Top KingWin Limited Announces $2,500,000 Convertible Promissory Note Private Placement

Rhea-AI Summary

Top KingWin (Nasdaq: WAI) has announced entering into a securities purchase agreement for a $2.5 million convertible promissory note with JAK Opportunities VIII The note, bearing an 11.75% annual interest rate, will provide gross proceeds of $2.25 million. The note matures in 12 months with a possible 24-month extension option and includes a 10% original issue discount. The note is convertible into ordinary shares at any time after issuance. R.F. Lafferty & Co. acted as the exclusive placement agent for this offering.

Positive

• Secured $2.25 million in immediate financing through convertible note

Negative

• High interest rate of 11.75% on the convertible note
• 10% original issue discount reduces effective proceeds
• Potential shareholder dilution from future share conversion
• No prepayment option available for the note

Insights

Financial Analyst

This $2.5M convertible note financing, while providing immediate capital, comes with significant costs and potential dilution risks. The 11.75% interest rate and 10% original issue discount effectively increase the cost of capital. Most concerning is the conversion feature, which could lead to substantial share dilution if exercised, particularly given the company's relatively small $54.3M market cap.

The inability to prepay the note limits financial flexibility, while the 12-month maturity with a possible 24-month extension creates long-term obligations. The Event of Default redemption clause adds additional risk. For a small-cap company like Top KingWin, these terms appear relatively aggressive and could significantly impact existing shareholders' value.

Shenzhen, China, Nov. 26, 2024 (GLOBE NEWSWIRE) -- Top KingWin Limited (“Top KingWin” or the “Company”) (Nasdaq: WAI) today announced that on November 25, 2024, it entered into a securities purchase agreement to issue a convertible note in the original principal amount of $2,500,000 (the “Note”) to JAK Opportunities VIII LLC (the “Purchaser”), convertible into its class A ordinary shares, par value of $0.0001 per share (the “Ordinary Shares”), for gross proceeds of $2,250,000 (the “Offering”).

R.F. Lafferty & Co., Inc. acted as the Company’s exclusive placement agent for this Offering.

The Note bears interest at a rate of 11.75% per annum, subject to adjustment from time to time in accordance with the terms of the Note. All outstanding principal and accrued interest on the Note will become due and payable twelve months after the issuance of the Note (“Issuance Date”), and the Purchaser has the option to extend the maturity term for another twenty-four months upon mutual agreement of the Company and the Purchaser. The Note includes an original issue discount of 10%.  The Company may not prepay any portion of the outstanding principal, accrued and unpaid interest or accrued and unpaid late charges on principal and interest, if any. At any time after the Issuance Date, the Note is convertible into validly issued, fully paid and non-assessable Ordinary Shares, on the terms and conditions set forth in the Note. Upon the occurrence of an Event of Default, as defined in the Note, the Purchaser may require the Company to redeem all or any portion of the Note by delivering written notice thereof.

The Note will be issued to the Purchaser upon satisfaction of all closing conditions. The issuance of the Note was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Top KingWin Ltd

Top KingWin’s main clients are entrepreneurs and executives in small and medium-sized enterprises in China. Services provided by Top KingWin to its clients including (i) corporate business training services, which mainly focus on providing training services of advanced knowledge and new perspectives on the capital markets, (ii) corporate consulting services, which mainly focus on providing a combination of customized corporate consulting services to fulfill client's unique financial needs, and (iii) advisory and transaction services, which mainly focus on connecting entrepreneurs and businesses with diversified sources of capital. Its mission is to provide comprehensive services to address clients' needs throughout all phases of their development and growth.

Forward-Looking Statements

This press release contains forward-looking statements. All statements other than statements of historical fact in this press release are forward-looking statements, including but not limited to, the use of proceeds from the Company's offering, the intent, belief or current expectations of Top KingWin and members of its management, as well as the assumptions on which such statements are based. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to” or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and in its other filings with the SEC.

For more information, please contact:
Bonnie
Email: IR@tcjhgw.cn

FAQ

What is the interest rate on Top KingWin's (WAI) November 2024 convertible note?

The convertible note bears an interest rate of 11.75% per annum, subject to adjustment according to the note terms.

How much gross proceeds did Top KingWin (WAI) receive from the November 2024 convertible note?

Top KingWin received gross proceeds of $2.25 million from the $2.5 million convertible note offering.

What is the maturity period of Top KingWin's (WAI) November 2024 convertible note?

The note matures in 12 months after issuance, with an option to extend for another 24 months upon mutual agreement.