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The Company is authorized to issue unlimited ordinary shares. Holders of the Company’s ordinary shares are entitled to one vote for each share.
On July 6, 2018, the Company and certain institutional investors entered into a securities purchase agreement (“Private Placement”), pursuant to which the Company agreed to sell to such investors an aggregate of 769,232 ordinary shares together with Series A warrants to purchase a total of 576,924 ordinary shares (the “Series A Warrants”), for gross proceeds of approximately $2.0 million. Each investor will receive a Series A Warrant to purchase a number of shares equal to 75% of the number of ordinary shares the investor purchases in the offering with a warrant term of four (4) years. The purchase price for each ordinary share and the related Series A Warrants is $2.60. The Series A Warrants have an exercise price of $2.60. In connection with the offering, the investors also received Series B warrants with an initial face amount of 200,000 ordinary shares, which are subject to adjustment not in excess of an aggregate of 462,843 ordinary shares (the “Series B Warrants”) for nominal consideration. If on the 30th day after the closing date of the transaction (the “Adjustment Date”), the closing bid price of the Company’s ordinary shares is less than $2.60, the investors shall have the right to exercise the Series B Warrants and the number of ordinary shares to be issued to the investors upon exercise of the Series B Warrants shall be adjusted (upward or downward, as necessary) based on the closing bid price of the Company’s ordinary shares on such date. The closing of the offering took place on July 10, 2018. On August 9, 2018, the closing bid price of the Company’s ordinary shares was $1.29, and thus the Series B Warrant was exercised for 390,579 ordinary shares.
As of December 31, 2019 and 2018, there were 25,287,851 and 25,288,003 ordinary shares issued and outstanding, respectively.
Ordinary Shares Held in Escrow
Upon consummation of the business combination between the Company and Adrie, an aggregate of 20 million ordinary shares were issued and 8 million of the issued ordinary shares were deposited in escrow (the “Escrow Shares”). One-third of the Escrow Shares (along with the related accrued dividends and distributions) shall be released upon the post-combination company obtaining certain specified adjusted consolidated net income targets in each of calendar years 2016, 2017 and 2018.
The target adjusted consolidated net income ranging in 2016 from $20.2 million at the bottom to $32.0 million at the top, in 2017 from $22.6 million at the bottom to $38.0 million at the top, and in 2018 from $25.6 million at the bottom to $44.0 million at the top, and with the average adjusted consolidated net income target for the alternative earn-out payment ranging from $23.3 million at the bottom to $40.0 million at the top.
The Company has achieved the earn-out payment requirement in 2016 thus one third of 8 million escrowed restricted shares were released in 2017. However the Company has not achieved the earn-out payment requirement in both 2018 and 2017, thus the two thirds of 8 million escrowed restricted shares were not released.
F-41
ROAN HOLDINGS GROUP CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
19. EQUITY (CONTINUED)
Restricted Shares
On April 4, 2018, 1,150 shares of restricted shares were forfeited as the employees resigned from the Company.
On September 18, 2018, the Company granted 370,525 shares of restricted shares to four employees and one independent director of the Company for the services provided for the past one year. These shares are vested immediately upon grant. The fair value of restricted shares is determined with reference to the fair value of the underlying shares on grant date and is recognized as expense on the grant date. Share-based compensation expense, when recognized, is charged for the consolidated income statements with the corresponding entry to additional paid-in capital.
A summary of the changes in the restricted shares related to ordinary shares granted by the Company during the year ended December 31, 2019 and 2018 is as follows:
Number of restricted shares Weighted average granted date fair value Granted and unvested as of December 31, 2017 $ 1,308 $ 7.90 Granted 370,525 0.85 Vested (370,683 ) 0.85 Forfeited (1,150 ) 7.90 Granted and unvested as of December 31, 2018 $ - $ -
Granted and unvested as of December 31, 2019 $ - $ -
Preferred Shares
The Company is authorized to issue unlimited preferred shares, in one or more series, with such designations, voting and other rights and preferences as may be determined from time to time by the board of directors. As of December 31, 2019 and 2018, there were 715,000 Class A preferred shares issued and outstanding. As of December 31, 2019 and 2018, there were 291,795,150 and nil Class B preferred shares issued and outstanding.
Warrants
A summary of warrants activity for the years ended December 31, 2019 and 2018 is as follows:
Number of shares Weighted average life Expiration dates Balance of warrants outstanding as of December 31, 2017 9,280,323 3.52 years July 6, 2021 Grants of Series A Warrants 576,924 4 years July 9, 2022 Grants of Placement Agent Warrant 46,154 4 years July 9, 2022 Grants of Series B Warrants 390,579 0.08 years August 9, 2018 Exercise of Series B Warrants (390,579 ) Balance of warrants outstanding as of December 31, 2018 9,903,401 2.58 years *
Balance of warrants outstanding as of December 31, 2019 9,903,401 1.58 years *
* As of December 31, 2019 and 2018, the Company’s 9,903,401 shares of warrants were comprised of 9,280,323 shares which would expire on July 6, 2021, and 623,078 shares which would expire on July 9, 2022, respectively.
F-42
ROAN HOLDINGS GROUP CO., LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
19. EQUITY (CONTINUED)
Warrants (continued)
Series A Warrants
In connection with the private placement closed on July 10, 2018, the Company issued Series A warrants to investors to purchase a total of 576,924 ordinary shares with a warrant term of four (4) years. The Series A Warrants have an exercise price of $2.60 per share. On January 9, 2019, the Board of the Company approved an downward adjustment of exercise price from $2.6 to $1.18.
The Series A Warrants have customary anti-dilution protections including a “full ratchet” anti-dilution adjustment provision which are triggered in the event the Company sells or grants any additional shares of common stock, options, warrants or other securities that are convertible into common stock at a price lower than $2.60 per share. The anti-dilution adjustment provision is not triggered by certain “exempt issuances” which among other issuances, includes the issuance of shares of common stock, options or other securities to officers, employees, directors, consultants or service providers.
Based on an evaluation as discussed in FASB ASC 815-15, “Embedded Derivatives” and FASB ASC 815-40-15, “Contracts in Entity’s Own Equity – Scope and Scope Exceptions,” the Company determined that the Series A Warrants were not considered indexed to its own stock because neither the occurrence of a sale of equity securities by the issuer at market nor the issuance of another equity contract with a lower strike price is an input to the fair value of a fixed-for-fixed option or forward on equity shares. As such, the Series A Warrants was classified as a liability. Liability classification requires the warrant to be re-measured to their fair value for each reporting period.
As of July 10, 2018, December 31, 2018 and 2019, the Company estimated fair value of the Series A Warrants at $1,202,310, $510,000 and $18,462, respectively, using the Black-Scholes valuation model, which took into consideration the underlying price of ordinary shares, a risk-free interest rate, expected term and expected volatility. As a result, the valuation of the warrant was categorized as Level 3 in accordance with ASC 820, “Fair Value Measurement”.
On the July 10, 2018, December 31, 2018 and 2019, the Company estimated the fair value of Series A Warrants using the following assumption.
On July 10, 2018 On December 31, 2018 On December 31, 2019 Terms of warrants 48 months 42 months 30 months Exercise price 2.60 2.60 1.18 Risk free rate of interest 2.77 % 2.77 % 1.56 % Dividend yield 0.00 % 0.00 % 0.00 % Annualized volatility of underlying stock 2.03 2.09 2.45
RONFW~~Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.https://simplywall.st/stocks/us/diversified-financials/otc-rahg.f/roan-holdings-group
RONWF~~Mr. Junfeng Wang serves as Chief Executive Officer at Roan Holdings Group Co. since August 10, 2020. Mr. Wang worked as a Technical Director with Beijing Chenglianxin Technology Co., Ltd., Internet in Logistics Platform section from 2016 to July 2020. From 2015 to 2016, he held the same type of technical director position with Juewei Group Beijing Digital Marketing Center in the Food Processing Department. Mr. Wang holds an MBA degree from Beijing University of Posts and Telecommunications
RONWF~~ITS HUGE~~Cash Runway Analysis For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.
Stable Cash Runway: RAHG.F has sufficient cash runway for more than 3 years based on its current free cash flow.
Forecast Cash Runway: RAHG.F has sufficient cash runway for 2.3 years if free cash flow continues to reduce at historical rates of 25.5% each year.
Warrant price at $2.60 dollarsRONWF~~On July 6, 2018, the Company and certain institutional investors entered into a securities purchase agreement (“Private Placement”), pursuant to which the Company agreed to sell to such investors an aggregate of 769,232 ordinary shares together with Series A warrants to purchase a total of 576,924 ordinary shares (the “Series A Warrants”), for gross proceeds of approximately $2.0 million. Each investor will receive a Series A Warrant to purchase a number of shares equal to 75% of the number of ordinary shares the investor purchases in the offering with a warrant term of four (4) years. The purchase price for each ordinary share and the related Series A Warrants is $2.60. The Series A Warrants have an exercise price of $2.60. In connection with the offering, the investors also received Series B warrants with an initial face amount of 200,000 ordinary shares, which are subject to adjustment not in excess of an aggregate of 462,843 ordinary shares (the “Series B Warrants”) for nominal consideration. If on the 30th day after the closing date of the transaction (the “Adjustment Date”), the closing bid price of the Company’s ordinary shares is less than $2.60, the investors shall have the right to exercise the Series B Warrants and the number of ordinary shares to be issued to the investors upon exercise of the Series B Warrants shall be adjusted (upward or downward, as necessary) based on the closing bid price of the Company’s ordinary shares on such date. The closing of the offering took place on July 10, 2018. On August 9, 2018, the closing bid price of the Company’s ordinary shares was $1.29, and thus the Series B Warrant was exercised for 390,579 ordinary shares.
RONWF~~On July 6, 2018, the Company and certain institutional investors entered into a securities purchase agreement (“Private Placement”), pursuant to which the Company agreed to sell to such investors an aggregate of 769,232 ordinary shares together with Series A warrants to purchase a total of 576,924 ordinary shares (the “Series A Warrants”), for gross proceeds of approximately $2.0 million. Each investor will receive a Series A Warrant to purchase a number of shares equal to 75% of the number of ordinary shares the investor purchases in the offering with a warrant term of four (4) years. The purchase price for each ordinary share and the related Series A Warrants is $2.60. The Series A Warrants have an exercise price of $2.60. In connection with the offering, the investors also received Series B warrants with an initial face amount of 200,000 ordinary shares, which are subject to adjustment not in excess of an aggregate of 462,843 ordinary shares (the “Series B Warrants”) for nominal consideration. If on the 30th day after the closing date of the transaction (the “Adjustment Date”), the closing bid price of the Company’s ordinary shares is less than $2.60, the investors shall have the right to exercise the Series B Warrants and the number of ordinary shares to be issued to the investors upon exercise of the Series B Warrants shall be adjusted (upward or downward, as necessary) based on the closing bid price of the Company’s ordinary shares on such date. The closing of the offering took place on July 10, 2018. On August 9, 2018, the closing bid price of the Company’s ordinary shares was $1.29, and thus the Series B Warrant was exercised for 390,579 ordinary shares.
Additional Securities Share Structure Market Cap Market Cap 14,849 09/18/2020 Authorized Shares 9,280,323 09/18/2020 Outstanding Shares 9,280,323 09/18/2020 Restricted 2,420,260 09/18/2020 Unrestricted 6,860,063 09/18/2020 Held at DTC 6,860,063 09/18/2020 Float Not Available Par Value No Par Value
China Lending Corp. unit increases registered capital China Lending Corp. unit Xinjiang Xinquan Financial Leasing Co. Ltd. increased its registered capital to US$50 million from US$30 million.
Xinjiang Heli Kaiyuan Construction Co. Ltd. injected the additional capital into Xinjiang Xinquan Financial Leasing, according to a Form 6-K filed Aug. 8.
Following completion of the transaction, China Lending Corp. holds a 60% stake in Xinjiang Xinquan Financial Leasing, partly through China Fenghui Financial Holdings Group, while Xinjiang Heli Kaiyuan Construction holds a 40% stake in the company.
Real-Time Best Bid & Ask: 08:08am 09/27/2019 Delayed (15 Min) Trade Data: 12:00am 09/26/2019 Overview Quote Company Profile Security Details News Financials Disclosure Research NEWS
China Lending's Common Shares to Be Quoted on the OTC Pink Open Market Following NASDAQ Delisting
BEIJING, URUMQI, China and HANGZHOU, China, Sept. 6, 2019 /PRNewswire/ -- China Lending Corporation ("China Lending" or the "Company") (NASDAQ: CLDC) today was notified by The Nasdaq Stock Market ("Nasdaq") that the Nasdaq Hearings Panel denied the Company's recent appeal and determined to delist the Company's common shares from Nasdaq. The decision to delist the Company's common shares was reached as a result of the Company's inability to regain compliance with the continued listing requirement of a minimum of $2.5 million in stockholders' equity, as set forth in Nasdaq Listing Rule 5550(b)(1). Accordingly, it is expected that the trading of the Company's common shares on Nasdaq will cease at the opening of business on September 6, 2019. Subsequently, Nasdaq will file a Form 25-NSE with the Securities and Exchange Commission to effect the removal of the Company's securities from listing and registration on the Nasdaq Capital Market.
The Company anticipates that its securities will be quoted on the OTC Pink Open Market (the "Pink Sheets"), a centralized electronic quotation service for over-the-counter ?securities, following the Nasdaq delisting; the trading symbol for the Company's securities will remain unchanged. Such quotation will continue so long as market makers demonstrate an interest in trading in the Company's common ?shares; however, the Company can give no assurance that trading in its common shares will continue on ?the Pink Sheets or any other securities exchange or quotation medium.? Further, trading of the Company's common shares on the Pink Sheets may be restricted depending on the jurisdiction in which potential purchasers or sellers of shares reside.
The Company will remain a reporting company under the Securities Exchange Act of 1934 and continue to be subject to the public reporting requirements of the Securities and Exchange Commission.
About China Lending Corporation
Founded in 2009, China Lending is a non-bank financial corporation and provides comprehensive financial services to micro, small and medium sized enterprises, and individuals. China Lending has headquarters in Urumqi, the capital of Xinjiang Autonomous Region, and Hangzhou, the capital of Zhejiang province. For more information, please visit: www.chinalending.com.
Safe Harbor Statement
This announcement contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. Such statements are based upon management's current expectations and relate to events that involve known or unknown risks, uncertainties and other factors, all of which are difficult to predict and many of which are beyond the Company's control. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under law.
IR Contact: At the Company: Katrina Wu Email: wuxiaoqing@chinalending.com Phone: +86-991-316-9617
Investor Relations: Jack Wang ICR Inc. Email: ICR-TMT@icrinc.com Phone: +1 646-224-6936
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