UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): January 10, 2017

 

  TAKUNG ART CO., LTD 

(Exact name of registrant as specified in its charter)

 

 

 

         
Delaware   000-55500   26-4731758

(State or other jurisdiction

of incorporation)

 

 

(Commission

File Number)

 

 

(IRS Employer

Identification No.)

 

 

 

Flat/RM 03-04 20/F Hutchison House

10 Harcourt Road, Central Hong Kong

(Address of Principal Executive Offices)

 

Registrant’s telephone number: +852 3158 0977

  

________________________________________________

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see  General Instruction A.2. below):

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

  

On July 18, 2016, our Hong Kong subsidiary, Hongkong Takung Assets and Equity of Artworks Exchange Co., Ltd. (“Hongkong Takung”) entered into a loan agreement with Merit Crown Limited, a Hong Kong company (“Merit Crown”) to borrow US$1.5 million to meet its working capital needs. On August 24, 2016, HongKong Takung entered into another loan agreement with Merit Crown to borrow US$2 million. Interest on both these US$ loans accrue at a rate of 8% per annum pro-rated to the actual loan period, which was due to expire on December 31, 2016.

 

On July 18, 2016 and on August 24, 2016, our PRC subsidiary, Takung (Shanghai) Co., Ltd entered into interest-free loan agreements to lend an individual, Xiaohui Wang, a national of the People’s Republic of China (“Wang”) RMB10.08 million (equivalent to US$1.5 million) and RMB13.35 million (equivalent to US$2 million) for the same duration as the aforementioned loans. Both RMB loans are guaranteed by Chongqing Wintus (New Star) Enterprises Group and Wang is a shareholder and the legal representative of it. Wang and Chongqing Wintus (New Star) Enterprises Group are affiliated with Merit Crown. Both RMB loans expired on December 31, 2016 and the principal loan amounts were repaid on January 6, 2017.

 

On January 4, 2017, Hongkong Takung and Merit Crown entered into an extension of loan agreement to amongst other things, extend the term of the US$ loans through March 31, 2017 (the “Extension of Loan Agreement”). Hongkong Takung shall pay a total of US$69,212 (being the interest on the US$ loans based on an annual interest rate of 8% and 360-day year for the period from January 1, 2017 to March 31, 2017) in a lump sum to Merit Crown by January 13, 2017. The principal loan amounts shall be payable on March 31, 2017.

 

On January 4, 2017, our PRC subsidiary, Takung Cultural Development (Tianjin) Co., Ltd. entered into an interest-free loan agreement to lend Wang RMB24,461,505 (equivalent to US$3.5 million) with the principal loan amount payable on March 31, 2017 (the “RMB Loan”). The RMB Loan is to “secure” the loan amounts under the Extension of Loan Agreement and is guaranteed again by Chongqing Wintus (New Star) Enterprises Group. It is the understanding between the parties that when the loan amounts under the Extension of Loan Agreement are repaid, the RMB Loan will similarly be repaid.

 

The foregoing description of the Extension of Loan Agreement and the RMB Loan Agreement does not purport to be complete and is qualified in its entirety by the Extension of Loan Agreement and the RMB Loan Agreement, a copy of which are attached as Exhibits 10.1 and 10.2 to this Current Report on Form 8-K and are incorporated herein by reference.

 

The information in this Current Report on Form 8-K (the “Form 8-K”) is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, whether made before or after the date of this Form 8-K, except as shall be expressly set forth by specific reference in such filing. The information in this Form 8-K will not be deemed an admission as to the materiality of any information in this Form 8-K that is required to be disclosed solely by Regulation FD.

 

 

 

 

Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits

 

Exhibit No.

Description

 

10.1 Extension of Loan Agreement between Hongkong Takung Assets and Equity of Artworks Exchange Co., Ltd. and Merit Crown Limited dated January 4, 2017.

  

10.2 Loan Agreement between Takung Cultural Development (Tianjin) Co., Ltd., Xiaohui Wang and Chongqing Wintus (New Star) Enterprises Group dated January 4, 2017.

 

 

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

     
    Takung Art Co., Ltd
   
Date: January 10, 2017    
   
   

/s/ Di Xiao 

    Name: Di Xiao
    Title: Chief Executive Officer and Director

 

 

 

Exhibit 10.1

Extension of Loan Agreement

 

Lender : Merit Crown Limited (a company registered in Hong Kong, company No.: 2174556).

 

Borrower : Hongkong Takung Assets and Equity of Artworks Exchange Co., Ltd. (a company registered in Hong Kong, company No.: 1801348).

 

WHEREAS:

 

1. The Lender and the Borrower entered into a loan agreement dated July 15, 2016 by which they agreed (among others) that the Borrower would borrow US$1,500,000 from the Lender, the loan period would expire on December 31, 2016;

2. The Lender and the Borrower entered into a loan agreement dated August 24, 2016 by which they agreed (among others) that the Borrower would borrow US$1,999,500 from the Lender, the loan period would expire on December 31, 2016; and

3. The Borrower requested the Lender to extend the loan periods of the above two loan agreements to March 31, 2017.

 

After full negotiations, and in accordance with Article 3 of the above two loan agreements in relation to extension of loan period, the two parties has agreed as below:

 

Article 1. The loan periods for the US$1,500,000 and US$1,999,500 borrowed by the Borrower from the Lender under the above two loan agreements respectively shall be extended to March 31, 2017 (hereinafter the “New Loan Period”).

 

Article 2. The Borrower shall pay a total amount of US$69,212 (being the interest of the above two loan amounts calculated based on annual interest rate of 8% and 360 days a year for the period from January 1, 2017 to March 31, 2017) in lump sum to the Lender by January 13, 2017. Upon expiry of the New Loan Period, the Borrower shall repay the principal amounts of US$1,500,000 and US$1,999,500 in lump sum to the Lender. The parties can agree in advance to shorten or extend the New Loan Period.

 

Article 3. This Agreement has two original copies, each of the Lender and the Borrower will keep one original copy, which shall have equal legal effect.

   

Article 4. This Agreement shall take effect on January 1, 2017. The above-mentioned two loan agreements shall cease to be effective automatically from the effective date of this Agreement.

 

Lender:

Date: January 4, 2017

Borrower:

Date: January 4, 2017

 

 

 

 

Exhibit 10.2

 

Loan Agreement

 

Lender : Takung Cultural Development (Tianjin) Co., Ltd. (a company registered in the People’s Republic of China with registered address at Room 1704-9158, Block A Kuang Shi International Building, Xiangluo Bay, Tianjin Free Trade Area (Central Business District), China)

 

Borrower : Xiaohui Wang, Exit-Entry Permit for Travailing to and from Hong Kong and Macau No.: C25469808

 

Guarantor : Chongqing Wintus (New Star) Enterprises Group (a company registered in the People’s Republic of China, registration No.: 500103000048186) 

 

The three parties enter into this Agreement after full consultation. 

 

Article 1. The Borrower borrows RMB24,461,505 (equivalent to US$3,499,500) from the Lender. The loan period shall commence from the date when the Lender pays the full amount to the Borrower (tentatively January 1, 2016) and end on March 31, 2017. 

 

Article 2. Upon expiry of the loan period, the Borrower shall repay the above principal to the Lender in a lump sum. The parties can agree in advance to shorten or extend the loan period. 

 

Article 3. The Borrower designates the following account as the loan account. The loan is deemed to have been provided to the Borrower once it is transferred into this designated account by the Lender. The Borrower and the Guarantor warrants that the funds will be legally transferred and used, and shall be solely responsible for the relevant legal liabilities.

 

Name of account holder: Chongqing Wintus (New Star) Enterprises Group

 

Account opening bank: Beipei Sub-branch, Chongqing Branch, China Construction Bank

 

Account No.: 

 

 

 

 

 

Article 4. The Guarantor shall be jointly responsible for all repayment liabilities of the Lender under this Agreement, including without limitation to the principal and all costs in relation to collection of debts. 

 

Article 5. This Agreement has three original copies, each of the Lender, the Borrower and the Guarantor will keep one original copy, which shall have equal legal effect. 

 

Article 6. This Agreement shall take effect from January 1, 2017. 

 

 

Lender:

 

Date: January 4, 2017

 

 

 

 

Borrower:

 

Date: January 4, 2017

 

Guarantor:

 

Date: January 4, 2017