial statements and schedules and other information which is “contained,” “included” or “stated” (or other references of like import) in the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to include all such financial statements and schedules and other information incorporated or deemed incorporated by reference in the Registration Statement, such Preliminary Prospectus or the Prospectus, as the case may be, prior to the execution and delivery of this Agreement; and all references in this Agreement to amendments or supplements to the Registration Statement, any Preliminary Prospectus or the Prospectus shall be deemed to include the filing of any document under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder (the “Exchange Act Regulations”), incorporated or deemed to be incorporated by reference in the Registration Statement, such Preliminary Prospectus or the Prospectus, as the case may be, at or after the execution and delivery of this Agreement.
iii. The term “Disclosure Package” means (i) the Preliminary Prospectus, as most recently amended or supplemented immediately prior to the Initial Sale Time (as defined herein), and (ii) the Issuer Free Writing Prospectuses (as defined below), if any, identified in Schedule I hereto.
iv. The term “Issuer Free Writing Prospectus” means any issuer free writing prospectus, as defined in Rule 433 of the Securities Act Regulations. The term “Free Writing Prospectus” means any free writing prospectus, as defined in Rule 405 of the Securities Act Regulations.
v. Any Preliminary Prospectus when filed with the Commission, and the Registration Statement as of each effective date and as of the date hereof, complied or will comply, and the Prospectus and any further amendments or supplements to the Registration Statement, any Preliminary Prospectus or the Prospectus will, when they become effective or are filed with the Commission, as the case may be, comply, in all material respects, with the requirements of the Securities Act and the Securities Act Regulations; and the documents incorporated by reference in the Registration Statement, any Preliminary Prospectus or the Prospectus complied, and any further documents so incorporated will comply, when filed with the Commission, in all material respects to the requirements of the Exchange Act and Exchange Act Regulations.
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vi. The issuance by the Company of the Securities has been registered under the Securities Act. The Securities will be issued pursuant to the Registration Statement and will be freely transferable and freely tradable by each of the Investors without restriction, unless otherwise restricted by applicable law or regulation. The Company is eligible to use Form F-1 under the Securities Act.
B. Stock Exchange Listing. The Class A Ordinary Shares are listed on The Nasdaq Capital Market under the symbol “DKI.” There is no established public trading market for the Warrants, and the Company does not intend to list the Warrants on The Nasdaq Capital Market or any other securities exchange or trading market. The Company is also registering the Class A Ordinary Shares issuable upon exercise of the Warrants and anticipates that such Class A Ordinary Shares will trade on The Nasdaq Capital Market.
C. No Stop Orders, etc. Neither the Commission nor, to the Company’s knowledge, any state regulatory authority has issued any order preventing or suspending the use of the Registration Statement, any Preliminary Prospectus or the Prospectus or has instituted or, to the Company’s knowledge, threatened to institute, any proceedings with respect to such an order. The Company has complied with each request (if any) from the Commission for additional information.
D. Disclosures in Registration Statement.
i. Compliance with Securities Act and 10b-5 Representation.
(a) Each of the Registration Statement and any post-effective amendment thereto, at the time it became effective, complied in all material respects with the requirements of the Securities Act and the Securities Act Regulations. The Preliminary Prospectus and the Prospectus, at the time each was or will be filed with the Commission, complied or will comply in all material respects with the requirements of the Securities Act and the Securities Act Regulations. The Preliminary Prospectus delivered to the Placement Agent for use in connection with this Offering and the Prospectus was or will be identical to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(b) None of the Registration Statement, any amendment thereto, or the Preliminary Prospectus, as of [●] p.m. (Eastern time) on the date hereof (the “Initial Sale Time”), and at the Closing Date, contained, contains or will contain an untrue statement of a material fact or omitted, omits or will omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty shall not apply to statements made or statements omitted in reliance upon and in conformity with written information furnished to the Company with respect to the Placement Agent by the Placement Agent expressly for use in the Registration Statement or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of the Placement Agent consists solely of the following disclosure contained in the “Plan of Distribution” section of the Prospectus: (i) the name of the Placement Agent, and (ii) the information regarding its fees and expenses (the “Placement Agent’s Information”).
(c) The Disclosure Package, as of the Initial Sale Time and at the Closing Date, did not, does not and will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; and each Issuer Free Writing Prospectus does not conflict with the information contained in the Registration Statement, any Preliminary Prospectus, or the Prospectus, and each such Issuer Free Writing Prospectus, as supplemented by and taken together with the Preliminary Prospectus as of the Initial Sale Time, did not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to statements made or statements omitted in reliance upon and in conformity with written information furnished to the Company with respect to the Placement Agent by the Placement Agent expressly for use in the Registration Statement, the Preliminary Prospectus or the Prospectus or any amendment thereof or supplement thereto. The parties acknowledge and agree that such information provided by or on behalf of any Placement Agent consists solely of the Placement Agent’s Information; and
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(d) Neither the Prospectus nor any amendment or supplement thereto, as of its issue date, at the time of any filing with the Commission pursuant to Rule 424(b), or at the Closing Date, included, includes or will include an untrue statement of a material fact or omitted, omits or will omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to the Placement Agent’s Information.
ii. Disclosure of Agreements. The agreements and documents described in the Registration Statement, the Disclosure Package and the Prospectus conform in all material respects to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the Securities Act Regulations to be described in the Registration Statement, the Disclosure Package and the Prospectus or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Disclosure Package and the Prospectus, and (ii) is material to the Company’s business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefor may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the Company’s knowledge, any other party is in default thereunder and, to the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder, except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus. To the Company’s knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses, including, without limitation, those relating to environmental laws and regulations.
iii. Changes After Dates in Registration Statement.
(a) No Material Adverse Change. Since the respective dates as of which information is given in the Registration Statement, the Disclosure Package and the Prospectus, except as otherwise specifically stated therein: (i) there has been no material adverse change in the financial position or results of operations of the Company, nor any change or development that, singularly or in the aggregate, would involve a material adverse change, in or affecting the condition (financial or otherwise), results of operations, business, assets or prospects of the Company (a “Material Adverse Change”); (ii) there have been no material transactions entered into by the Company, other than as contemplated pursuant to this Agreement; and (iii) no officer or director of the Company has resigned from any position with the Company.
(b) Recent Securities Transactions, etc. Subsequent to the respective dates as of which information is given in the Registration Statement, the Disclosure Package and the Prospectus, and except as may otherwise be indicated or contemplated herein or disclosed in the Registration Statement, the Disclosure Package and the Prospectus, the Company has not: (i) issued any securities (other than (i) grants under any share compensation plan and (ii) Ordinary Shares issued upon the exercise or conversion of option, warrants or convertible securities described in the Registration Statement, the Disclosure Package and the Prospectus) or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.
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E. Transactions Affecting Disclosure to FINRA.
i. Finder’s Fees. There are no claims, payments, arrangements, agreements or understandings relating to the payment of a finder’s, consulting or origination fee by the Company or any executive officer or director of the Company with respect to the sale of the Securities hereunder or any other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any of its stockholders.
ii. Payments Within Twelve (12) Months. Except as disclosed in the Registration Statement, the Disclosure Package and the Prospectus, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder’s fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve (12) months prior to the date hereof, other than the payment to the Placement Agent as provided hereunder in connection with the Offering.
iii. Use of Proceeds. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.
iv. FINRA Affiliation. There is no (i) officer or director of the Company, (ii) to the Company’s knowledge, beneficial owner of 10% or more of any class of the Company’s securities or (iii) to the Company’s knowledge, beneficial owner of the Company’s unregistered equity securities which were acquired during the 180-day period immediately preceding the submission of the confidential Registration Statement that is an affiliate or associated person of a FINRA member participating in the Offering (as determined in accordance with the rules and regulations of FINRA).
F. Integration. Neither the Company, nor any of its affiliates, nor any person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause the Offering to be integrated with prior offerings by the Company for purposes of the Securities Act that would require the registration of any such securities under the Securities Act.
G. Restriction on Sales of Capital Stock. The Company, on behalf of itself and any successor entity, agrees that, for a period of 90 days following the Closing Date of this Offering, it will not, without the prior written consent of the Placement Agent, directly or indirectly offer, sell, or otherwise transfer or dispose of any shares of capital stock of the Company or any securities convertible into, or exercisable or exchangeable for, shares of capital stock of the Company, or file or cause to be filed any registration statement with the Commission relating to the offering of any shares of capital stock of the Company or any securities convertible into, or exercisable or exchangeable for, shares of capital stock of the Company.
H. Lock-Up Agreements. In connection with this Offering, each of Company’s officers, directors and certain holders of the Company’s share capital as set forth on Schedule II attached hereto (the “Restricted Holders”) shall deliver to the Placement Agent an executed lock-up agreement, mutually agreed upon by the Company and the Placement Agent and in the form attached as Exhibit A hereto (the “Lock-Up Agreement”). Pursuant to such lock-up agreements, such parties will agree, subject to customary exceptions, not to offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale of, or otherwise transfer or dispose of, directly or indirectly, any Class A Ordinary Shares or any securities convertible into, exercisable for, or exchangeable for Class A Ordinary Shares, for a period of 180 days following the Closing Date of this Offering.
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| 8. | Conditions of the Obligations of the Placement Agent. |
The obligations of the Placement Agent hereunder shall be subject to the accuracy of the representations and warranties on the part of the Company set forth in Section 7 hereof, in each case as of the date hereof and as of the Closing Date as though then made, to the timely performance by each of the Company of its covenants and other obligations hereunder on and as of such dates, and to each of the following additional conditions:
A. Regulatory Matters.
i. Effectiveness of Registration Statement; Rule 424 Information. The Registration Statement is effective on the date of this Agreement, and, on the Closing Date no stop order suspending the effectiveness of the Registration Statement or any post-effective amendment thereto has been issued under the Securities Act, no order preventing or suspending the use of any Preliminary Prospectus or the Prospectus has been issued and no proceedings for any of those purposes have been instituted or are pending or, to the Company’s knowledge, contemplated by the Commission. The Company has complied with each request (if any) from the Commission for additional information. All filings with the Commission required by Rule 424 under the Securities Act to have been filed by the Closing Date shall have been made within the applicable time period prescribed for such filing by Rule 424.
ii. FINRA Clearance. On or before the Closing Date, the Placement Agent shall have received clearance from FINRA as to the amount of compensation allowable or payable to the Placement Agent as described in the Registration Statement.
iii. Listing of Additional Shares. On or before the Closing Date, the Company shall have filed a notice with the Exchange with respect to the Company’s additional listing of the securities sold in the Offering.
B. Company Counsel Matters. On the Closing Date, the Placement Agent shall have received the favorable opinion and negative assurance letter of Loeb & Loeb LLP, U.S. counsel for the Company; Appleby, Cayman Islands counsel for the Company, or of other counsels reasonably satisfactory to the Placement Agent, in each case dated the Closing Date and addressed to the Placement Agent, and in each case substantially in form and substance reasonably satisfactory to the Placement Agent.
C. Intentionally deleted.
D. Officers’ Certificate. On the Closing Date, the Placement Agent shall have received a certificate of the chief executive officer and chief financial officer of the Company, dated the Closing Date, to the effect that, (i) such officers have carefully examined the Registration Statement, the Disclosure Package, any Issuer Free Writing Prospectus and the Prospectus and, in their opinion, the Registration Statement and each amendment thereto, as of the Initial Sale Time and through the Closing Date did not include any untrue statement of a material fact and did not omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Disclosure Package, as of the Initial Sale Time through the Closing Date, any Issuer Free Writing Prospectus as of its date and as of the Closing Date, the Prospectus and each amendment or supplement thereto, as of the respective date thereof and as of the Closing Date, did not include any untrue statement of a material fact and did not omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances in which they were made, not misleading; and (ii) as of the Closing Date the representations and warranties of the Company contained herein and in the Securities Purchase Agreement were and are accurate in all material respects, and that the obligations to be performed by the Company hereunder have been fully performed in all material respects.
E. Secretary’s Certificate. On the Closing Date, the Placement Agent shall have received from the Company a certificate of the corporate secretary of the Company, dated the Closing Date, certifying to the organizational documents of the Company, good standing in the jurisdiction of formation of the Company and board resolutions authorizing the Offering of the Securities.
F. Intentionally deleted.
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G. No Material Changes. Prior to and on the Closing Date: (i) there shall have been no Material Adverse Change or development involving a prospective Material Adverse Change in the condition or prospects or the business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Registration Statement, the Disclosure Package and the Prospectus; (ii) no action, suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any affiliates of the Company before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding may materially adversely affect the business, operations, prospects or financial condition or income of the Company, except as set forth in the Registration Statement, the Disclosure Package and the Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission; and (iv) the Registration Statement, the Disclosure Package and the Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the Securities Act Regulations and shall conform in all material respects to the requirements of the Securities Act and the Securities Act Regulations, and neither the Registration Statement, the Disclosure Package nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.
H. Delivery of Agreements.
(i) Lock-Up Agreements. On or before the Closing Date, the Company shall have delivered to the Placement Agent executed copies of the Lock-Up Agreement from each of the Company’s officers, directors and the Restricted Holders.
I. Additional Documents. At the Closing Date, Placement Agent’s counsel shall have been furnished with such documents and opinions as it may require in order to evidence the accuracy of any of the representations or warranties, or the fulfillment of any of the conditions, herein contained; and all proceedings taken by the Company in connection with the issuance and sale of the Securities as herein contemplated shall be satisfactory in form and substance to the Placement Agent and Placement Agent’s counsel.
| 9. | Indemnification and Contribution; Procedures. |
A. Indemnification of the Placement Agent. The Company agrees to indemnify and hold harmless the Placement Agent, its affiliates and each person controlling such Placement Agent (within the meaning of Section 15 of the Securities Act), and the directors, officers, agents and employees of the Placement Agent, its affiliates and each such controlling person (the Placement Agent, and each such entity or person hereafter is referred to as an “Indemnified Person”) from and against any losses, claims, damages, judgments, assessments, costs and other liabilities (collectively, the “Liabilities”), and shall reimburse each Indemnified Person for all fees and expenses (including the reasonable fees and expenses of counsel for the Indemnified Persons, except as otherwise expressly provided in this Agreement) (collectively, the “Expenses”) and agrees to advance payment of such Expenses as they are incurred by an Indemnified Person in investigating, preparing, pursuing or defending any actions, whether or not any Indemnified Person is a party thereto, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in (i) the Registration Statement, the Disclosure Package, the Preliminary Prospectus, the Prospectus or in any Issuer Free Writing Prospectus (as from time to time each may be amended and supplemented); (ii) any materials or information provided to Investors by, or with the approval of, the Company in connection with the marketing of the Offering, including any “road show” or investor presentations made to Investors by the Company (whether in person or electronically); or (iii) any application or other document or written communication (in this Section 9, collectively called “application”) executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Securities under the securities laws thereof or filed with the Commission, any state securities commission or agency, any national securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon, and in conformity with, the Placement Agent’s information. The Company also agrees to reimburse each Indemnified Person for all Expenses as they are incurred in connection with such Indemnified Person’s enforcement of his or its rights under this Agreement. Each Indemnified Person is an intended third party beneficiary with the same rights to enforce the indemnification that each Indemnified Person would have if he was a party to this Agreement.
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B. Procedure. Upon receipt by an Indemnified Person of actual notice of an action against such Indemnified Person with respect to which indemnity may reasonably be expected to be sought under this Agreement, such Indemnified Person shall promptly notify the Company in writing; provided that failure by any Indemnified Person so to notify the Company shall not relieve the Company from any obligation or liability which the Company may have on account of this Section 9 or otherwise to such Indemnified Person, except to the extent (and only to the extent) that its ability to assume the defense of any such action (as contemplated in the next sentence) is actually impaired by such failure or delay. The Company shall, if requested by the Placement Agent, assume the defense of any such action (including the employment of counsel reasonably satisfactory to the Placement Agent). Any Indemnified Person shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless: (i) the Company has failed promptly to assume the defense and employ counsel for the benefit of the Placement Agent and the other Indemnified Persons or (ii) such Indemnified Person shall have been advised that in the opinion of counsel that there is an actual or potential conflict of interest that prevents (or makes it imprudent for) the counsel engaged by the Company for the purpose of representing the Indemnified Person, to represent both such Indemnified Person and any other person represented or proposed to be represented by such counsel, it being understood, however, that the Company shall not be liable for the expenses of more than one separate counsel (together with local counsel), representing the Placement Agent and all Indemnified Persons who are parties to such action. The Company shall not be liable for any settlement of any action effected without its written consent (which shall not be unreasonably withheld). In addition, the Company shall not, without the prior written consent of the Placement Agent, settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action in respect of which advancement, reimbursement, indemnification or contribution may be sought hereunder (whether or not such Indemnified Person is a party thereto) unless such settlement, compromise, consent or termination (i) includes an unconditional release of each Indemnified Person, acceptable to such Indemnified Party, from all Liabilities arising out of such action for which indemnification or contribution may be sought hereunder and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act, by or on behalf of any Indemnified Person. The advancement, reimbursement, indemnification and contribution obligations of the Company required hereby shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as every Liability and Expense is incurred and is due and payable, and in such amounts as fully satisfy each and every Liability and Expense as it is incurred (and in no event later than 30 days following the date of any invoice therefor).
C. Indemnification of the Company. The Placement Agent agrees to indemnify and hold harmless the Company, its directors, its officers who signed the Registration Statement and persons who control the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all Liabilities, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions made in the Registration Statement, any Preliminary Prospectus, the Disclosure Package or Prospectus or any amendment or supplement thereto, in reliance upon, and in strict conformity with, the Placement Agent’s Information. In case any action shall be brought against the Company or any other person so indemnified based on any Preliminary Prospectus, the Registration Statement, the Disclosure Package or Prospectus or any amendment or supplement thereto, and in respect of which indemnity may be sought against the Placement Agent, the Placement Agent shall have the rights and duties given to the Company, and the Company and each other person so indemnified shall have the rights and duties given to the Placement Agent by the provisions of Section 9.B. The Company agrees promptly to notify the Placement Agent of the commencement of any litigation or proceedings against the Company or any of its officers, directors or any person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, in connection with the issuance and sale of the Securities or in connection with the Registration Statement, the Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, provided, that failure by the Company so to notify the Placement Agent shall not relieve the Placement Agent from any obligation or liability which the Placement Agent may have on account of this Section 9.C. or otherwise to the Company, except to the extent the Placement Agent is materially prejudiced as a proximate result of such failure.
D. Contribution. In the event that a court of competent jurisdiction makes a finding that indemnity is unavailable to any indemnified person, then each indemnifying party shall contribute to the Liabilities and Expenses paid or payable by such indemnified person in such proportion as is appropriate to reflect (i) the relative benefits to the Company, on the one hand, and to the Placement Agent and any other Indemnified Person, on the other hand, of the matters contemplated by this Agreement or (ii) if the allocation provided by the immediately preceding clause is not permitted by applicable law, not only such relative benefits but also the relative fault of the Company, on the one hand, and the Placement Agent and any other Indemnified Person, on the other hand, in connection with the matters as to which such Liabilities or Expenses relate, as well as any other relevant equitable considerations; provided that in no event shall the Company contribute less than the amount necessary to ensure that all Indemnified Persons, in the aggregate, are not liable for any Liabilities and Expenses in excess of the amount of commissions actually received by the Placement Agent pursuant to this Agreement. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company on the one hand or the Placement Agent on the other and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Placement Agent agree that it would not be just and equitable if contributions pursuant to this subsection (D) were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to above in this subsection (D). For purposes of this paragraph, the relative benefits to the Company, on the one hand, and to the Placement Agent on the other hand, of the matters contemplated by this Agreement shall be deemed to be in the same proportion as: (a) the total value received by the Company in the Offering, whether or not such Offering is consummated, bears to (b) the commissions paid to the Placement Agent under this Agreement. Notwithstanding the above, no person guilty of fraudulent misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from a party who was not guilty of fraudulent misrepresentation.
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E. Limitation. The Company also agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with advice or services rendered or to be rendered by any Indemnified Person pursuant to this Agreement, the transactions contemplated thereby or any Indemnified Person’s actions or inactions in connection with any such advice, services or transactions, except to the extent that a court of competent jurisdiction has made a finding that Liabilities (and related Expenses) of the Company have resulted primarily from such Indemnified Person’s gross negligence or willful misconduct in connection with any such advice, actions, inactions or services.
F. Survival. The advancement, reimbursement, indemnity and contribution obligations set forth in this Section 9 shall remain in full force and effect regardless of any termination of, or the completion of any Indemnified Person’s services under or in connection with, this Agreement. Each Indemnified Person is an intended third-party beneficiary of this Section 9, and has the right to enforce the provisions of Section 9 as if he/she/it was a party to this Agreement.
| 10. | Limitation of Placement Agent Liability to the Company. |
The Placement Agent and the Company further agree that neither the Placement Agent nor any of its affiliates or any of its respective officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), employees or agents shall have any liability to the Company, its security holders or creditors, or any person asserting claims on behalf of or in the right of the Company (whether direct or indirect, in contract or tort, for an act of negligence or otherwise) for any losses, fees, damages, liabilities, costs, expenses or equitable relief arising out of or relating to this Agreement or the services rendered hereunder, except for losses, fees, damages, liabilities, costs or expenses that arise out of or are based on any action of or failure to act by the Placement Agent and that are finally judicially determined to have resulted solely from the gross negligence or willful misconduct of the Placement Agent.
| 11. | Limitation of Engagement to the Company. |
The Company acknowledges that the Placement Agent has been retained only by the Company, that the Placement Agent is providing services hereunder as an independent contractor (and not in any fiduciary or agency capacity) and that the Company’s engagement of the Placement Agent is not deemed to be on behalf of, and is not intended to confer rights upon, any shareholder, owner or partner of the Company or any other person not a party hereto as against the Placement Agent or any of its affiliates, or any of its respective officers, directors, controlling persons (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act), employees or agents. Unless otherwise expressly agreed in writing by the Placement Agent, no one other than the Company is authorized to rely upon any statement or conduct of the Placement Agent in connection with this Agreement. The Company acknowledges that any recommendation or advice, written or oral, given by the Placement Agent to the Company in connection with the Placement Agent’s engagement is intended solely for the benefit and use of the Company’s management and directors in considering a possible Offering, and any such recommendation or advice is not on behalf of, and shall not confer any rights or remedies upon, any other person or be used or relied upon for any other purpose. The Placement Agent shall not have the authority to make any commitment binding on the Company. The Company, in its sole discretion, shall have the right to reject any investor introduced to it by the Placement Agent. If any purchase agreement and/or related transaction documents are entered into between the Company and the investors in the Offering, the Placement Agent will be entitled to rely on the representations, warranties, agreements and covenants of the Company contained in any such purchase agreement and related transaction documents as if such representations, warranties, agreements and covenants were made directly to the Placement Agent by the Company.
| 12. | Amendments and Waivers. |
No supplement, modification or waiver of this Agreement shall be binding unless executed in writing by the party to be bound thereby. The failure of a party to exercise any right or remedy shall not be deemed or constitute a waiver of such right or remedy in the future. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provision hereof (regardless of whether similar), nor shall any such waiver be deemed or constitute a continuing waiver unless otherwise expressly provided.
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| 13. | Confidentiality. |
In the event of the consummation or public announcement of any Offering, the Placement Agent shall have the right to disclose its participation in such Offering, including, without limitation, the placement at its cost of “tombstone” advertisements in financial and other newspapers and journals. The Placement Agent agrees not to use any confidential information concerning the Company provided to the Placement Agent by the Company for any purposes other than those contemplated under this Agreement.
| 14. | Headings. |
The headings of the various sections of this Agreement have been inserted for convenience of reference only and will not be deemed to be part of this Agreement.
| 15. | Counterparts. |
This Agreement may be executed in one or more counterparts and, if executed in more than one counterpart, the executed counterparts shall each be deemed to be an original and all such counterparts shall together constitute one and the same instrument. The words “execution,” “signed” and “signature” and words of like import in this Agreement and all documents relating thereto, shall (to the extent permissible under governing documents) include images of manually executed signatures transmitted by facsimile or other electronic format (including, without limitation, “pdf,” “tif” or “jpg”) and other electronic signatures (including, without limitation, DocuSign and AdobeSign). The use of electronic signatures and electronic records (including, without limitation, any contract or other record created, generated, sent, communicated, received or stored by electronic means) shall be of the same legal effect, validity and enforceability as a manually executed signature or use of a paper-based record-keeping system to the fullest extent permitted by applicable law, including, without limitation, the Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act and any other applicable law.
| 16. | Severability. |
The invalidity, illegality or unenforceability of any section, paragraph or provision of this Agreement shall not affect the validity, legality or enforceability of any other section, paragraph or provision hereof. If any Section, paragraph or provision of this Agreement is for any reason determined to be invalid, illegal or unenforceable, there shall be deemed to be made such minor changes (and only such minor changes) as are necessary to make it valid and enforceable.
| 17. | Use of Information. |
The Company will furnish the Placement Agent such written information as the Placement Agent reasonably requests in connection with the performance of its services hereunder. The Company understands, acknowledges and agrees that, in performing its services hereunder, the Placement Agent will use and rely entirely upon such information as well as publicly available information regarding the Company and other potential parties to an Offering and that the Placement Agent does not assume responsibility for independent verification of the accuracy or completeness of any information, whether publicly available or otherwise furnished to it, concerning the Company or otherwise relevant to an Offering, including, without limitation, any financial information, forecasts or projections considered by the Placement Agent in connection with the provision of its services.
| 18. | Absence of Fiduciary Relationship. |
The Company acknowledges and agrees that: (a) the Placement Agent has been retained solely to act as Placement Agent in connection with the sale of the Securities and that no fiduciary, advisory or agency relationship between the Company and the Placement Agent has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether the Placement Agent has advised or is advising the Company on other matters; (b) the Purchase Price and other terms of the Securities set forth in this Agreement were established by the Company following discussions and arms-length negotiations with the Investors and the Company is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement; (c) it has been advised that the Placement Agent and its affiliates are engaged in a broad range of transactions that may involve interests that differ from those of the Company and that the Placement Agent has no obligation to disclose such interest and transactions to the Company by virtue of any fiduciary, advisory or agency relationship; and (d) it has been advised that the Placement Agent is acting, in respect of the transactions contemplated by this Agreement, solely for the benefit of the Placement Agent, and not on behalf of the Company and that the Placement Agent may have interests that differ from those of the Company. The Company waives to the full extent permitted by applicable law any claims it may have against the Placement Agent arising from an alleged breach of fiduciary duty in connection with the Offering.
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| 19. | Survival of Indemnities, Representations, Warranties, Etc. |
The respective indemnities, covenants, agreements, representations, warranties and other statements of the Company and the Placement Agent, as set forth in this Agreement or made by them respectively, pursuant to this Agreement, shall remain in full force and effect, regardless of any investigation made by or on behalf of the Placement Agent, the Company, the Purchasers or any person controlling any of them and shall survive delivery of and payment for the Securities. Notwithstanding any termination of this Agreement, including without limitation any termination pursuant to Section 5, the payment, reimbursement, indemnity, contribution, advancement and limitation of liability agreements contained in Sections 2, 9, 10, and 11, and the Company’s covenants, representations, and warranties set forth in this Agreement, shall not terminate and shall remain in full force and effect at all times. The indemnity and contribution provisions contained in Section 9 and the covenants, warranties and representations of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any of the Placement Agent, any person who controls either of the Placement Agent within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act or any affiliate of the Placement Agent, or by or on behalf of the Company, its directors or officers or any person who controls the Company within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, and (iii) the issuance and delivery of the Securities.
| 20. | Governing Law. |
This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be fully performed therein, without regard to its choice of law provisions. Any disputes that arise under this Agreement, even after the termination of this Agreement, will be heard only in the state or federal courts located in the City and County of New York, Borough of Manhattan. The parties hereto expressly agree to submit themselves to the jurisdiction of the foregoing courts in the City and County of New York, Borough of Manhattan. The parties hereto expressly waive any rights they may have to contest the jurisdiction, venue or authority of any court sitting in the City and County of New York, Borough of Manhattan.
| 21. | Notices. |
All communications hereunder shall be in writing and shall be mailed or hand delivered and confirmed to the parties hereto as follows:
If to the Company:
DarkIris Inc.
6/F, Cheong Sun Tower
No. 118 Wing Lok Street
Sheung Wan, Hong Kong
Attention: [●]
If to the Placement Agent:
Prime Number Capital, LLC
27F 12E 49th Street
New York, NY 10017
Attention: [●]
Any party hereto may change the address for receipt of communications by giving written notice to the others.
| 22. | Miscellaneous. |
This Agreement constitutes the entire agreement of the Placement Agent and the Company, and supersedes any prior agreements, with respect to the subject matter hereof. If any provision of this Agreement is determined to be invalid or unenforceable in any respect, such determination will not affect such provision in any other respect, and the remainder of this Agreement shall remain in full force and effect.
| 23. | Successors. |
This Agreement will inure to the benefit of and be binding upon the parties hereto, and to the benefit of the employees, officers and directors and controlling persons referred to in Section 9 hereof, and to their respective successors, and personal representatives, and, except as set forth in Section 9 of this Agreement, no other person will have any right or obligation hereunder.
[SIGNATURE PAGE TO FOLLOW]
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In acknowledgment that the foregoing correctly sets forth the understanding reached by the Placement Agent and the Company, and intending to be legally bound, please sign in the space provided below, whereupon this letter shall constitute a binding agreement as of the date executed.
| Very truly yours, | ||
| DARKIRIS INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
| Confirmed as of the date first written above: | ||
| PRIME NUMBER CAPITAL, LLC | ||
| By: | ||
| Name: | ||
| Title: | ||
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SCHEDULE I
Issuer General Use Free Writing Prospectuses
None.
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SCHEDULE II
Restricted Holders
| 15 |
Exhibit A
Lock-Up Agreement
_______________, 2026
Prime Number Capital, LLC
27F 12E 49th Street
New York, NY 10017
Ladies and Gentlemen:
The undersigned understands that Prime Number Capital, LLC (the “Placement Agent”) proposes to enter into a Placement Agency Agreement (the “Agreement”) with DARKIRIS INC. (the “Company”), providing for the public offering (the “Public Offering”) of securities of the Company, consisting of, among other securities, units, each consisting of one Class A Ordinary Share and one Warrant, and the Class A Ordinary Shares included in the units and issuable upon exercise of the Warrants. To induce the Placement Agent to continue its efforts in connection with the Public Offering, the undersigned hereby agrees that, without the prior written consent of the Placement Agent, the undersigned will not, and will cause all affiliates (as defined in Rule 144 promulgated under the Securities Act of 1933, as amended) of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned not to, during the period commencing on the closing date of the Public Offering and ending 90 days thereafter (the “Lock-Up Period”), (1) offer, pledge, sell, contract to sell, grant, lend, or otherwise transfer or dispose of, directly or indirectly, any Class A Ordinary Shares, any securities convertible into or exercisable or exchangeable for Class A Ordinary Shares, whether now owned or hereafter acquired by the undersigned or with respect to which the undersigned has or hereafter acquires the power of disposition (collectively, the “Lock-Up Securities”); (2) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of the Lock-Up Securities; (3) establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended and the rules and regulations of the Securities and Exchange Commission promulgated thereunder with respect to any Class A Ordinary Shares owned directly by the undersigned (including holding as a custodian) or with respect to which the undersigned has beneficial ownership within the rules and regulations of the Securities and Exchange Commission, whether any such transaction described in clause (1), (2) or (3) above is to be settled by delivery of Lock-Up Securities, in cash or otherwise; (4) make any demand for or exercise any right with respect to the registration of any Lock-Up Securities; or (5) publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement relating to any Lock-Up Securities.
The undersigned also agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of the undersigned’s Lock-Up Securities except in compliance with this lock-up agreement.
No provision in this agreement shall be deemed to restrict or prohibit the exercise, exchange or conversion by the undersigned of any securities exercisable or exchangeable for or convertible into Class A Ordinary Shares, as applicable; provided that the undersigned does not transfer the Class A Ordinary Shares acquired on such exercise, exchange or conversion during the Lock-Up Period, unless otherwise permitted pursuant to the terms of this lock-up agreement. In addition, no provision herein shall be deemed to restrict or prohibit the entry into or modification of a so-called “10b5-1” plan at any time (other than the entry into or modification of such a plan in such a manner as to cause the sale of any Lock-Up Securities within the Lock-Up Period); provided that no Lock-Up Securities may be sold within the Lock-Up Period pursuant to any such “10b5-1” plan. The undersigned understands that the Company and the Placement Agent are relying upon this lock-up agreement in proceeding toward consummation of the Public Offering. The undersigned further understands that this lock-up agreement is irrevocable and shall be binding upon the undersigned’s heirs, legal representatives, successors and assigns.
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This lock-up agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns (which do not include any investors in the offering referenced herein) and is not for the benefit of, nor may any provisions hereof be enforced by, any other person (including any investors in the offering referenced herein).
The undersigned understands that, if the Agreement is terminated prior to payment for and delivery of the securities to be sold in the Public Offering, then this lock-up agreement shall be void and of no further force or effect.
Whether or not the Public Offering actually occurs depends on a number of factors, including market conditions. Any Public Offering will only be made pursuant to an Agreement, the terms of which are subject to negotiation between the Company and the Placement Agent.
[SIGNATURE PAGE TO FOLLOW]
| Very truly yours, | |
| (Name - Please Print) | |
| (Signature) | |
| (Name of Signatory, in the case of entities - Please Print) | |
| (Title of Signatory, in the case of entities - Please Print) | |
| Address: |
| 17 |
Exhibit 4.1
ORDINARY SHARE PURCHASE WARRANT
DarkIris Inc.
| Warrant Shares: [●] | Issue Date: [ ], 2026 |
THIS ORDINARY SHARE PURCHASE WARRANT (the “Warrant”) certifies that, for value received, [●] or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after [●], 2026 (the “Initial Exercise Date”), and on or prior to 5:00 p.m. (New York City time) on the date that is six (6) months following the Issue Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from DarkIris Inc, a Cayman Islands exempted company incorporated under the laws of the Cayman Islands (the “Company”), up to [______] Class A ordinary shares, par value US$0.0016 per share (the “Ordinary Shares”) of the Company (as subject to adjustment hereunder, the “Warrant Shares”). The purchase price of one Ordinary Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings set forth in this Section 1:
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Base Warrant Shares” means 4,166,666 Ordinary Shares, subject to adjustment pursuant to Section 3 hereof.
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Shares are then listed or quoted on a Trading Market, the bid price of the Ordinary Shares for the time in question (or the nearest preceding date) on the Trading Market on which the Ordinary Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Ordinary Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Ordinary Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary Shares are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per Ordinary Share so reported, or (d) in all other cases, the fair market value of one Ordinary Share as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
“Maximum Warrant Shares” means Maximum Ordinary Shares, subject to adjustment pursuant to Section 3 hereof.
“Ordinary Share Equivalents” means any securities of the Company or of the Company’s subsidiaries that would entitle the holder thereof to acquire at any time Ordinary Shares, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Ordinary Shares.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Trading Day” means a day on which the principal Trading Market for the Ordinary Shares is open for trading.
“Trading Market” means any of the following markets or exchanges on which the Ordinary Shares are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange or the Cboe BZX Exchange, Inc. (or any successors to any of the foregoing).
“Transfer Agent” means Transhare Corporation or such other Person or any successor transfer agent of the Company in respect of the Ordinary Shares.
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Ordinary Shares for such date (or the nearest preceding date) on the Trading Market on which the Ordinary Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Ordinary Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Ordinary Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary Shares are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per Ordinary Share so reported, or (d) in all other cases, the fair market value of one Ordinary Share as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
“Zero Exercise Price Option” means the Holder’s right to exercise this Warrant pursuant to Section 2(c) without payment of additional cash consideration, subject to the calculation methodology and limitations set forth therein.
Section 2. Exercise.
(a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or a PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) one (1) Trading Day and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares issuable hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares issuable hereunder shall have the effect of lowering the outstanding number of Warrant Shares issuable hereunder in an amount equal to the corresponding number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such exercises of Warrant and purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. By the Holder’s acceptance of this Warrant, the Holder and any of its assigns acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
(b) Exercise Price. The exercise price per Ordinary Share under this Warrant shall be US$2.04, equal to 170% of the $1.20 per-share offering price, subject to adjustment hereunder (the “Exercise Price”), provided at no time shall any adjustment be made if the adjustment would result in the Exercise Price being reduced to below the par value of the Ordinary Shares and at no time shall the Exercise Price be lower than the Floor Price (as defined in Section 2(c) herein).
(c) Cashless Exercise. If at any time of exercise hereof, there is no effective registration statement registering, or the prospectus contained therein is not available for, the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A) where:
| (A) = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Ordinary Shares on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
| (B) = | the Exercise Price of this Warrant, as adjusted hereunder; and |
| (X) = | the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
In addition to the rights with respect to Cashless Exercise set forth above, the Holder may, at any time and in its sole discretion, exercise this Warrant in whole or in part by means of a “zero price exercise” (the “Zero Exercise Price Option”) in which the Holder shall be entitled to receive a number of Warrant Shares equal to the product of (a) the aggregate number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than pursuant to the Zero Exercise Price Option, and (b) the quotient obtained by dividing (i) the Exercise Price minus the applicable Low Price by (ii) fifty percent (50%) of the applicable Low Price.
For purposes of the Zero Exercise Price Option, the “Low Price” shall mean the lowest daily VWAP of the Ordinary Shares during the five (5) Trading Days immediately preceding the applicable exercise date. The Zero Exercise Price Option shall only be available at a time when the Low Price is lower than the then applicable Exercise Price. For purposes of calculating the Zero Exercise Price Option, the applicable Low Price shall be deemed to equal the Floor Price if the applicable Low Price is lower than the Floor Price. “Floor Price” means US$0.28, subject to adjustment for reverse and forward share splits, recapitalizations and similar transactions. Notwithstanding anything to the contrary contained herein, the aggregate number of Warrant Shares issuable pursuant to the Zero Exercise Price Option shall not exceed the Maximum Warrant Shares, subject to adjustment pursuant to Section 3 hereof.
If Warrant Shares are issued in either a “cashless exercise” or a “zero price exercise” option, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c). Without limiting any rights of the Holder to receive Warrant Shares in a “cashless exercise” pursuant to this Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) or Section 2(d)(iv), there is no circumstance that would require the Company to net-cash settle this Warrant.
(d) Mechanics of Exercise.
(i) Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares specified by the Holder in the Notice of Exercise to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant is being exercise via cashless exercise, and otherwise by entering in the Company’s register of members the name of the Holder or its designee as the holder of the number of Warrant Shares to which the Holder is entitled pursuant to such exercise and physical delivery of a certificate in respect of such Warrant Shares (if required) to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise or a “zero price exercise” option) is received by the Company one (1) Trading Day prior to such second Trading Day after the delivery of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise, provided that payment of the aggregate Exercise Price (other than in the instance of a cashless exercise or a “zero price exercise” option) is received by the Company prior to the end of the Standard Settlement Period (such date, the “Warrant Share Delivery Date”). Upon the delivery of the Notice of Exercise, the Holder shall be deemed for purposes of Regulation SHO to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Ordinary Shares on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the third Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Ordinary Shares as in effect on the date of delivery of the Notice of Exercise.
(ii) Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to subscribe for and purchase the updated number of Warrant Shares issuable pursuant to the unexercised portion of this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
(iii) Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
(iv) Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Ordinary Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Ordinary Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Ordinary Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Ordinary Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Ordinary Shares with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver Ordinary Shares upon exercise of the Warrant as required pursuant to the terms hereof.
(v) No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
(vi) Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
(vii) Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
(e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Ordinary Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Ordinary Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Ordinary Shares which would be issuable upon (i) exercise of the remaining, non-exercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or non-converted portion of any other securities of the Company (including, without limitation, any other Ordinary Share Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding Ordinary Shares, a Holder may rely on the number of outstanding Ordinary Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Ordinary Shares outstanding. Upon the written or oral request of a Holder, the Company shall within one (1) Trading Day confirm orally and in writing to the Holder the number of Ordinary Shares then outstanding. In any case, the number of outstanding Ordinary Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding Ordinary Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by the Holder prior to the issuance of this Warrant, 9.99%) of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section 3. Certain Adjustments.
(a) Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution or distributions on its Ordinary Shares or any other equity or equity equivalent securities payable in Ordinary Shares (which, for avoidance of doubt, shall not include any Ordinary Shares issued by the Company upon exercise of this Warrant), (ii) subdivides its outstanding Ordinary Shares into a larger number of shares, (iii) combines (including by way of reverse share split) its outstanding Ordinary Shares into a smaller number of shares or (iv) issues by reclassification of its Ordinary Shares any capital shares of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Ordinary Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Ordinary Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
(b) Share Combination Event Adjustment. If the Company effects a stock split, reverse stock split, stock dividend, combination, recapitalization or similar transaction affecting the Common Stock, the Exercise Price, Floor Price, Base Warrant Shares, Maximum Warrant Shares and applicable VWAP/Low Price references shall be proportionally adjusted so that the economic relationship contemplated by this Warrant is preserved. All market-price references shall be calculated on a split-adjusted basis. The Company may effect a reverse stock split or similar share combination without the Holder’s consent, subject to prior written notice to the Holder. No additional reset or repricing shall be triggered solely as a result of such event.
(c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Ordinary Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders of any class of Ordinary Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Ordinary Shares as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the time of such grant, issuance or sale of the Purchase Rights, such Purchase Rights shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant; provided, however, that to the extent such Purchase Rights expire for the shareholders of the Company if not exercised, the Purchase Rights will also expire for the Holder as of such date.
(d) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Ordinary Shares, by way of return of capital or otherwise (including, without limitation, any distribution of cash, shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Ordinary Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.
(e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Ordinary Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of fifty percent (50%) or more of the outstanding Ordinary Shares, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Ordinary Shares or any compulsory share exchange pursuant to which the Ordinary Shares are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than fifty percent (50%) of the outstanding Ordinary Shares (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of Ordinary Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Ordinary Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Ordinary Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Ordinary Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board of Directors, Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Ordinary Shares of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, shares or any combination thereof, or whether the holders of Ordinary Shares are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further, that if holders of Ordinary Shares of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Ordinary Shares will be deemed to have received common equity (or ordinary shares) of the Successor Entity (which Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100%, (C) the underlying price per share used in such calculation shall be the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction, (D) a remaining option time equal to the time between the date of the public announcement of the applicable contemplated Fundamental Transaction and the Termination Date, and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration) within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Ordinary Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Ordinary Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
(f) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of Ordinary Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Ordinary Shares (excluding treasury shares, if any) issued and outstanding.
(g) Notice to Holder.
(i) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
(ii) Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Ordinary Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary Shares, (C) the Company shall authorize the granting to all holders of the Ordinary Shares rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the Ordinary Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Ordinary Shares are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the Warrant Register of the Company, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of Ordinary Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of Ordinary Shares of record shall be entitled to exchange their Ordinary Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Report of Foreign Private Issuer on Form 6-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
Section 4. Transfer of Warrant.
(a) Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary and subject to Sections 2(a) and 2(d)(ii), the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
(b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
(c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
(a) No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i).
(b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any share certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or share certificate, if mutilated, the Company will make and deliver a new Warrant or share certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or share certificate.
(c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Trading Day, then, such action may be taken or such right may be exercised on the next succeeding Trading Day.
(d) Authorized Shares.
The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized share capital a sufficient number of unissued Ordinary Shares to provide for the issuance of the Warrant Shares upon the exercise of this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of completing the issuance of the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Ordinary Shares may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its amended and restated memorandum and articles of association or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
(e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding. Notwithstanding the foregoing, nothing in this paragraph shall limit or restrict the federal district court in which a Holder may bring a claim under the federal securities law.
(f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
(g) Non-waiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
(h) Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, at 6/F, Cheong Sun Tower, No. 118 Wing Lok Street, Sheung Wan, Hong Kong, Attention: Hong Zhifang, Chief Executive Officer; e-mail address: kaka@188.com, or such other email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (a) the time of transmission, if such notice or communication is delivered via e-mail attachment at the email address set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via e-mail attachment at the e-mail address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Report of Foreign Private Issuer on Form 6-K.
(i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Ordinary Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
(j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
(k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of the Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or a holder of Warrant Shares.
(l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
(m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
(n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
(Signature Page Follows)
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| DarkIris Inc. | ||
| By: | ||
| Name: | ||
| Title: | ||
NOTICE OF EXERCISE
| TO: | DarkIris Inc. |
Reference is made to the Ordinary Shares Purchase Warrant issued as of [●], 2026 by the Company in favor of the undersigned (the “Warrant”).
(1) The undersigned hereby elects to subscribe for and purchase ________ ordinary shares of no par value each of the Company (the “Exercised Warrant Shares”) pursuant to the terms of the attached Warrant, and tenders herewith payment of the relevant aggregate Exercise Price (as defined in the Warrant) in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
| ☐ | in lawful money of the United States; | |
| ☐ | if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in the Warrant, to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in the Warrant; or | |
| ☐ | if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the provisions of subsection 2(c), to exercise this Warrant pursuant to the “zero price exercise” option procedure set forth in subsection 2(c). |
(3) Please issue the Exercised Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The undersigned hereby agrees and confirms to hold the Exercised Warrant Shares in accordance with the terms of the Company’s articles of association.
The Exercised Warrant Shares shall be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE OF HOLDER]
| Name of Investing Entity: |
| Signature of Authorized Signatory of Investing Entity: |
| Name of Authorized Signatory: |
| Title of Authorized Signatory: |
| Date: |
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: | ______________________________________ |
| (Please Print) | |
| Address: | ______________________________________ |
Phone Number: Email Address: |
(Please Print) ______________________________________ ______________________________________ |
| Dated: _______________ __, ______ | |
| Holder’s Signature:_________________________ | |
Holder’s Address: _________________________ |
Exhibit 4.2
FORM OF PRE-FUNDED ORDINARY SHARE PURCHASE WARRANT
DarkIris Inc.
| Warrant Shares: [ ● ] | Issue Date and Initial Exercise Date: [ ], 2026 |
THIS PRE-FUNDED ORDINARY SHARE PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and until this Warrant is exercised in full (the “Termination Date”) but not thereafter, to subscribe for and purchase from DarkIris Inc, a Cayman Islands exempted company incorporated under the laws of the Cayman Islands (the “Company”), up to [-] shares (as subject to adjustment hereunder, the “Warrant Shares”) of Ordinary Shares. The Holder has previously paid $ [ ● ] of the purchase price of one Ordinary Share prior to the issuance of this Warrant, and the remaining purchase price of one Ordinary Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated September [ ● ], 2026, among the Company and the purchasers signatory thereto.
Section 2. Exercise.
a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of (i) a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”) and (ii) the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank (unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise). No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
b) Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $[ ● ] per Warrant Share, was pre-funded to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise price of $[ ● ] per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination Date. The remaining unpaid exercise price per share of Ordinary Share under this Warrant shall be $[ ● ], subject to adjustment hereunder (the “Exercise Price”).
c) Cashless Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) | = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, or (ii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; | |
| (B) | = the Exercise Price of this Warrant, as adjusted hereunder; and | |
| (X) | = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c), except to the extent required by applicable law, rules or regulations.
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Share is then listed or quoted on a Trading Market, the daily volume weighted average price of the Ordinary Share for such date (or the nearest preceding date) on the Trading Market on which the Ordinary Share is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Ordinary Share is not then listed or quoted for trading on a Trading Market and if prices for the Ordinary Share are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Ordinary Share so reported, or (c) in all other cases, the fair market value of a Ordinary Share as determined by an independent appraiser selected in good faith by the Company and reasonably acceptable to the Purchasers of a majority in interest of the Securities then outstanding, the fees and expenses of which shall be paid by the Company.
d) Mechanics of Exercise.
i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) the Holder has sold the Warrant Shares pursuant to an effective registration statement registering the resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations or any requirement for the Company to comply with the current public information obligations of Rule 144(c) pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise (and receipt of the aggregate Exercise Price) and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (and receipt of the aggregate Exercise Price) (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise and receipt of payment of the aggregate Exercise Price (other than in the case of a cashless exercise), the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares. The Company agrees to maintain a transfer agent that is a participant in the Fast Automated Securities Transfer Program (FAST program) so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Ordinary Share as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 12:00 p.m. (New York City time) on the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date.
ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
v. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vi. Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Ordinary Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Ordinary Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Ordinary Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Ordinary Share Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding Ordinary Shares, a Holder may rely on the number of outstanding shares of Ordinary Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Ordinary Shares outstanding. Upon the written request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of Ordinary Shares then outstanding. In any case, the number of outstanding Ordinary Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding Ordinary Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or 9.99% at the election of the Holder) of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.
Section 3. Certain Adjustments.
a) Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution or distributions on shares of its Ordinary Shares or any other equity or equity equivalent securities payable in Ordinary Shares (which, for avoidance of doubt, shall not include any Ordinary Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Ordinary Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Ordinary Shares into a smaller number of shares, or (iv) issues by reclassification of Ordinary Shares any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Ordinary Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Ordinary Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Share Combination Event Adjustment. If the Company effects any stock split, reverse stock split, stock dividend, share combination, recapitalization or similar transaction affecting the Ordinary Shares (each, a “Share Combination Event”), the Exercise Price and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately adjusted to reflect such Share Combination Event and preserve the economic relationship contemplated by this Warrant. All market-price references, if any, shall be calculated on a split-adjusted basis. The Company may effect a reverse stock split or similar share combination without the consent of the Holder, subject to prior written notice to the Holder. For the avoidance of doubt, no additional reset or repricing shall be triggered solely as a result of such Share Combination Event.
c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Ordinary Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders of any class of Ordinary Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Ordinary Shares as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d) Pro Rata Distributions. Except in the case of a Fundamental Transaction to which Section 3(e) below is applicable or to which a notice under Section (g)(ii) below applies, during such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Ordinary Shares, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Ordinary Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Ordinary Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of more than 50% of the outstanding Ordinary Shares or more than 50% of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Ordinary Shares or any compulsory share exchange pursuant to which the Ordinary Share is effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Ordinary Shares or more than 50% of the voting power of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to the Beneficial Ownership Limitation in Section 2(e) on the exercise of this Warrant), the number of Ordinary Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Ordinary Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Ordinary Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Ordinary Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Ordinary Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Ordinary Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(e) regardless of (i) whether the Company has sufficient authorized Ordinary Shares for the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date.
f) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of Ordinary Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Ordinary Shares (excluding treasury shares, if any) issued and outstanding.
g) Notice to Holder.
i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Ordinary Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary Shares, (C) the Company shall authorize the granting to all holders of the Ordinary Shares rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the Ordinary Shares, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Ordinary Share is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the Warrant Register of the Company, at least three calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Ordinary Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Ordinary Shares of record shall be entitled to exchange their Ordinary Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice.
Section 4. Transfer of Warrant.
a) Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4(d) hereof, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company on the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the issue date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a) No Rights as Shareholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i). Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c), in no event shall the Company be required to net cash settle an exercise of this Warrant.
b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
d) Authorized Shares.
i. The Company covenants that, following the Initial Exercise Date and during the period the Warrant is outstanding, it will reserve from its authorized and unissued Ordinary Shares a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Ordinary Shares may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
ii. Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its articles of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
iii. Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.
f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.
i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Ordinary Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
l) Amendment. Other than Section 2(e) and this Section 5(l), which may not be amended, this Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
(Signature Page Follows)
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| DarkIris Inc. | ||
| By: | ||
| Name: | ||
| Title: | ||
NOTICE OF EXERCISE
To: DarkIris Inc.
(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
☐ in lawful money of the United States; or
☐ if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE OF HOLDER]
| Name of Investing Entity: ___________________________________________________________________________ |
| Signature of Authorized Signatory of Investing Entity: _____________________________________________________ |
| Name of Authorized Signatory: _______________________________________________________________________ |
| Title of Authorized Signatory: ________________________________________________________________________ |
| Date: ___________________________________________________________________________________________ |
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: | ||
| (Please Print) | ||
| Address: | ||
Phone Number: |
(Please Print) | |
| Email Address: | ||
| Dated: _______________ __, ______ | ||
| Holder’s Signature:_______________________________ | ||
Holder’s Address: _______________________________ |
Exhibit 5.1
DarkIris Inc. Ascentium (Cayman) Limited, 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman KY1-1002, Cayman Islands |
Email kchan@applebyglobal.com
Direct Dial +852 2905 5722 +852 2905 5757
Tel+852 2523 8123
Appleby Ref 474681.0003
| |
| Attention: Board of Directors (Addressee) | 30 September 2026 |
Suites 3504B-06 35/F, Two Taikoo Place 979 King’s Road Quarry Bay Hong Kong
Tel +852 2523 8123
applebyglobal.com
Managing Partner David Bulley
Partners Fiona Chan Kitty Chan Vincent Chan Chris Cheng Richard Grasby Judy Lee Michael Makridakis John McCarroll SC Lorinda Peasland Eliot Simpson Freya Xu |
Dear Company
DarkIris Inc. (Company)
INTRODUCTION
This opinion as to Cayman Islands law is addressed to you in connection with the filing by the Company of a registration statement on 30 September 2026 (Registration Statement) relating to the registration of up to an aggregate of 56,547,610 Class A ordinary shares with par value US$0.0016 per share of the Company (Class A Ordinary Shares), consisting of (i) up to 4,166,666 Class A Ordinary Shares included in the Units (as defined below), or up to 4,166,666 Class A Ordinary Shares issuable upon exercise of the Pre-Funded Warrants (as defined below) (Offer Shares), and (ii) up to 52,380,944 Class A Ordinary Shares issuable upon exercise of the Warrants (as defined below), assuming that all holders exercise the Warrants using the zero exercise price option (Warrant Shares). Each unit (Unit) consists of (i) one Class A Ordinary Share, and (ii) one warrant to purchase one Class A Ordinary Share or otherwise receive a greater number of Class A Ordinary Shares pursuant to the zero exercise price option (a Warrant). The Company is also offering up to 4,166,666 pre-funded units (Pre-Funded Units), with each Pre-Funded Unit consisting of (i) one pre-funded warrant (each, a Pre-Funded Warrant) to purchase one Class A Ordinary Share, and (ii) one Warrant (Pre-Fund Warrant Shares, collectively with Offer Shares and Warrant Shares known as Shares).
We are furnishing this opinion as Exhibits 5.1 and 23.2 to the Registration Statement.
OUR REVIEW
For the purposes of giving this opinion we have examined and relied upon the documents listed in Schedule 1 (Documents).
We have not made any other enquiries concerning the Company and in particular we have not investigated or verified any matter of fact or opinion (whether set out in the Document or elsewhere) other than as expressly stated in this opinion.
Unless otherwise defined herein, capitalised terms have the meanings assigned to them in Schedule 1. |
Bermuda ■ British Virgin Islands ■ Cayman Islands ■ Guernsey ■ Hong Kong ■ Isle of Man ■ Jersey ■ Mauritius ■ Seychelles ■ Shanghai ■ Shenzhen
LIMITATIONS
Our opinion is limited to, and should be construed in accordance with, the laws of the Cayman Islands at the date of this opinion. We express no opinion on the laws of any other jurisdiction.
This opinion is issued solely for the purposes of the filing of the Registration Statement and the offering of the Shares by the Company and is not to be relied upon in respect of any other matter.
ASSUMPTIONS AND RESERVATIONS
We give the following opinions on the basis of the assumptions set out in Schedule 2 (Assumptions), which we have not verified, and subject to the reservations set out in Schedule 3 (Reservations).
OPINIONS
| 1. | Incorporation and Status: The Company is duly incorporated as an exempted company incorporated with limited liability and existing under the laws of the Cayman Islands and is a separate legal entity. | |
| 2. | Authorized Share Capital: Based solely on our review of the Constitutional Documents, the Company is authorized to issue 281,250,000,000 Class A Ordinary Shares of par value US$0.0016 each and 31,250,000,000 Class B ordinary shares of the Company of par value US$0.0016 each. | |
| 3. | Authorisation: The Company has taken all necessary corporate action to authorise the issuance of the Shares under the Registration Statement. | |
| 4. | Issuance of Shares: Based on the foregoing, and subject to the Assumptions and Reservations, we are of the opinion that when issued and paid for as contemplated by the Registration Statement and in accordance with the Resolutions, the Shares will be validly issued, fully paid and non-assessable. The term fully paid and non-assessable means when used herein that no further sums are required to be paid by the holders thereof in connection with the issuance of the Shares. | |
| 5. | Disclosure: The statements under the heading “Enforceability of Civil Liabilities” in the Registration Statement, insofar as such statements constitute statements of Cayman Islands law and only to the extent governed by the laws of the Cayman Islands, are accurate in all material respects. |
CONSENT
We consent to the filing of this opinion as an exhibit to the Registration Statement. In giving this consent, we do not hereby admit that we are experts within the meaning of Section 11 of the United States of America Securities Act of 1933, as amended (Securities Act) or that we are within the category of persons whose consent is required under Section 7 of the Securities Act, the rules and regulations of the United States Securities and Exchange Commission (SEC) promulgated thereunder, or Item 509 of the SEC’s Regulation S-K promulgated under the Securities Act.
This opinion may be used only in connection with the filing of the Registration Statement.
Yours faithfully
Appleby |
| 2 | |
Bermuda ■ British Virgin Islands ■ Cayman Islands ■ Guernsey ■ Hong Kong ■ Isle of Man ■ Jersey ■ Mauritius ■ Seychelles ■ Shanghai ■ Shenzhen |
| |
Schedule 1
Documents Examined
| 1. | A copy of the certificate of incorporation of the Company dated 31 May 2024 (Certificate of Incorporation). | |
| 2. | A copy of the third amended and restated memorandum of association and articles of association of the Company adopted on 6 August 2026 (together the Constitutional Documents). | |
| 3. | A copy of the written resolutions of the directors of the Company passed on 29 September 2026 (the Resolutions). | |
| 4. | A copy of the register of directors and officers of the Company dated 10 July 2026 (Register of Directors). | |
| 5. | A scanned copy of the draft Registration Statement to be filed with the SEC which has been furnished to us on 29 September 2026 (Registration Statement). |
| 3 | |
Bermuda ■ British Virgin Islands ■ Cayman Islands ■ Guernsey ■ Hong Kong ■ Isle of Man ■ Jersey ■ Mauritius ■ Seychelles ■ Shanghai ■ Shenzhen |
| |
Schedule 2
Assumptions
We have assumed:
| 1. | (i) that the originals of all documents examined in connection with this opinion are authentic, accurate and complete; and (ii) the authenticity, accuracy, completeness and conformity to original documents of all documents submitted to us as copies; | |
| 2. | that there has been no change to the information contained in the Certificate of Incorporation and the Register of Directors and that the Constitutional Documents remain in full force and effect and are unamended; | |
| 3. | that the signatures, initials and seals on all documents and certificates submitted to us as originals or copies of executed originals are authentic, and the signatures and initials on any document executed by the Company are the signatures and initials of a person or persons authorised by the Company, by resolution of its board of directors or any power of attorney granted by the Company, to execute such document; | |
| 4. | that where incomplete documents, drafts or signature pages only have been supplied to us for the purposes of issuing this opinion, the original documents have been duly completed and correspond in all material respects with the last version of the relevant documents examined by us prior to giving our opinion; | |
| 5. | that the Registration Statement does not differ in any material respects from any draft of the same which we have examined and upon which this opinion is based; | |
| 6. | the truth, accuracy and completeness of all representations and warranties or statements of fact or law (other than as to the laws of the Cayman Islands in respect of matters upon which we have expressly opined) made in the Registration Statement and any other documents reviewed by us; | |
| 7. | that none of the Company’s directors or its registered office has received any notice of any litigation or threatened litigation to which the Company is or may be party; | |
| 8. | that the Company has not (i) received notice of any stop notice under Order 50 of the Grand Court Rules in respect of any of its shares or (ii) received notice of any restrictions notice under the Beneficial Ownership Transparency Act (as amended) of the Cayman Islands in respect of any of its shares, which restrictions notice has not been withdrawn by the registered office or ceased by court order; |
| 4 | |
Bermuda ■ British Virgin Islands ■ Cayman Islands ■ Guernsey ■ Hong Kong ■ Isle of Man ■ Jersey ■ Mauritius ■ Seychelles ■ Shanghai ■ Shenzhen |
| |
| 9. | that (i) any meetings at which the Resolutions were passed were duly convened and had a duly constituted quorum present and voting throughout, (ii) all interests of the directors of the Company on the subject matter of the Resolutions, if any, were declared and disclosed in accordance with the law and Constitutional Documents, (iii) the Resolutions have not been revoked, amended or superseded, in whole or in part, and remain in full force and effect at the date of this opinion, and (iv) the directors of the Company have concluded that the documents approved by the Resolutions and the transactions contemplated thereby are bona fide in the best interests of the Company and for a proper purpose of the Company; | |
| 10. | that the Register of Directors accurately reflect the names of all directors of the Company as at the date the Resolutions were passed or adopted, and as at the date of this opinion; | |
| 11. | that there is no matter affecting the authority of the directors of the Company to effect the entry by the Company into the Resolutions including breach of duty, lack of good faith, not disclosed by the Constitutional Documents or the Resolutions, which would have any adverse implications in relation to the opinions expressed in this opinion; | |
| 12. | that there are no records of the Company, agreements, documents or arrangements other than the Constitutional Documents, the Resolutions and the documents expressly referred to herein as having been examined by us which materially affect, amend or vary the transactions contemplated in the Document or restrict the powers and authority of the directors of the Company in any way which would affect opinions expressed in this opinion; | |
| 13. | that any applicable escrow conditions have been met; and | |
| 14. | that the directors or members of the Company have not taken any steps to have the Company struck off or placed in liquidation, no steps have been taken to wind up the Company and no receiver has been appointed over any of the Company’s property or assets. |
| 5 | |
Bermuda ■ British Virgin Islands ■ Cayman Islands ■ Guernsey ■ Hong Kong ■ Isle of Man ■ Jersey ■ Mauritius ■ Seychelles ■ Shanghai ■ Shenzhen |
| |
Schedule 3
Reservations
Our opinion is subject to the following:
| 1. | Penalties: Any provision as to the payment of additional money consequent on the breach of any provision of a Document by any person expressed to be a party to it, whether expressed by way of penalty, additional or default interest, liquidated damages or otherwise, may be unenforceable if it could be established that such additional payment constitutes a penalty rather than a compensatory amount. | |
| 2. | Severability: Severability provisions contained in the Documents may not be binding and the question of whether or not provisions may be severed would be determined by the Cayman Islands courts at their discretion, having regard to such matters as whether a particular severance would accord with public policy or involve the courts in making a new contract for the parties. | |
| 3. | Other Obligations: We express no opinion as to whether the acceptance, execution or performance of the Company’s obligations under the Documents will result in the breach of or infringe any other agreement, deed or document (other than the Constitutional Documents) entered into by or binding on the Company. | |
| 4. | Determination: Notwithstanding the provisions of the Documents, a determination, designation, calculation or certificate of any party to the Documents, as to any matter provided for in such Documents might, in certain circumstances, be held in the Cayman Islands courts not to be final, conclusive or binding (for example, if it could be shown to have been fraudulent or erroneous on its face, manifestly inaccurate, made on an unreasonable or arbitrary basis or not to have been reached in good faith) and the Documents will not necessarily escape judicial enquiry into the merit of any claim by any party in that respect. | |
| 5. | Discretion: Where a party to the Documents is vested with a discretion or may determine a matter in its opinion or is given the right to determine a conclusive calculation or determination, the Cayman Islands courts, if called upon to consider the question, may require that such discretion be exercised reasonably or that such opinion be based upon reasonable grounds or may determine that such right is not finally binding. | |
| 6. | Modification of Documents: We express no view on any provision in any of the Documents requiring written amendments and waivers of any of the provisions of such Documents insofar as it suggests that oral or other modification, amendments or waivers could not be effectively agreed upon or granted by or between the parties or implied by the course of conduct of the parties. |
| 6 | |
Bermuda ■ British Virgin Islands ■ Cayman Islands ■ Guernsey ■ Hong Kong ■ Isle of Man ■ Jersey ■ Mauritius ■ Seychelles ■ Shanghai ■ Shenzhen |
| |
| 7. | Limitations on Liability: The effectiveness of any terms releasing or limiting a party from a liability or duty owed is limited by law. | |
| 8. | Jurisdiction: Where any Document provides for the submission to the exclusive or non-exclusive jurisdiction of the Cayman Islands courts, the court may decline to accept jurisdiction in any matter where (a) it determines that some other jurisdiction is a more appropriate or convenient forum; (b) another court of competent jurisdiction has made a determination in respect of the same matter; or (c) litigation is pending in respect of the same matter in another jurisdiction. | |
| 9. | Concurrent Proceedings: Proceedings may be stayed in the Cayman Islands if concurrent proceedings in respect of the same matter are or have been commenced in another jurisdiction. Notwithstanding any provision in the Documents that all disputes arising under or in connection with the Documents should be brought before the competent court in the jurisdiction specified in the Documents, a Cayman Islands court has discretion to refuse to stay proceedings in the Cayman Islands if it is satisfied that it is just and equitable to do so and may grant leave to serve Cayman Islands proceedings outside of the Cayman Islands. | |
| 10. | Foreign Law: Relevant foreign law will not be applied by the Cayman Islands courts if it is not pleaded and proved, it is not a bona fide and lawful choice of law, or it would be contrary to public policy in the Cayman Islands for that law to be applied. | |
| 11. | Currency of Court Judgments: The Cayman Islands Grand Court Rules 1995 expressly contemplate that judgments may be granted by the Grand Court of the Cayman Islands in currencies other than Cayman Islands dollars or United States dollars. Such Rules provide for various specific rates of interest payable upon judgment debts according to the currency of the judgment. | |
| 12. | Costs: A Cayman Islands court may refuse to give effect to any provisions of the Documents in respect of costs of unsuccessful litigation brought before the Cayman Islands court or where that court has itself made an order for costs. | |
| 13. | Conversion of Debts: In the event the Company is placed into liquidation, the Cayman Islands court is likely to require that all debts are converted (at the official exchange rate at the date of conversion) into and paid in a common currency which is likely to be Cayman Islands dollars or United States dollars. | |
| 14. | Stamp Duty: Cayman Islands stamp duty will be payable if the Documents are executed in or brought to the Cayman Islands, or produced before a Cayman Islands court. An unstamped document which is required to be stamped may not be admissible in evidence until duly stamped and unstamped documents may be subject to penalties and interest for late stamping. Certain criminal offences may also be committed in connection with unstamped documents. |
| 7 | |
Bermuda ■ British Virgin Islands ■ Cayman Islands ■ Guernsey ■ Hong Kong ■ Isle of Man ■ Jersey ■ Mauritius ■ Seychelles ■ Shanghai ■ Shenzhen |
| |
| 15. | Preferences: Every conveyance or transfer of property, or charge thereon, and every payment obligation and judicial proceeding, made, incurred, taken or suffered by a company at a time when that company was unable to pay its debts within the meaning of section 93 of the Companies Act (as amended) of the Cayman Islands (Companies Act), and made or granted in favour of a creditor with a view to giving that creditor a preference over the other creditors of the company, would be voidable upon the application of the company’s liquidator pursuant to section 145(1) of the Companies Act, if made, incurred, taken or suffered within the six months preceding the commencement of a liquidation of the company. Such actions will be deemed to have been made with a view to giving such creditor a preference if it is a “related party” of the company. A creditor shall be treated as a related party if it has the ability to control a company or exercise significant influence over a company in making financial and operating decisions. | |
| 16. | Undervalues: Any disposition of property made at an undervalue by or on behalf of a company and with an intent to defraud its creditors (which means an intention to wilfully defeat an obligation owed to a creditor), shall be voidable (i) under section 146 of the Companies Act at the instance of the company’s official liquidator, and (ii) under the Fraudulent Dispositions Act (as amended) of the Cayman Islands, at the instance of a creditor thereby prejudiced. | |
| 17. | Defrauding Creditors: If any business of a company has been carried on with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, the Cayman Islands court may declare that any persons who were knowingly parties to the carrying on of the business of the company in such manner are liable to make such contributions, if any, to the company’s assets as the court thinks proper. | |
| 18. | Fettering of Statutory Powers: We express no opinion as to the validity or binding effect of any provision in the Documents which provides that the Company will not exercise its statutory powers. This may constitute an unlawful fetter on the statutory powers of the Company. | |
| 19. | Corporate Documents: The Registry of Companies in the Cayman Islands is not public in the sense that copies of the Constitutional Documents and information on shareholders is not publicly available and information on directors is limited. We have therefore obtained scanned copies of the corporate documents specified in Schedule 1 and relied exclusively on such scanned copies for the verification of such corporate information. | |
| 20. | Documents with an “as of” Date: We express no opinion on the effectiveness of the date of any document which is dated as of or with effect from a date prior to that on which it is authorised, executed, and delivered by all parties thereto. |
| 8 | |
Bermuda ■ British Virgin Islands ■ Cayman Islands ■ Guernsey ■ Hong Kong ■ Isle of Man ■ Jersey ■ Mauritius ■ Seychelles ■ Shanghai ■ Shenzhen |
Exhibit 5.2
 | Loeb & Loeb LLP 2206-19
Jardine House Tel +852.3923.1111 Fax +852.3923.1100 Email HongKong@loeb.com |
樂博律師事務所有限法律責任合夥 香港中環康樂廣場1號 怡和大廈2206-19室 電話 +852.3923.1111 傳真 +852.3923.1100 電郵 HongKong@loeb.com |
September 30, 2026
DarkIris Inc.
6/F, Cheong Sun Tower
No. 118 Wing Lok Street
Sheung Wan, Hong Kong
| Re: | Sale of Securities registered pursuant to Registration Statement on Form F-1 |
Ladies and Gentlemen:
We have acted as counsel to DarkIris Inc., an exempted company incorporated under the laws of the Cayman Islands (the “Company”), in connection with the preparation and filing with the Securities and Exchange Commission, pursuant to the Securities Act of 1933, as amended (the “Securities Act”), of the Company’s Registration Statement on Form F-1, as amended (the “Registration Statement”). The Company has arranged for the sale of the following securities covered by the Registration Statement (the “Securities”), which are to be offered and sold directly by the Company pursuant to that certain securities purchase agreement between the Company and each purchaser party thereto (the “Securities Purchase Agreement”):
| i. | up to 4,166,666 units (the “Units”), each consisting of one class A ordinary share, par value $0.0016 per share (the “Class A Ordinary Shares”), or at the option of such purchaser, one pre-funded warrant to purchase one Class A Ordinary Share (each, a “Pre-Funded Warrant”) in lieu thereof, and one warrant to purchase one Class A Ordinary Share (each a “Warrant”); |
| ii. | up to 4,166,666 Class A Ordinary Shares underlying the Pre-Funded Warrants (the “Pre-Funded Warrant Shares”); |
| iii. | up to 52,380,944 Class A Ordinary Shares underlying the Warrants (the “Warrant Shares”). |
We understand that the Securities will be issued to purchasers participating in the Offering pursuant to the Securities Purchase Agreement and in the manner described in the Registration Statement.
In connection with the foregoing, we have examined originals or copies of such corporate records of the Company, certificates and other communications of public officials, certificates of officers of the Company and such other documents as we have deemed relevant or necessary for the purpose of rendering the opinions expressed herein. As to questions of fact material to those opinions, we have, to the extent we deemed appropriate, relied on certificates of officers of the Company and on certificates and other communications of public officials. We have assumed the genuineness of all signatures on, and the authenticity of, all documents submitted to us as originals, the conformity to authentic original documents of all documents submitted to us as copies thereof, the due authorization, execution and delivery by the parties thereto other than the Company of all documents examined by us, and the legal capacity of each individual who signed any of those documents. In addition, we have assumed that (a) each of the Securities Purchase Agreement, the Warrants, and the Pre-Funded Warrants (the “Transaction Documents”) will be duly executed and delivered by all parties thereto, (b) there will not have occurred, prior to the date of the issuance of the Warrant Shares or Pre-Funded Warrant Shares: (i) any change in law affecting the validity or enforceability of the Warrants or the Pre-Funded Warrants, or (ii) any amendments to the Transaction Documents, (c) at the time of the issuance and sale of the Securities: (i) the Company is validly existing and in good standing under the law of the British Virgin Islands, (ii) the Company has not amended its memorandum and articles of association, (iii) the board of directors of the Company and any committee thereof has not taken any action to amend, rescind or otherwise reduce its prior authorization of the issuance of the Securities and (iv) the Company will receive consideration in excess of par value for the issuance of the Class A Ordinary Shares, Warrant Shares and Pre-Funded Warrant Shares, (d) the Registration Statement becomes and remains effective, and the prospectus which is a part of the Registration Statement, and the prospectus delivery requirements with respect thereto, fulfill all of the requirements of the Securities Act, throughout all periods relevant to the opinion, (e) the Securities will be offered in the manner and on the terms identified or referred to in the Registration Statement, including all amendments thereto, and in the prospectus forming a part thereof; and (f) all offers and sales of the Securities will be made in compliance with the securities laws of the states having jurisdiction thereof.
Principal Robert CALDWELL Roy CHOI Michael FUNG Lewis HO Jeffrey KUNG Lynia LAU Shirley LAU Wallace LAU Alfred LEE Polly LIU Terence WONG
A Hong Kong firm of solicitors.
Los Angeles New York Chicago Nashville Washington, DC San Francisco Tysons Beijing Hong Kong www.loeb.com
For the United States offices, a limited liability partnership including professional corporations. For Hong Kong office, a limited liability partnership.
 | Page 2 |
Based upon the foregoing, and subject to the additional qualifications set forth below, we are of the opinion that:
1. the Warrants have been duly authorized for issuance and, when issued, sold and delivered by the Company in accordance with and in the manner described in the Registration Statement and the Securities Purchase Agreement, will be validly issued and will constitute a valid and binding obligation of the Company enforceable against the Company in accordance with its terms; and
2. the Pre-Funded Warrants have been duly authorized for issuance and, when issued, sold and delivered by the Company in accordance with and in the manner described in the Registration Statement and the Securities Purchase Agreement, will be validly issued and will constitute a valid and binding obligation of the Company enforceable against the Company in accordance with its terms.
The foregoing opinions are subject to (i) bankruptcy, insolvency, moratorium, fraudulent conveyance, fraudulent transfer and other similar laws affecting the rights and remedies of creditors generally, and (ii) constitutional and public policy limitations and general principles of equity (regardless of whether enforcement may be sought in a proceeding in equity or at law). In addition, we express no opinion as to: the right to collect any payment to the extent that such payment constitutes a penalty, premium, forfeiture or late payment charge; the enforceability of the governing law, consent to jurisdiction and forum selection provisions contained in any of the Transaction Documents; waivers of right to trial by jury or defense; or any purported right of indemnification or exculpation with respect to illegal acts, intentional torts, violation of securities laws, negligence or willful misconduct. No opinion is expressed herein as to compliance with or the effect of federal or state securities or blue sky laws.
The opinions expressed herein are limited exclusively to (i) the federal laws of the United States of America, and (ii) the laws of the State of New York as currently in effect, and we are expressing no opinion as to the effect of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference made to us under the caption “Legal Matters” in the prospectus constituting part of the Registration Statement. In giving this consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Act, the rules and regulations of the Securities and Exchange Commission promulgated thereunder or Item 509 of Regulation S-K promulgated under the Act.
| Very truly yours, | |
| /s/ Loeb & Loeb LLP | |
| Loeb & Loeb LLP |
Exhibit 10.8
SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this “Agreement”) is dated as of [●], 2026, between DarkIris Inc., an exempted company incorporated under the laws of the Cayman Islands (the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors and assigns, a “Purchaser” and collectively the “Purchasers”).
WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to an effective registration statement under the Securities Act (as defined below), the Company desires to issue and sell to each Purchaser, and each Purchaser, severally and not jointly, desires to purchase from the Company, securities of the Company as more fully described in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, the following terms shall have the meanings set forth in this Section 1.1:
“Acquiring Person” shall have the meaning ascribed to such term in Section 4.5.
“Action” means any action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority.
“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.
“Applicable Laws” means all applicable laws, statutes, rules, regulations, ordinances, judgments, orders and decrees of any Governmental Authority.
“Board of Directors” means the board of directors of the Company.
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home,” “shelter-in-place,” “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York are generally open for use by customers on such day.
“Cayman Counsel” means Appleby.
“Class A Ordinary Shares” means the Company’s Class A ordinary shares, par value US$0.0016 per share.
“Closing” means the closing of the purchase and sale of the Securities pursuant to Section 2.1.
“Closing Date” means the Trading Day on which all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii) the Company’s obligations to deliver the Securities have been satisfied or waived.
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“Commission” means the United States Securities and Exchange Commission.
“Common Warrants” means the Ordinary Share purchase warrants (in the form of Exhibit A attached hereto) delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which Common Warrants shall be exercisable immediately upon issuance and shall expire six (6) months following the date of issuance thereof in accordance with the terms thereof.
“Common Warrant Shares” means the Ordinary Shares issuable upon exercise of the Common Warrants.
“Company Counsel” means Loeb & Loeb LLP, with its office located at 10100 Santa Monica Boulevard, Suite 2200, Los Angeles.
“Disclosure Time” means (i) if this Agreement is signed on a day that is not a Trading Day or after 9:00 a.m. (New York City time) and before midnight (New York City time) on any Trading Day, 9:01 a.m. (New York City time) on the Trading Day immediately following the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent, and (ii) if this Agreement is signed between midnight (New York City time) and 9:00 a.m. (New York City time) on any Trading Day, no later than 9:01 a.m. (New York City time) on the date hereof, unless otherwise instructed as to an earlier time by the Placement Agent.
“DWAC” means Deposit/Withdrawal at Custodian.
“Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(t).
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Exempt Issuance” means the issuance of (a) Ordinary Shares or options to employees, officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose for services rendered to the Company; (b) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into Ordinary Shares issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities; and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 4.11 herein, and provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.
“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
“GAAP” means United States generally accepted accounting principles.
“Governmental Authority” means any federal, state, local, foreign or other governmental, quasi-governmental, judicial or regulatory authority.
“Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(q).
“Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
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“Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
“Material Permits” shall have the meaning ascribed to such term in Section 3.1(n).
“Maximum Warrant Shares” means Maximum Class A Ordinary Shares issuable pursuant to the Zero Exercise Price Option, subject to adjustment pursuant to the terms of the Warrants.
“Nasdaq” means The Nasdaq Capital Market.
“Offering” means the Company’s best-efforts public offering of up to [●] Units pursuant to the Registration Statement and Prospectus.
“Ordinary Shares” means the Class A ordinary shares of the Company, par value US$0.0016 per share.
“Ordinary Shares Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Ordinary Shares, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Ordinary Shares.
“Ordinary Units” means each ordinary unit consisting of (a) one Share and (b) one Common Warrant.
“Ordinary Unit Purchase Price” means US$[●] per Unit, subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Ordinary Shares that occur after the date of this Agreement; provided that the purchase price per Pre-Funded Warrant shall be the Ordinary Unit Purchase Price minus $[●].
“Per Unit Purchase Price” means US$[●] per Unit.
“Person” means any individual, corporation, partnership, trust, limited liability company, association, governmental authority or other entity.
“Placement Agent” means Prime Number Capital LLC.
“Placement Agent Counsel” means Ye & Associates, P.C.
“Pre-Funded Warrant” means, collectively, the Pre-Funded Ordinary Share purchase warrants delivered to the Purchasers at the Closing in accordance with Section 2.2(a) hereof, which Pre-Funded Warrants shall be exercisable immediately upon issuance and shall expire in accordance with the terms thereof, in the form of Exhibit B attached hereto.
“Pricing Prospectus” means the preliminary prospectus included in the Registration Statement immediately prior to execution of this Agreement.
“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.
“Prospectus” means the final prospectus filed with the Commission pursuant to Rule 424(b).
“Purchaser Party” shall have the meaning ascribed thereto in Section 4.8.
“Registration Statement” means the Company’s effective Registration Statement on Form F-1 (File No. 333- [●]), including all exhibits and financial statements and any prospectus supplement relating thereto.
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“Required Approvals” means all consents, approvals, authorizations and orders required for the consummation of the transactions contemplated by this Agreement, including the effectiveness of the Registration Statement and applicable Nasdaq notifications.
“Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.
“Rule 462(b) Registration Statement” means any registration statement prepared by the Company registering additional Securities, which was filed with the Commission on or prior to the date hereof and became automatically effective pursuant to Rule 462(b) promulgated by the Commission pursuant to the Securities Act.
“SEC Reports” means all reports, schedules, forms, statements and other documents filed by the Company with the Commission pursuant to the Securities Act or the Exchange Act, including the Registration Statement and the Prospectus, and all exhibits thereto and documents incorporated by reference therein.
“Securities” means the Ordinary Units, the Pre-Funded Warrants, the Common Warrants and the Common Warrant Shares.
“Securities Act” means the Securities Act of 1933, as amended.
“Shares” means the Ordinary Shares included in the Units.
“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing Ordinary Shares).
“Subscription Amount” means, with respect to each Purchaser, the aggregate purchase price to be paid by such Purchaser for the Securities purchased hereunder, as set forth on such Purchaser’s signature page.
“Subsidiary” shall have the meaning ascribed thereto in Section 3.1(a)..
“Trading Day” means a day on which Nasdaq is open for trading.
“Trading Market” means any of the following markets or exchanges on which the Ordinary Shares are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing).
“Transaction Documents” means this Agreement, the Pre-Funded Warrants and the Common Warrants, and all exhibits and schedules hereto and any other agreements or instruments executed in connection with the transactions contemplated hereby.
“Transfer Agent” means Transhare Corporation, or any successor transfer agent of the Company.
“Units” means the units offered by the Company, each consisting of one Ordinary Share and one Warrant.
“Warrants” means the warrants exercisable for Ordinary Shares issued as part of the Units.
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“Warrant Shares” means the Class A Ordinary Shares issuable upon any exercise of the Warrants, whether by cash exercise, cashless exercise or pursuant to the zero exercise price option provided therein, including, without limitation, all Class A Ordinary Shares issuable pursuant to the zero exercise price option in accordance with the formula, Floor Price, applicable limitations and other terms set forth in the Warrants, in each case as such number may be adjusted from time to time in accordance with the terms of the Warrants. The term “Warrant Shares” shall further include all additional Class A Ordinary Shares issuable as a result of any anti-dilution adjustment, stock split, stock dividend, recapitalization, reclassification, combination, merger, consolidation or other similar transaction affecting the Warrants or the Class A Ordinary Shares.
ARTICLE II
PURCHASE AND SALE
2.1 Closing. Subject to the terms and conditions set forth herein, at the Closing, the Company agrees to sell, and each Purchaser, severally and not jointly, agrees to purchase, such number of Units set forth opposite such Purchaser’s name on Annex A hereto at the Per Unit Purchase Price. Each Unit shall consist of: (a) one Ordinary Share; and (b) one Warrant. The Units shall immediately separate upon issuance and the Shares and Warrants shall be issued separately. The aggregate purchase price to be paid by each Purchaser for the Units purchased hereunder (the “Subscription Amount”) shall be set forth opposite such Purchaser’s name on Annex A hereto. On the Closing Date, each Purchaser shall deliver to the Company, via wire transfer of immediately available funds, its Subscription Amount, and the Company shall deliver to each Purchaser: (i) the Shares issuable to such Purchaser pursuant to this Agreement, registered in the name of such Purchaser (or its nominee) and delivered electronically through DWAC; and (ii) the Warrants issuable to such Purchaser pursuant to this Agreement. The Closing shall occur remotely via the electronic exchange of documents and signatures. Notwithstanding anything herein to the contrary, if at any time after the execution of this Agreement by a Purchaser and prior to the Closing, such Purchaser sells, assigns or otherwise transfers to any Person all or any portion of the Shares to be issued to such Purchaser hereunder (collectively, the “Pre-Settlement Shares”), such Purchaser shall nevertheless remain obligated to purchase such Pre-Settlement Shares at the Closing, and the Company shall remain obligated to issue such Pre-Settlement Shares to such Purchaser at the Closing, provided that the Company shall not be obligated to deliver any Shares until the Company has received payment in full for such Shares. The Company acknowledges and agrees that the foregoing shall not constitute a representation or covenant by any Purchaser regarding whether such Purchaser will sell any Shares prior to the Closing Date.
2.2 Deliveries.
(a) On or prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:
(i) this Agreement duly executed by the Company;
(ii) a legal opinion of Cayman Counsel and U.S. Counsel to the Company, in form and substance reasonably satisfactory to the Placement Agent;
(iii) the Company’s wire instructions, executed by the Chief Executive Officer or Chief Financial Officer of the Company;
(iv) irrevocable instructions to the Transfer Agent instructing the Transfer Agent to deliver via DWAC the Shares issuable to such Purchaser pursuant to this Agreement;
(v) a Pre-Funded Warrant registered in the name of such Purchaser to purchase up to a number of Ordinary Shares equal to such Purchaser’s Subscription Amount divided by the Per Unit Purchase Price (rounded down to the nearest whole Share), minus the number of Shares required to be delivered pursuant to Section 2.2(a)(iv), with an exercise price equal to $ [●], subject to adjustment therein;
(vi) the Pricing Prospectus and the Prospectus (which may be delivered in accordance with Rule 172 under the Securities Act);
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(vii) for each Purchaser, a Common Warrant registered in the name of such Purchaser to purchase up to a number of Ordinary Shares equal to 100% of such Purchaser’s Subscription Amount divided by the Ordinary Unit Purchase Price (rounded down to the nearest whole Share), with an exercise price equal to the Ordinary Unit Purchase Price, subject to adjustment therein; and
(viii) a certificate of the Chief Executive Officer of the Company certifying that the representations and warranties of the Company are true and correct as of the Closing Date.
(b) On or prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company:
(i) this Agreement duly executed by such Purchaser; and
(ii) such Purchaser’s Subscription Amount by wire transfer of immediately available funds in accordance with the Company’s wire instructions.
2.3 Closing Conditions.
(a) Conditions to the Obligations of the Company. The obligations of the Company hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) on the Closing Date of the representations and warranties of each Purchaser contained herein (unless such representation or warranty is as of a specific date therein in which case they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) as of such date);
(ii) all obligations, covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed; and
(iii) the delivery by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.
(b) Conditions to the Obligations of the Purchasers. The respective obligations of each Purchaser hereunder in connection with the Closing are subject to the following conditions being met:
(i) the accuracy in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) on the Closing Date of the representations and warranties of the Company contained herein (unless such representation or warranty is as of a specific date therein in which case they shall be accurate in all material respects (or, to the extent representations or warranties are qualified by materiality or Material Adverse Effect, in all respects) as of such date);
(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;
(iii) the delivery by the Company of the items set forth in Section 2.2(a);
(iv) there shall have been no Material Adverse Effect with respect to the Company since the date hereof;
(v) trading in the Ordinary Shares shall not have been suspended by the Commission or Nasdaq;
(vi) the Registration Statement shall remain effective and no stop order suspending the effectiveness thereof shall have been issued;
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(vii) the Shares and Warrant Shares shall have been approved for listing on Nasdaq, subject only to official notice of issuance; and
(viii) no governmental authority shall have enacted, issued or entered any order which prohibits the consummation of the transactions contemplated hereby.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to each Purchaser as of the date hereof and as of the Closing Date, except as set forth in the SEC Reports, which disclosures shall be deemed a part hereof and shall qualify any representation or warranty made herein to the extent of the disclosure contained therein:
| (a) | Subsidiaries. Each of the Company’s direct and indirect subsidiaries as defined under Rule 405 (each a “Subsidiary” and collectively, the “Subsidiaries”) has been identified on Schedule 3.1(a) hereto . Each of the Subsidiaries has been duly incorporated, is validly existing as a corporation in good standing under the laws of the jurisdiction of its incorporation, has the corporate power and authority to own its property and to conduct its business as described in the Prospectus and SEC Reports; all of the equity interests of each Subsidiary have been duly and validly authorized and issued, are owned directly or indirectly by the Company, are fully paid and non-assessable and, are free and clear of all liens, encumbrances, equities or claims. None of the outstanding share capital or equity interest in any Subsidiary was issued in violation of pre-emptive or similar rights of any security holder of such Subsidiary. All of the constitutive or organizational documents of each of the Subsidiaries comply with the requirements of Applicable Laws of its jurisdiction of incorporation or organization and are in full force and effect. Apart from the Subsidiaries identified on Schedule 3.1(a) hereto, the Company has no direct or indirect Subsidiaries. |
| (b) | Organization and Qualification. The Company is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification. |
| (c) | Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by Applicable Law. |
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| (d) | No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect. |
| (e) | Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other governmental authority in connection with the execution, delivery and performance of the Transaction Documents, other than: (i) filings required by the Commission; (ii) filings required by Nasdaq; (iii) applicable state securities or Blue Sky filings; and (iv) such consents, waivers, authorizations or filings that have been obtained or made. |
| (f) | Issuance of Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Pre-Funded Warrant Shares, when issued in accordance with the terms of the Pre-Funded Warrants, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Warrant Shares, when issued in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of Ordinary Shares issuable pursuant to this Agreement and the Warrants, including the Maximum Warrant Shares issuable pursuant to the Zero Exercise Price Option and any additional Ordinary Shares issuable pursuant to the anti-dilution adjustment provisions contained in the Warrants. The Company has prepared and filed the Registration Statement in conformity with the requirements of the Securities Act, which became effective on [●], 2026 (the “Effective Date”), including the Prospectus, and such amendments and supplements thereto as may have been required to the date of this Agreement. The Registration Statement is effective under the Securities Act and no stop order preventing or suspending the effectiveness of the Registration Statement or suspending or preventing the use of the Prospectus has been issued by the Commission and no proceedings for that purpose have been instituted or, to the knowledge of the Company, are threatened by the Commission. The Company, if required by the rules and regulations of the Commission, shall file the Prospectus supplement with the Commission pursuant to Rule 424(b). At the time the Registration Statement and any amendments thereto became effective, at the date of this Agreement and at the Closing Date, the Registration Statement and any amendments thereto conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading; and the Prospectus, and any amendments or supplements thereto, at the time the Prospectus, or any amendment or supplement thereto was issued and at the Closing Date, conformed and will conform in all material respects to the requirements of the Securities Act and did not and will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. |
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| (g) | Capitalization. The authorized share capital of the Company is as set forth in the SEC Reports. The Company has issued and outstanding share capital consisting of Class A Ordinary Shares and Class B Ordinary Shares as disclosed in the SEC Reports. All outstanding Ordinary Shares have been duly authorized, validly issued, fully paid and non-assessable and were issued in compliance with all applicable securities laws. Except as disclosed in the SEC Reports, including with respect to the Warrants issued in connection with the Offering, there are no outstanding options, warrants, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, any shares of capital stock of the Company. The Company has reserved from its duly authorized share capital a sufficient number of Ordinary Shares for issuance pursuant to this Agreement and upon exercise of the Warrants, including pursuant to the zero exercise price option (as defined in the Warrant) and any anti-dilution adjustments provided therein. The issuance of the Securities contemplated hereby will not obligate the Company to issue Ordinary Shares or other securities to any Person other than the Purchasers and will not trigger any anti-dilution or price-reset provision under any existing agreement, except as disclosed in the SEC Reports. No Person has any preemptive rights, rights of first refusal or other similar rights to subscribe for or purchase securities of the Company arising by reason of the issuance of the Securities contemplated hereby. |
| (h) | SEC Reports; Registration Statement. The Company has filed all SEC Reports required to be filed by it under the Securities Act and the Exchange Act during the preceding twelve (12) months (or such shorter period as the Company was required to file such reports). As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act applicable thereto. None of the SEC Reports, at the time they were filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. The Registration Statement is effective under the Securities Act and no stop order suspending the effectiveness of the Registration Statement has been issued by the Commission and no proceedings for that purpose have been initiated or, to the knowledge of the Company, threatened by the Commission. The financial statements included in the SEC Reports comply in all material respects with applicable accounting requirements under GAAP and the rules and regulations of the Commission applicable with respect thereto as in effect at the time of filing. Such financial statements fairly present in all material respects the consolidated financial position of the Company and its Subsidiaries as of the dates thereof and the consolidated results of operations and cash flows for the periods then ended. The Company’s auditor is a public accounting firm registered with the PCAOB as required by the Sarbanes-Oxley Act and applicable PCAOB rules. All material terms of the Warrants and the potential dilutive impact thereof, including the zero exercise price option, have been disclosed in the SEC Reports. |
| (i) | Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included in the SEC Reports, except as specifically disclosed in the SEC Reports: (i) there has not been any Material Adverse Effect; (ii) the Company has not incurred any liabilities or obligations, direct or contingent, other than liabilities incurred in the ordinary course of business consistent with past practice; (iii) the Company has not altered its method of accounting; (iv) the Company has not declared or made any dividend or distribution of cash or other property to its shareholders; (vi) the Company has not issued any equity securities other than pursuant to employee equity incentive arrangements disclosed in the SEC Reports; and (vii) no event, liability, fact, circumstance, occurrence or development has occurred or exists with respect to the Company or its Subsidiaries or their respective businesses, properties, operations or financial condition that would be required to be disclosed by the Company under applicable securities laws and which has not been publicly disclosed. |
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| (j) | Litigation. There is no Action pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties or assets: (a) which would reasonably be expected to result in a Material Adverse Effect; or (b) which would reasonably be expected to materially and adversely affect the legality, validity or enforceability of any Transaction Document or the consummation of the transactions contemplated hereby. Neither the Company nor any Subsidiary is subject to any judgment, decree, injunction, rule or order of any governmental authority having, or which would reasonably be expected to have, a Material Adverse Effect. To the knowledge of the Company, there are no investigations, inquiries or proceedings pending or threatened by Nasdaq, the Commission, any Hong Kong governmental authority, any PRC governmental authority or any other regulatory authority against the Company or any Subsidiary which would reasonably be expected to result in a Material Adverse Effect. Except as disclosed in the SEC Reports, neither the Company nor any Subsidiary is a party to or subject to any order, writ, injunction or decree of any court or governmental authority that would be required to be disclosed under applicable securities laws. |
| (k) | Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company, such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non- competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all Applicable Laws relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. |
| (l) | Compliance. The Company and each Subsidiary is and has been in compliance with all applicable laws, rules, regulations, judgments, orders and decrees of all governmental authorities, including, without limitation, applicable securities laws, Nasdaq rules and regulations, anti-money laundering laws, anti-corruption laws and sanctions laws, except where the failure to be in compliance would not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary has received any written notice from any governmental authority alleging any material violation of any Applicable Law, rule or regulation that has not been cured or otherwise resolved. The Company is in compliance in all material respects with the applicable listing and corporate governance requirements of Nasdaq and has not received any notice from Nasdaq regarding the delisting or threatened delisting of the Ordinary Shares. |
| (m) | Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect. |
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| (n) | Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the Prospectus and the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit. |
| (o) | Law and Permits. The Company and each Subsidiary possess all permits, licenses, approvals, consents, registrations, certificates and other authorizations issued by the appropriate governmental authorities necessary to conduct their respective businesses as currently conducted, except where the failure to possess the same would not reasonably be expected to result in a Material Adverse Effect. The Company and each Subsidiary are in compliance with the terms and conditions of all such permits, licenses, approvals, consents and authorizations, except where the failure to so comply would not reasonably be expected to result in a Material Adverse Effect. All such permits, licenses, approvals, consents and authorizations are valid and in full force and effect, except where the failure to be valid and in full force and effect would not reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary has received any written notice of any proceeding relating to the revocation, suspension, modification or limitation of any such permits, licenses, approvals, consents or authorizations which, if determined adversely to the Company or such Subsidiary, would reasonably be expected to result in a Material Adverse Effect. |
| (p) | Title to Assets. The Company and the Subsidiaries do not own any real property. The Company and the Subsidiaries have good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens arising under any credit facility, (ii) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (iii) Liens for the payment of foreign, federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance in all material respects. |
| (q) | Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the Prospectus and the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement, except as would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the Prospectus and the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. |
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| (r) | Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost. |
| (s) | Transactions With Affiliates and Employees. Except as disclosed in the SEC Reports, no current or former officer, director, employee, shareholder or Affiliate of the Company or any Subsidiary, or any family member thereof, is presently a party to any transaction with the Company or any Subsidiary that would be required to be disclosed in the SEC Reports pursuant to applicable securities laws. Except as disclosed in the SEC Reports, there are no outstanding loans, advances, guarantees or other extensions of credit made by the Company or any Subsidiary to or for the benefit of any current or former officer, director, employee, shareholder or Affiliate of the Company or any Subsidiary. All related-party transactions required to be disclosed in the SEC Reports have been so disclosed. Neither the Company nor any Subsidiary is a party to any employment, consulting, severance, retention or change-in-control agreement with any executive officer or director, except as disclosed in the SEC Reports. |
| (t) | Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in material compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries. |
| (u) | Certain Fees. Except as set forth in the Pricing Prospectus and the Prospectus, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents. |
| (v) | Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended. |
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| (w) | Registration Statement Maintenance. The Company shall use commercially reasonable efforts to maintain the effectiveness of the Registration Statement and to keep the Registration Statement available for the issuance and resale of the Securities, including the Warrant Shares, until all Warrants have expired or been exercised in full. |
| (x) | Nasdaq Listing. The Ordinary Shares are listed on The Nasdaq Capital Market under the symbol “DKI,” and other than as disclosed in the SEC Reports, the Company has not received any notice from Nasdaq regarding the delisting or threatened delisting of the Ordinary Shares. The Company is in compliance in all material respects with the applicable listing and maintenance requirements of Nasdaq and is not aware of any facts or circumstances that would reasonably be expected to result in the delisting or suspension of the Ordinary Shares from Nasdaq. The issuance of the Securities contemplated hereby, including the issuance of the Warrant Shares upon exercise of the Warrants, does not violate the rules or regulations of Nasdaq and does not require shareholder approval under Nasdaq rules. The Company has taken no action designed to, or reasonably likely to have the effect of, terminating the registration of the Ordinary Shares under the Exchange Act or delisting the Ordinary Shares from Nasdaq. The Shares and Warrant Shares have been approved for listing on Nasdaq, subject only to official notice of issuance. |
| (y) | Disclosure. The Company shall, on or before 9:00 a.m. (New York City time) on the first Trading Day immediately following the date hereof, issue a press release and/or furnish a Form 6-K or other applicable filing with the Commission reasonably disclosing the material terms of the transactions contemplated hereby. The Company confirms that neither it nor any other Person acting on its behalf has provided any Purchaser or its agents or counsel with any material non-public information regarding the Company or its Subsidiaries other than information that will be disclosed pursuant to the immediately preceding sentence. The Company understands and confirms that each Purchaser will rely on the foregoing representations in effecting transactions in securities of the Company. The Company shall not identify any Purchaser by name in any public filing or disclosure without such Purchaser’s prior written consent, except as required by applicable law or Commission regulations. |
| (z) | No Integrated Offering. Assuming the accuracy of the Purchasers’ representations and warranties set forth herein, neither the Company nor any Person acting on its behalf has directly or indirectly made any offers or sales of securities nor solicited any offers to buy any security under circumstances that would require integration of the Offering with the transactions contemplated hereby for purposes of the Securities Act or Nasdaq rules. |
| (aa) | Solvency. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder: (i) the fair value of the Company’s assets exceeds the amount of its liabilities, contingent or otherwise;(ii) the present fair saleable value of the Company’s assets is greater than the amount required to pay the probable liabilities of the Company on its debts as they become absolute and matured; (iii) the Company does not intend to incur, and does not believe that it will incur, debts beyond its ability to pay such debts as they become due; and (iv) the Company is not engaged in any business or transaction, and does not intend to engage in any business or transaction, for which its remaining assets would constitute unreasonably small capital. The Company is not entering into the transactions contemplated hereby with the intent to hinder, delay or defraud any creditor of the Company. |
| (bb) | Tax Status. The Company and each Subsidiary has timely filed all material tax returns required to be filed by any governmental authority having jurisdiction over the Company or such Subsidiary, except where the failure to so file would not reasonably be expected to result in a Material Adverse Effect. The Company and each Subsidiary has paid all material taxes, assessments, governmental charges and penalties due and payable, except for any such taxes being contested in good faith and for which adequate reserves have been established in accordance with GAAP or where the failure to pay would not reasonably be expected to result in a Material Adverse Effect. There are no material unpaid taxes in any claim, audit, action, suit, proceeding or investigation pending against the Company or any Subsidiary by any governmental authority. No material tax deficiency has been asserted or, to the knowledge of the Company, threatened against the Company or any Subsidiary which has not been adequately reserved for in the financial statements included in the SEC Reports. There are no material liens for taxes upon the assets of the Company or any Subsidiary other than liens for current taxes not yet due and payable. |
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| (cc) | Accountants. Enrome LLP, whose report on the consolidated financial statements of the Company is included in the SEC Reports, is an independent registered public accounting firm with respect to the Company within the meaning of the Securities Act and the applicable rules and regulations of the Commission and the PCAOB. To the knowledge of the Company, Enrome LLP is duly registered with the PCAOB and is not subject to any sanction, suspension or proceeding by the PCAOB or the Commission that would reasonably be expected to impair its ability to serve as the Company’s independent registered public accounting firm. The Company has not received any written notice from the PCAOB, the Commission or any governmental authority challenging the eligibility or independence of Enrome LLP with respect to the financial statements included in the SEC Reports. The audited financial statements included in the SEC Reports have been prepared in accordance with GAAP applied on a consistent basis throughout the periods involved, except as may be otherwise specified therein. |
| (dd) | Acknowledgment Regarding Purchasers’ Purchase of Securities. The Company acknowledges and agrees that each of the Purchasers is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives. |
| (ee) | Acknowledgment Regarding Trading Activity. The Company acknowledges that the Purchasers may engage in ordinary course trading activities with respect to the Company’s securities in compliance with applicable securities laws and regulations. |
| (ff) | Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Placement Agent in connection with the placement of the Securities. |
| (gg) | Scheme or Arrangement with Shareholders. Neither the Company nor any of its Subsidiaries is a party to any scheme or arrangement through which shareholders or potential shareholders are being loaned, given or otherwise having money made available for the purchase of shares whether before, in or after the sale of Shares under this Agreement. Neither the Company nor any of its Subsidiaries is aware of any such scheme or arrangement, regardless of whether it is a party to a formal agreement. |
| (hh) | Office of Foreign Assets Control. Neither the Company nor any Subsidiary, nor, to the Company’s knowledge, any director, officer, agent, employee or Affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”). |
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| (ii) | Certificates. On the Closing Date, the Placement Agent shall have received certificates in substantially the same form as those issued to the underwriters in connection with the Company’s initial public offering, including (i) a certificate from the Chief Executive Officer and Chief Financial Officer of the Company (the “Officers’ Certificate”); and (ii) a certificate signed by an officer of the Company (the “Incumbency Certificate”). |
| (jj) | Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened. |
| (kk) | Foreign Private Issuer. The Company is a “foreign private issuer” as defined in Rule 405 promulgated under the Securities Act. |
3.2 Representations and Warranties of the Purchasers. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein, in which case they shall be accurate as of such date):
| (a) | Organization; Authority. Such Purchaser is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with full power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution, delivery and performance by such Purchaser of the Transaction Documents to which it is a party have been duly authorized by all necessary corporate, partnership, limited liability company or similar action on the part of such Purchaser. Each Transaction Document to which such Purchaser is a party has been duly executed by such Purchaser and, when delivered by such Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against such Purchaser in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles. |
| (b) | Understandings or Arrangements. Such Purchaser is acquiring the Securities as principal for its own account and has no direct or indirect arrangement or understanding with any other Person to distribute or regarding the distribution of the Securities in violation of the Securities Act. Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or meeting. |
| (c) | Purchaser Status. At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, an “accredited investor” as defined in Rule 501(a) under the Securities Act. |
| (d) | Experience of Such Purchaser. Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in financial and business matters as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment. |
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| (e) | Access to Information. Such Purchaser acknowledges that it has had the opportunity to review the Transaction Documents (including all exhibits and schedules thereto), the Prospectus and the SEC Reports and has been afforded, (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the offering of the Securities and the merits and risks of investing in the Securities; (ii) access to information about the Company and its financial condition, results of operations, business, properties, management and prospects sufficient to enable it to evaluate its investment; and (iii) the opportunity to obtain such additional information that the Company possesses or can acquire without unreasonable effort or expense that is necessary to make an informed investment decision with respect to the investment. Such Purchaser acknowledges and agrees that neither the Placement Agent nor any Affiliate of the Placement Agent has provided such Purchaser with any information or advice with respect to the Securities nor is such information or advice necessary or desired. Neither the Placement Agent nor any Affiliate has made or makes any representation as to the Company or the quality of the Securities and the Placement Agent and any Affiliate may have acquired non-public information with respect to the Company which such Purchaser agrees need not be provided to it. In connection with the issuance of the Securities to such Purchaser, neither the Placement Agent nor any of its Affiliates has acted as a financial advisor or fiduciary to such Purchaser. |
| (f) | Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, such Purchaser has not, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement or to such Purchaser’s representatives, including, without limitation, its officers, directors, partners, legal and other advisors, employees, agents and Affiliates, such Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding the foregoing, for the avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any actions, with respect to locating or borrowing shares in order to effect Short Sales or similar transactions in the future. |
| (g) | No Conflicts. The execution, delivery and performance by such Purchaser of the Transaction Documents to which such Purchaser is a party and the consummation by such Purchaser of the transactions contemplated hereby and thereby will not: (i) conflict with or violate any provision of such Purchaser’s organizational documents; (ii) violate any Applicable Law; or (iii) result in a breach of any agreement to which such Purchaser is a party, except, in the case of clauses (ii) and (iii), where such conflict, violation or breach would not reasonably be expected to materially impair such Purchaser’s ability to perform its obligations hereunder. |
| (h) | Reliance. Such Purchaser has relied solely upon the SEC Reports, the Registration Statement, the Prospectus and independent investigations made by such Purchaser and its representatives in making its decision to purchase the Securities. Such Purchaser acknowledges that neither the Company nor the Placement Agent nor any of their respective Affiliates or representatives has made any representation or warranty to such Purchaser other than as expressly set forth in the Transaction Documents. |
| (i) | No Governmental Review. Such Purchaser understands that no United States federal or state agency or any other governmental authority has passed upon or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities. |
| (j) | Residency. The residence or principal place of business of such Purchaser is as set forth under such Purchaser’s name on the signature pages attached hereto. |
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| (k) | Short Sales. Such Purchaser represents and warrants that neither it nor any Affiliate acting on its behalf nor any Person acting pursuant to any understanding with such Purchaser has engaged in any Short Sales involving the Company’s securities prior to the public announcement of the Offering. |
| (l) | No General Solicitation. Such Purchaser did not learn of the Offering through any form of general solicitation or general advertising prohibited under the Securities Act. |
The Company acknowledges and agrees that the representations and warranties contained in this Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any other Transaction Document. Notwithstanding the foregoing, nothing contained herein shall prohibit any Purchaser from engaging in customary securities lending, borrowing or hedging activities in compliance with applicable securities laws and Nasdaq rules following the public disclosure of the Offering.
ARTICLE IV
OTHER AGREEMENTS OF THE PARTIES
4.1 Warrant Shares. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the issuance or resale of the Warrant Shares or if the Warrant is exercised via cashless exercise or zero exercise price option, the Warrant Shares issued pursuant to any such exercise shall be issued free of all legends. If at any time following the date hereof the Registration Statement (or any subsequent registration statement registering the sale or resale of the Warrant Shares) is not effective or is not otherwise available for the sale or resale of the Warrant Shares, the Company shall immediately notify the holders of the Warrants in writing that such registration statement is not then effective and thereafter shall promptly notify such holders when the registration statement is effective again and available for the sale or resale of the Warrant Shares (it being understood and agreed that the foregoing shall not limit the ability of the Company to issue, or any Purchaser to sell, any of the Warrant Shares in compliance with applicable federal and state securities laws). The Company shall use its reasonable efforts to keep a registration statement (including the Registration Statement) registering the issuance or resale of the Warrant Shares effective during the term of the Warrants.
4.2 Furnishing of Information. Until the earliest of the time that (i) no Purchaser owns Securities or (ii) the Warrants have expired, the Company covenants to use its reasonable efforts to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.
4.3 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
4.4 Securities Laws Disclosure; Publicity. The Company shall (a) by the Disclosure Time, issue a press release disclosing the material terms of the transactions contemplated hereby, and (b) file a Report of Foreign Private Issuer on Form 6-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such press release, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. In addition, effective upon the issuance of such press release, the Company acknowledges and agrees that any and all confidentiality or similar obligations under any agreement, whether written or oral, between the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates on the one hand, and any of the Purchasers or any of their Affiliates on the other hand, shall terminate. The Company and each Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor any Purchaser shall issue any such press release nor otherwise make any such public statement without the prior written consent of the Company, with respect to any press release of any Purchaser, or without the prior written consent of each Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers with prior notice of such disclosure permitted pursuant to this sentence.
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4.5 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchasers.
4.6 Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, which shall be disclosed pursuant to Section 4.4, the Company covenants and agrees that neither it, nor any other Person acting on its behalf will provide any Purchaser or its agents or counsel with any information that constitutes, or the Company reasonably believes constitutes, material non-public information, unless prior thereto such Purchaser shall have consented to the receipt of such information and agreed with the Company to keep such information confidential. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company. To the extent that the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates delivers any material, non-public information to a Purchaser without such Purchaser’s consent, the Company hereby covenants and agrees that such Purchaser shall not have any duty of confidentiality to the Company, any of its Subsidiaries, or any of their respective officers, directors, agents, employees or Affiliates, or a duty to the Company, any of its Subsidiaries or any of their respective officers, directors, agents, employees or Affiliates not to trade on the basis of, such material, non-public information, provided that the Purchaser shall remain subject to Applicable Law. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Report of Foreign Private Issuer on Form 6-K. The Company understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
4.7 Use of Proceeds. The Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and shall not use such proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the ordinary course of the Company’s business and prior practices), (b) for the redemption of any Ordinary Shares or Ordinary Shares Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.
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4.8 Indemnification of Purchasers. The Company will indemnify and hold each Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”) harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity (including a Purchaser Party’s status as an investor), or any of them or their respective Affiliates, by the Company or any stockholder of the Company who is not an Affiliate of such Purchaser Party, arising out of or relating to any of the transactions contemplated by the Transaction Documents. For the avoidance of doubt, the indemnification provided herein is intended to, and shall also cover, direct claims brought by the Company against the Purchaser Parties; provided, however, that such indemnification shall not cover any loss, claim, damage or liability to the extent it is finally judicially determined to be attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by such Purchaser Party in any Transaction Document or any conduct by a Purchaser Party which is finally judicially determined to constitute fraud, gross negligence or willful misconduct. If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and, except with respect to direct claims brought by the Company, the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel to the applicable Purchaser Party (which may be internal counsel), a material conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed. In addition, if any Purchaser Party takes actions to collect amounts due under any Transaction Documents or to enforce the provisions of any Transaction Documents, then the Company shall pay the costs incurred by such Purchaser Party for such collection, enforcement or action, including, but not limited to, attorneys’ fees and disbursements. The indemnification and other payment obligations required by this Section 4.8 shall be made by periodic payments of the amount thereof during the course of the investigation, defense, collection, enforcement or action, as and when bills are received or are incurred; provided, that if any Purchaser Party is finally judicially determined not to be entitled to indemnification or payment under this Section 4.8 such Purchaser Party shall promptly reimburse the Company for any payments that are advanced under this sentence. The indemnity agreements contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
4.9 Reservation of Shares. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of Ordinary Shares for the purpose of enabling the Company to issue Shares pursuant to this Agreement and Pre-Funded Warrant Shares pursuant to any exercise of the Pre-Funded Warrants and Common Warrant Shares pursuant to any exercise of the Common Warrants.
4.10 Listing of Ordinary Shares. The Company hereby agrees to use commercially reasonable efforts to maintain the listing or quotation of the Ordinary Shares on the Trading Market on which it is currently listed, and prior to the Closing, the Company shall apply to list or quote all of the Shares, the Pre-Funded Warrant Shares and Common Warrant Shares on such Trading Market and promptly secure the listing of all of the Shares and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Ordinary Shares traded on any other Trading Market, it will then include in such application all of the Shares, the Pre-Funded Warrant Shares and Common Warrant Shares, and will take such other action as is necessary to cause all of the Shares and Warrant Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing and trading of its Ordinary Shares on a Trading Market and will comply in all material respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Ordinary Shares for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.
4.11 Reserved.
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4.12 Equal Treatment of Purchasers. No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of the Transaction Documents unless the same consideration is also offered to all of the parties to the Transaction Documents. For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.
4.13 Certain Transactions and Confidentiality. Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the initial press release as described in Section 4.4, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and the information included in the Disclosure Schedules. Notwithstanding the foregoing and notwithstanding anything contained in this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly announced pursuant to the initial press release as described in Section 4.4 and (iii) no Purchaser shall have any duty of confidentiality or duty not to trade in the securities of the Company to the Company or its Subsidiaries after the issuance of the initial press release as described in Section 4.4. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement.
4.14 Exercise Procedures. The form of Notice of Exercise included in the Warrants set forth the totality of the procedures required of the Purchasers in order to exercise the Warrants. No additional legal opinion, other information or instructions shall be required of the Purchasers to exercise their Warrants. Without limiting the preceding sentences, no ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise form be required in order to exercise the Warrants. The Company shall honor exercises of the Warrants and shall deliver Warrant Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.
4.15 Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding Ordinary Shares, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Shares and Warrant Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.
4.16 Restrictions on Promotion and Solicitation. Each Purchaser, severally and not jointly, covenants and agrees that neither it nor any of its Affiliates, nor any Person acting on its behalf or at its direction, shall, directly or indirectly: (a) promote, publicize, or advertise the Company’s securities (including the Ordinary Shares) on any social media platform, online forum, messaging application, or other electronic communication channel; (b) solicit, introduce, encourage, or induce any other Person to purchase the Company’s securities in the open market or otherwise; or (c) engage in any coordinated trading activity, including but not limited to organizing or participating in any group, campaign, or scheme designed to influence the trading price or volume of the Company’s securities. This restriction shall apply from the date of this Agreement until the earlier of (i) the date that is six (6) months following the Closing Date and (ii) the date on which such Purchaser no longer holds any Securities. For the avoidance of doubt, this Section 4.16 shall not prohibit any Purchaser from (x) selling or otherwise disposing of Securities in compliance with applicable securities laws in ordinary brokerage transactions or (y) making any required regulatory filings or disclosures.
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ARTICLE V
MISCELLANEOUS
5.1 Termination. This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing has not been consummated on or before the fifth (5th) Trading Day following the date hereof; provided, however, that no such termination will affect the right of any party to sue for any breach by any other party (or parties).
5.2 Fees and Expenses. Except as expressly set forth in the Transaction Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, transfer agent fees, Depositary Fees, DTC fees or broker’s commissions (other than for Persons engaged by any Purchaser) relating to or arising out of the transactions contemplated hereby (including, without limitation, (x) any fees or commissions payable to the Placement Agent, who are the Company’s sole placement agents in connection with the transactions contemplated by this Agreement and (y) any fees required for same-day processing of any instruction letter delivered by the Company and any exercise notice delivered by a Purchaser, and any stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchasers. The Company shall pay, and hold each Purchaser harmless against, any liability, loss or expense (including, without limitation, reasonable attorneys’ fees and out-of-pocket expenses) arising in connection with any claim relating to any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Purchasers.
5.3 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
5.4 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email attachment at the email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto. To the extent that any notice provided pursuant to any Transaction Document constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Report on Form 6-K.
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5.5 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and Purchasers which purchased (a) if on or prior to the Closing Date, 100% or (b) if after the Closing Date, at least 50.1%, as applicable, in interest of the Shares based on the initial Subscription Amounts hereunder or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.
5.6 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser (other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”
5.8 No Third-Party Beneficiaries. The Placement Agent shall be the third party beneficiary of the representations and warranties of the Company in Section 3.1 and the representations and warranties of the Purchasers in Section 3.2. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.8 and this Section 5.8
5.9 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action or Proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.8, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.
5.10 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.
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5.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
5.12 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
5.13 Rescission Rights. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that, in the case of a rescission of an exercise of a Pre-Funded Warrants or Common Warrant, the applicable Purchaser shall be required to return any Ordinary Shares subject to any such rescinded exercise notice concurrently with the return to such Purchaser of the aggregate exercise price paid to the Company for such shares and the restoration of such Purchaser’s right to acquire such shares pursuant to such Purchaser’s Pre-Funded Warrant or Common Warrant (including, issuance of a replacement warrant certificate evidencing such restored right), as applicable .
5.14 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities
5.15 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any Action for specific performance of any such obligation the defense that a remedy at law would be adequate.
5.16 Payment Set Aside. To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
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5.17 Independent Nature of Purchasers’ Obligations and Rights. The obligations of each Purchaser under any Transaction Document are several and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents. Each Purchaser shall be entitled to independently protect and enforce its rights including, without limitation, the rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser to be joined as an additional party in any Proceeding for such purpose. Each Purchaser has been represented by its own separate legal counsel in its review and negotiation of the Transaction Documents. The Company has elected to provide all Purchasers with the same terms and Transaction Documents for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers. It is expressly understood and agreed that each provision contained in this Agreement and in each other Transaction Document is between the Company and a Purchaser, solely, and not between the Company and the Purchasers collectively and not between and among the Purchasers.
5.19 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.20 Construction. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and Ordinary Shares in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Ordinary Shares that occur after the date of this Agreement.
5.21 Sales During Pre-Settlement Period. Notwithstanding anything herein to the contrary, if at any time on or after the time of execution of this Agreement by the Company and an applicable Purchaser, through, and including the time immediately prior to the Closing (the “Pre-Settlement Period”), such Purchaser sells to any Person all, or any portion, of any Shares to be issued hereunder to such Purchaser at the Closing (collectively, the “Pre-Settlement Shares”), such Purchaser shall, automatically hereunder (without any additional required actions by such Purchaser or the Company), be deemed to be unconditionally bound to purchase, and the Company shall be deemed unconditionally bound to sell, such Pre-Settlement Shares to such Purchaser at the Closing; provided, that the Company shall not be required to deliver any Pre-Settlement Shares to such Purchaser prior to the Company’s receipt of the purchase price of such Pre-Settlement Shares hereunder; and provided further that the Company hereby acknowledges and agrees that the forgoing shall not constitute a representation or covenant by such Purchaser as to whether or not during the Pre-Settlement Period such Purchaser shall sell any Shares to any Person and that any such decision to sell any Shares by such Purchaser shall be made, in the sole discretion of such Purchaser, at the time such Purchaser elects to effect any such sale, if any.
5.22 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
[Signature Pages Follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
| DARKIRIS INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
Address for Notice:
With a copy to (which shall not constitute notice):
Loeb & Loeb LLP
10100 Santa Monica Boulevard Suite 2200
Los Angeles, CA 90067
Attention: Lawrence S. Venick, Esq.
Tel: 1 310 728-5129
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK SIGNATURE PAGE FOR PURCHASER FOLLOWS]
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[PURCHASER SIGNATURE PAGES TO DARKIRIS INC.
SECURITIES PURCHASE AGREEMENT]
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
Name of Purchaser: ________________________________________________________
Signature of Authorized Signatory of Purchaser: __________________________
Name of Authorized Signatory: ____________________________________________
Title of Authorized Signatory: _____________________________________________
Email Address of Authorized Signatory: __________________________________
Address for Notice to Purchaser:
Address for Delivery of Securities to Purchaser (if not same as address for notice):
Subscription Amount: US$[●]
Ordinary Units: [●]
Pre-Funded Units: [●]
Beneficial Ownership Blocker ☐ 4.99% or ☐ 9.99%
EIN Number: ________________________________________________________
[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]
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Schedule 3.1(a)
Subsidiaries
The Company’s subsidiaries are as disclosed in the SEC Reports.
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Exhibit A
Form of Common Warrant
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Exhibit B
Form of Pre-Funded Warrant
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Exhibit 21.1
List of Subsidiaries
| Subsidiary | Place of Incorporation | |
| Quantum Arts Co., Limited | Hong Kong | |
| Hongkong Stellar Wisdom Co., Limited | Hong Kong | |
| DarkIris Digital Technology (Xiamen) Co., Ltd. | PRC | |
| Aether Intelligence Pte. Ltd. | Singapore | |
| DarkIris US Inc. | Delaware, US |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form F-1 of DARKIRIS INC. (the “Company”) of our report dated on January 30, 2026, relating to the financial statements, which appears in the annual report on Form 20-F of the Company for the year ended September 30, 2025.
/s/ Enrome LLP
Enrome LLP
Singapore
September 30, 2026