UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT
TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of February 2020
Commission File Number: 333-226308
HUITAO TECHNOLOGY CO., LTD.
(Translation of registrant’s name into
English)
9 North West Fourth Ring Road
Yingu Mansion Suite 1708, Haidian District
Beijing, People’s Republic of China 100190
Tel: +86 (10) 8520-5588
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.
Form 20-F x Form
40-F ¨
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Note: Regulation S-T Rule 101(b)(1) only permits the submission
in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Note: Regulation S-T Rule 101(b)(7) only permits the submission
in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish
and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the
registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s
securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed
to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission
or other Commission filing on EDGAR.
Closing of Sunway Kids Acquisition
As disclosed on Huitao
Technology Co., Ltd.’s (the “Company”) Current Report on Form 6-K (the “Initial 6-K”)
filed with the Securities and Exchange Commission (the “SEC”) on January 3, 2020, the Company entered into certain
Share Exchange Agreement (the “Agreement”) on December 31, 2019 with Sunway Kids International Education Group
Ltd. (“Sunway Kids”), a British Virgin Islands company, and certain shareholders of Sunway Kids (the “Sellers”).
On February 11, 2020, the Company, Sunway Kids and the Sellers (collectively, the “Parties”) entered into certain
Amendment to the Agreement (the “Amendment”) which amended the Agreement to have the Cash Consideration payable
according to certain earn-out schedule, and amend certain closing deliverables.
The foregoing description
of the Amendment does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment,
which is attached as Exhibit 99.1 to this Current Report on Form 6-K and is incorporated herein by reference.
On February 14, 2020,
the transaction contemplated by the Agreement, as amended, consummated when the Company issued 1,989,262 ordinary shares of the
Company to the Sellers and the Sellers instructed delivery of Sunway Kids shares to the Company.
Simultaneously with the
consummation of the transaction, key members of Sunway Kids’ management team have entered into certain Non-Competition and
Non-Solicitation Agreement with the Company. The Sellers have also entered into certain Lock-Up Agreement with the Company pursuant
to which the Sellers agreed that without the prior written consent of the Company, the Sellers will not for a period of 6 months
after the consummation of the transaction (i) offer, pledge, sell, or otherwise transfer or dispose of, directly or indirectly,
any ordinary shares of the Company, (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the
economic consequences of ownership of the Company’s ordinary shares, or (iii) make any demand for or exercise any similar
right with respect to the registration of any of the Company’s ordinary shares.
This transaction was exempt
from registration under Section 4(2) of the Securities Act of 1933 as not involving any public offering.
Description of Sunway Kids
Immediately following the
closing of the transaction contempt by the Agreement, the business of Sunway Kids became part of our business.
Sunway Kids’ Organizational Structure
Sunway Kids was established
on February 29, 2012 under the laws of the British Virgin Islands as an offshore holding company. On August 23, 2018, Sunway Kids
established its wholly owned subsidiary, Brave Millenium Limited (“Brave Millenium”) under the laws of Hong
Kong. On December 4, 2019, Brave Millenium established Chengdu Hengshanghui Intelligent Technology Co., Ltd. (”WFOE”)
in China as a wholly foreign owned limited liability company. On December 9, 2019, WFOE entered into a series of variable interest
entity agreements with Chengdu Hengshanghui Education Consulting Co., Ltd. (“Hengshanghui Education”).
The following diagram illustrates
our current corporate structure:
Summary of Business
Sunway Kids is an
education and health service provider to day-care and preschools in China. Sunway Kids has a highly skilled professional team experienced
in early childhood development. It provides a well-structured system for early childhood education, including AI and robotic technologies,
intellectual campus administration software as a service system (“SAAS system”) and online education courses for kids
and parents. Sunway Kids provides personalized growth plans for each child based on the analysis of performance data. Sunway Kids
helps schools in increasing their education quality as well as generating derivative revenues by providing targeted courses and
AI lessons for kids. Sunway Kids’ ability to cooperate closely with various schools and research institutes in China has
contributed to its significant position in the industry.
Sunway Kids has generated
approximately $935,000 of revenue and $263,000 of net income as of December 31, 2019, although these numbers have not been audited
by an accounting firm registered by PCAOB.
Management’s Plan for the Sunway
Kids Business
With the introduction
of the national two-child policy in China since 2015, the birth rate has been increasing and thus provides a guaranteed increase
in opportunity for the preschool education industry. With the deepening of China’s economic reforms, the disposable income
of urban residents has continued to increase. With the improvement of living standards of urban residents, families have become
more willing to invest in education, training, and other services for their children starting at a young age, and at the same time
have begun to attach more importance to the branding of the education. At present, China’s preschool education and intelligent
education markets are highly fragmented, small in scale, independent, and loosely managed. Branding and franchising will therefore
become the inevitable trend of development in the intelligent education industry.
The Company’s
management believe these market conditions have created tremendous growth opportunity for the Sunway Kids business. Management
expects to focus on expansion of the Sunway Kids business in light of the continuous revenue decline in the concrete business.
Financial Statements and Exhibits.
Exhibits.
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.
Dated: February 14, 2020
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HUITAO TECHNOLOGY CO., LTD.
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By:
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/s/ Yang (Sean) Liu
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Name:
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Yang (Sean) Liu
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Title:
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Chief Executive Officer
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Exhibit 99.1
AMENDMENT NO. 1 TO
SHARE EXCHANGE AGREEMENT
This AMENDMENT,
dated as of February 11, 2020 (the “Amendment”), by and among (i) Huitao Technology Co., Ltd.,
a Cayman Islands company (the “Purchaser” or “Huitao Technology”), (ii) Yang
(Sean) Liu (the “Purchaser Representative”), (iii) Sunway Kids International Education Group Ltd., a
British Virgin Islands Company (the “Company”) and (iv) each of the shareholders of the Company named
on Annex I of the Agreement (collectively, the “Sellers”), amends the Share Exchange
Agreement dated as of December 31, 2019, by and among the Purchaser, Purchaser Representative, the Company, and the Sellers (the
“Agreement”). The Purchaser, the Company and the Sellers are sometimes referred to herein individually
as a “Party” and, collectively, as the “Parties”. Capitalized terms, unless
otherwise defined, shall have the meanings ascribed to such terms in Article XII of the Agreement.
WITNESSETH
WHEREAS, Article
11.9 of the Agreement states that the Parties may amend, supplement, or modify the Agreement only by execution of a written
instrument signed by the Purchaser and the Company; and
WHEREAS, the
Parties desire to amend Article 1 of the Agreement to add an earn out provision to the Cash Consideration;
WHEREAS, the
Parties desire to amend Article 8 of the Agreement to remove from closing conditions the payment of the Cash Consideration,
the Purchaser’s offshore counsel opinion, and the Company’s employment agreements, and provide an extension for the
Company to provide its offshore counsel opinion within fifteen (15) calendar days after the Closing Date.
NOW, THEREFORE,
the Parties hereto, in consideration of the mutual promises herein contained and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, hereby agree to amend the Agreement as follows:
1.
Amendment to Article 1 of the Agreement: Article 1 of the Agreement is hereby deleted in its entirety and replaced
with the following:
1.1 Purchase
and Sale of Shares. At the Closing and subject to and upon the terms and conditions of this Agreement, the Sellers shall sell,
transfer, convey, assign and deliver to the Purchaser, and the Purchaser shall purchase, acquire and accept from the Sellers,
all of the issued and outstanding shares (being 50,000 ordinary shares of US$1.00 par value each) of the Company (collectively,
the “Purchased Shares”), free and clear of all Liens (other than potential restrictions on resale under
applicable securities Laws).
1.2 Consideration.
At the Closing and subject to and upon the terms and conditions of this Agreement, in full payment for the Purchased Shares, the
Purchaser shall issue and deliver to the Sellers an aggregate of 1,989,262 Purchaser Shares (the “Exchange Shares”).
The Purchaser shall also make an aggregate cash payment (“Cash Consideration”) of two million US dollars
($2,000,000) according to the Earn Out Payment (as defined below). The Parties agreed to an aggregate number of the Exchange Shares
equal to Four Million One Hundred and Seventy-Seven Thousand Four Hundred and Fifty One U.S. Dollars (US$4,177,451) divided by
a per share price of $2.10. Each Seller shall receive its pro rata share of the Exchange Shares and Cash Consideration based on
the percentage of Purchased Shares owned by such Seller as compared to the total number of Purchased Shares owned by all Sellers
(such Seller’s “Pro Rata Share”).
1.3 Earn Out Payment.
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(a)
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On or before December 31 of 2020, the Parties shall cause the Company to have prepared a consolidated
income statement for the Company and its subsidiaries for the immediately preceding year (the “Company Income Statement”).
The Company Income Statement shall be prepared in accordance with United States generally accepted accounting principles (“GAAP”)
consistency applied. For purposes of this Agreement, “Net Income” for any year shall mean the Company’s net income,
inclusive of non-recurring items, as shown on the Company Income Statement for such year and, for the avoidance of doubt, shall
reflect the Company’s (i) gross yearly revenue minus (ii) the sum of all of the expenses on the Company Income Statement,
including, without limitation, cost of goods sold, selling, general and administrative expenses, taxes, and interest, and a reasonable
amount of reflective of the cost of being a public company for such fiscal year, on a consolidated basis, using the Company Income
Statement.
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(b)
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The Earn Out Payment and Targets for the years ending in December 31, 2024 (the “Targets”)
are set forth in Annex A. To the extent the Target is not fully achieved but at least 80% of Gross Revenue and/or Net Income is
recognized in an applicable year, then the Targets shall be deemed to be partially achieved and the applicable Earn Out Payment
shall be paid to the Sellers pro rata.
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1.4 Company
Shareholder Consent. Each Seller, as a shareholder of the Company, hereby approves, authorizes and consents to the Company’s
execution and delivery of this Agreement and the Ancillary Documents to which it is or is required to be a party or otherwise
bound, the performance by the Company of its obligations hereunder and thereunder and the consummation by the Company of the transactions
contemplated hereby and thereby. Each Seller acknowledges and agrees that the consents set forth herein are intended and shall
constitute such consent of the Sellers as may be required (and shall, if applicable, operate as a written shareholder resolution
of the Company) pursuant to the Company Charter, any other agreement in respect of the Company to which any Seller is a party
and all applicable Laws.
2.
Amendment to Article 8 of the Agreement: Article 8 of the Agreement is hereby deleted in its entirety and replaced
with the following:
8.1 Conditions
to Each Party’s Obligations. The obligations of each Party to consummate the transactions described herein shall be
subject to the satisfaction or written waiver (where permissible) by the Company and the Purchaser of the following conditions:
(a) Requisite
Regulatory Approvals. All Consents required to be obtained from or made with any Governmental Authority in order to consummate
the transactions contemplated by this Agreement, shall have been obtained or made.
(b) Requisite
Consents. The Consents required to be obtained from or made with any third Person (other than a Governmental Authority) in
order to consummate the transactions contemplated by this Agreement as set forth in Schedule 8.1(b) shall have
each been obtained or made.
(c) No
Law. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Law (whether temporary, preliminary
or permanent) or Order that is then in effect and which has the effect of making the transactions or agreements contemplated by
this Agreement illegal or which otherwise prevents or prohibits consummation of the transactions contemplated by this Agreement.
(d) No
Litigation. There shall not be any pending Action brought by a third-party non-Affiliate to enjoin or otherwise restrict the
consummation of the Closing.
(e)
Due Diligence. The completion of all necessary due diligence by both Parties.
8.2 Conditions
to Obligations of the Company and the Sellers. In addition to the conditions specified in Section 8.1, the obligations
of the Company and the Sellers to consummate the transactions contemplated by this Agreement are subject to the satisfaction or
written waiver (by the Company and the Sellers) of the following conditions:
(a) Representations
and Warranties. All of the representations and warranties of the Purchaser (including the Purchaser Subsidiaries) set forth
in this Agreement and in any certificate delivered by the Purchaser pursuant hereto shall be true and correct on and as of the
date of this Agreement and on and as of the Closing Date as if made on the Closing Date, except for (i) those representations
and warranties that address matters only as of a particular date (which representations and warranties shall have been accurate
as of such date), and (ii) any failures to be true and correct that (without giving effect to any qualifications or limitations
as to materiality or Material Adverse Effect), individually or in the aggregate, have not had and would not reasonably be expected
to have a Material Adverse Effect on, or with respect to, the Purchaser or any Purchase Subsidiary or materially and adversely
affect the Purchaser’s ability to consummate the transactions contemplated hereby.
(b) Agreements
and Covenants. The Purchaser shall have performed in all material respects all of the Purchaser’s obligations and complied
in all material respects with all of the Purchaser’s agreements and covenants under this Agreement to be performed or complied
with by it on or prior to the Closing Date.
(c) No
Material Adverse Effect. No Material Adverse Effect shall have occurred with respect to the Purchaser (including the Subsidiaries
of the Purchaser) since the date of this Agreement.
(d)
Closing Deliveries.
(i) Officer
Certificate. The Purchaser shall have delivered to the Company a certificate, dated the Closing Date, signed by an executive
officer of the Purchaser in such capacity, certifying as to the satisfaction of the conditions specified in Sections 8.2(a), 8.2(b) and 8.2(c).
(ii) Secretary
Certificate. The Purchaser shall have delivered to the Company a certificate from its secretary certifying as to (A) copies
of the Purchaser’s Organizational Documents as in effect as of the Closing Date, (B) the resolutions of the Purchaser’s
board of directors authorizing the execution, delivery and performance of this Agreement and each of the Ancillary Documents to
which it is a party or by which it is bound, and the consummation of the transactions contemplated hereby and thereby, (C) evidence
of the Required Shareholder Vote and (D) the incumbency of officers authorized to execute this Agreement or any Ancillary Document
to which the Purchaser is or is required to be a party or otherwise bound.
(iii) Good
Standing. The Purchaser shall have delivered to the Company a good standing certificate (or similar documents applicable for
such jurisdictions) for the Purchaser and each Purchaser Subsidiary certified as of a date no later than five (5) days prior to
the Closing Date from the proper Governmental Authority of the Purchaser’s and each Purchaser Subsidiary’s respective
jurisdiction of organization and from each other jurisdiction in which the Purchaser or such Purchaser Subsidiary is qualified
to conduct business as a foreign corporation or other entity as of the Closing, in each case to the extent that good standing
certificates or similar documents are generally available in such jurisdictions.
(iv)
Share Certificates. The Sellers shall have received from the Purchaser share certificates reflecting the ownership of their
respective Pro Rata Shares of the Exchange Shares by the Sellers (or their nominees) and payment for fractional interests, if
any, to be delivered pursuant to this Agreement.
(v)
Board Resolutions. The Company and the Sellers shall have received duly executed written resolutions of the board
of directors of the Purchaser, in the agreed form, approving the issuance of the Exchange Shares to the Sellers (or their nominees)
at Closing.
(vi) Purchaser
Disclosure Schedules. The Company and the Sellers shall have received the Purchaser Disclosure Schedules.
(e)
Effectiveness of Certain Ancillary Documents.
(i) Non-Competition
Agreements. The Non-Competition and Non-Solicitation Agreements to be entered into by each Seller and the other Subject Parties
thereto (as defined therein) in favor of and for the benefit of the Purchaser, the Company and each of the other Covered Parties
(as defined therein) (each, a “Non-Competition Agreement”), the form of which is attached as Exhibit
A hereto, shall be duly executed and delivered and in full force and effect in accordance with the terms thereof as of
the Closing.
(ii) Lock-Up
Agreement. The Lock-Up Agreement to be entered into by and among the Sellers and the Purchaser (the “Lock-Up Agreement”),
the form of which is attached as Exhibit B hereto, shall be duly executed and delivered and in full force and
effect in accordance with the terms thereof as of the Closing.
(f)
NASDAQ Listed Status. Immediately prior to the Closing, (a) the Exchange Shares shall
be approved by NASDAQ for issuance and (b) the Purchaser Shares are listed on NASDAQ Capital Market.
8.3 Conditions
to Obligations of the Purchaser. In addition to the conditions specified in Section 8.1, the obligations of the
Purchaser to consummate the transactions contemplated by this Agreement are subject to the satisfaction or written waiver (by
the Purchaser) of the following conditions:
(a) Representations
and Warranties. All of the representations and warranties of the Company and the Sellers set forth in this Agreement and in
any certificate delivered by the Company or any Seller pursuant hereto shall be true and correct on and as of the date of this
Agreement and on and as of the Closing Date as if made on the Closing Date, except for (i) those representations and warranties
that address matters only as of a particular date (which representations and warranties shall have been accurate as of such date),
and (ii) any failures to be true and correct that (without giving effect to any qualifications or limitations as to materiality
or Material Adverse Effect), individually or in the aggregate, have not had and would not reasonably be expected to have a Material
Adverse Effect on, or with respect to, any Target Company or materially and adversely affects the Company’s or Sellers’
ability to consummate the transactions contemplated hereby.
(b) Agreements
and Covenants. The Company and each Seller shall have performed in all material respects all of such Party’s obligations
and complied in all material respects with all of such Party’s agreements and covenants under this Agreement to be performed
or complied with by it on or prior to the Closing Date.
(c) No
Material Adverse Effect. No Material Adverse Effect shall have occurred with respect to any Target Company since the date
of this Agreement.
(d) Closing
Deliveries.
(i) Officer
Certificate. The Purchaser shall have received a certificate from the Company, dated as the Closing Date, signed by an executive
officer of the Company in such capacity, certifying as to the satisfaction of the conditions specified in Sections 8.3(a), 8.3(b) and 8.3(c).
(ii) Seller
Certificate. The Purchaser shall have received a certificate from each Seller, dated as of the Closing Date, signed by such
Seller, certifying as to the satisfaction of the conditions specified in Sections 8.3(a) and 8.3(b) with
respect to such Seller.
(iii) Secretary
Certificate. The Company shall have delivered to the Purchaser a certificate from its secretary certifying as to (A) copies
of the Company’s Organizational Documents as in effect as of the Closing Date, (B) the resolutions of the Company’s
board of directors and shareholders authorizing the execution, delivery and performance of this Agreement and each of the Ancillary
Documents to which it is a party or by which it is bound, and the consummation of the transactions contemplated hereby and thereby,
and (C) the incumbency of officers authorized to execute this Agreement or any Ancillary Document to which the Company is or is
required to be a party or otherwise bound.
(iv) Good
Standing. The Company shall have delivered to the Purchaser good standing certificates (or similar documents applicable for
such jurisdictions) for each Target Company certified as of a date no later than five (5) days prior to the Closing Date from
the proper Governmental Authority of the Target Company’s jurisdiction of organization and from each other jurisdiction
in which the Target Company is qualified to conduct business as a foreign corporation or other entity as of the Closing, in each
case to the extent that good standing certificates or similar documents are generally available in such jurisdictions.
(v) Certified
Charter. A copy of the Company’s charter, as in effect as of the Closing, certified by the appropriate Governmental
Authority of the British Virgin Islands as of a date no more than ten (10) Business Days prior to the Closing Date.
(vi) Legal
Opinion. The Purchaser shall have received from the Company within fifteen (15) calendar days after the Closing Date a copy
of a duly executed legal opinion addressed to the Purchaser and dated within fifteen (15) calendar days after the Closing Date
from the Company’s British Virgin Islands legal counsel in form and substance reasonably satisfactory to the Purchaser.
(vii) Share
Certificates and Transfer Instruments. The Purchaser shall have received from each Seller share certificates representing
the Purchased Shares (or duly executed affidavits of lost share certificates and indemnities in forms and substance reasonably
acceptable to the Purchaser), together with executed instruments of transfer in respect of the Purchased Shares in favor of the
Purchaser (or its nominee) and in form reasonably acceptable for transfer on the books of the Company.
(viii) Board
Resolutions. The Purchaser shall have received duly executed written resolutions of the board of directors of the Company,
in the agreed form, approving: the transfer of the Purchased Shares to the Purchaser (or its nominee) at Closing; and the appointment
of such persons as directors and/or officers of the Company as the Purchaser may request prior to Closing.
(ix) Effectiveness
of Certain Ancillary Documents. Each of the Non-Competition Agreements and the Lock-Up Agreement shall be duly executed and
delivered and in full force and effect in accordance with the terms thereof as of the Closing.
(x)
Company Disclosure Schedules. The Purchaser shall have received the Company Disclosure
Schedules.
8.4 Frustration
of Conditions. Notwithstanding anything contained herein to the contrary, no Party may rely on the failure of any condition
set forth in this Article VIII to be satisfied if such failure was caused by the failure of such Party or its
Affiliates (or with respect to the Company, any Seller) to comply with or perform any of its covenants or obligations set forth
in this Agreement.
[signature page follows]
IN WITNESS WHEREOF, each Party hereto has caused
this Agreement to be signed and delivered by its respective duly authorized officer as of the date first written above.
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The Purchaser:
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HUITAO TECHNOLOGY CO., LTD.
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a Cayman Islands company
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By:
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/s/ Yang (Sean) Liu
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Name: Yang (Sean) Liu
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Title: Chief Executive Officer
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The Purchaser Representative:
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Yang (Sean) Liu
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By:
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/s/ Yang (Sean) Liu
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Yang (Sean) Liu
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The Company:
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SUNWAY KIDS INTERNATIONAL EDUCATION GROUP LTD.
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a British Virgin Islands company
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By:
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/s/ Liming Lu
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Name: Liming Lu
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Title: Executive Director and General Manager
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[signature page to continue]
[signature page to Share Exchange
Agreement]
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The Sellers:
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/s/ Wu Rachel Yi
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Wu Rachel Yi
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/s/ Jian Ma
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Jian Ma
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[signature page to Share Exchange
Agreement]
ANNEX A
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Earn Out Period
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Targets ($)
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Cash Consideration ($)
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January 1, 2020 – December 31, 2020
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Net Income: $500,000
Gross Revenue: $1,000,000
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$
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400,000
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January 1, 2021 – December 31, 2021
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Net Income: $600,000
Gross Revenue: $1,200,000
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$
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400,000
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January 1, 2022 – December 31, 2022
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Net Income: $720,000
Gross Revenue: $1,440,000
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$
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400,000
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January 1, 2023 – December 31, 2023
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Net Income: $864,000
Gross Revenue: $1,728,000
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$
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400,000
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January 1, 2024 – December 31, 2024
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Net Income: $1,036,800
Gross Revenue: $2,073,600
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$
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400,000
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Total:
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$
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2,000,000
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