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 OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the month of September 2021

 

Commission File Number 001-35722

 

TAOPING INC.

(Translation of registrant’s name into English)

 

Unit 3102, 31/F, Citicorp Centre

18 Whitefield Road, Hong Kong

(Address of principal executive offices)

 

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 ☒ 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): ☐

 

 

 

 
 

 

On September 20, 2021, Taoping Inc. (the “Company”) issued a press release announcing that the Company and the Company’s wholly owned subsidiary, Information Security Technology (China) Co., Ltd. (“IST”) entered into an equity transfer agreement (the “Equity Transfer Agreement”) with Mr. Jianghuai Lin, the sole shareholder of iASPEC Technology Group Co., Ltd., a variable interest entity (“iASPEC”), pursuant to which, IST exercised the option to purchase all of the equity interests in iASPEC. As consideration for the equity interests of iASPEC, the Company agreed to issue 612,245 ordinary shares to Mr. Lin. Upon the closing of the equity transfer, the Company’s existing variable interest entity structure will be dissolved and iASPEC will become a wholly owned indirect subsidiary of the Company. The Amended and Restated Management Services Agreement, entered into by and among IST, Mr. Lin and iASPEC on December 13, 2009, will be automatically terminated then.

 

Copies of the English Translation of Equity Transfer Agreement and the press release are attached as Exhibit 99.1 and Exhibit 99.2, respectively, to this Report on Form 6-K and are incorporated by reference herein.

 

This Report on Form 6-K, including Exhibits 99.1 and 99.2, is hereby incorporated by reference into the Company’s Registration Statements on Form S-8 (No. 333-211363 and No. 333-256600) and Form F-3 (No. 333-229323).

 

 
 

 

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, thereunto duly authorized.

 

Date: September 20, 2021 TAOPING INC.
     
  By: /s/ Jianghuai Lin
    Jianghuai Lin
    Chief Executive Officer

 

 
 

 

EXHIBIT INDEX

 

Exhibit   Description
     
99.1   English Translation of Equity Transfer Agreement, dated September 18, 2021
99.2   Press Release, dated September 20, 2021

 

 


 

Exhibit 99.1

 

EQUITY TRANSFER AGREEMENT

 

This Equity Transfer Agreement (this “Agreement”) is entered into as of September 18, 2021 by and among:

 

Transferee

 

Information Security Technology (China) Co., Ltd.
Address: 21st Floor, Everbright Bank Bldg., Zhuzilin, Futian District, Shenzhen, Guangdong, 518040, People’s Republic of China
Represented By: Jianghuai LIN
Telephone: 0755-83708333
   

 

Parent

 

Taoping Inc.
Address: 21st Floor, Everbright Bank Bldg., Zhuzilin, Futian District, Shenzhen, Guangdong, 518040, People’s Republic of China
Represented By: Jianghuai LIN
Telephone: 0755-83708333
   

 

Shareholder

 

Jianghuai LIN
ID Card Number:  
Address: 9B 1-123, Tianxiang Bldg., Tian An Cyber Park, Chengongmiao, Shenzhen, Guangdong, 518040, People’s Republic of China
Telephone:  

 

Company

 

iASPEC Technology Group Co., Ltd.
Address: 9B 1-123, Tianxiang Bldg., Tian An Cyber Park, Chengongmiao, Shenzhen, Guangdong, 518040, People’s Republic of China
Represented By: Jianghuai LIN
Telephone: 0755-88319888

 

The Company, the Transferee, the Parent and the Shareholder are collectively referred to as the “Parties”, and individually, a “Party”.

 

WHEREAS, the Company, the Shareholder and the Transferee on July 1, 2007 entered into a purchase option agreement (the “Option Agreement”), pursuant to which the Shareholder granted the Transferee or its designee(s) an exclusive, irrevocable option to purchase, from time to time, all or a part of equity interests in the Company at an exercise price of $1,800,000, in the aggregate.

 

1
 

 

WHEREAS, the Transferee has informed the Company and the Shareholder, of the Transferee’s intent to exercise its purchase option under the Option Agreement by serving the Company and the Shareholder with a copy of the Notice of Option Exercise.

 

WHEREAS, the Shareholder desires to sell and transfer to the Transferee, and the Transferee agrees to purchase the equity interests of the Shareholder in the Company.

 

Based on the terms, representations, warranties and covenants under this Agreement, the Parties agree:

 

ARTICLE 1

SALES AND PURCHASE

 

1.1 Based on and subject to the terms and conditions of this Agreement, the Shareholder agrees to sell and transfer to the Transferee, and the Transferee agrees to purchase and obtain all of the equity interest and any and all rights and benefits relating thereto of the Shareholder in the Company (“Equity Interest”), as indicated below. Except for those have been disclosed by the Shareholder and accepted by the Transferee, the Equity Interest shall be free from any lien, mortgage, pledge, claim, ownership claim, first right of refusal and other security right.

 

100% equity interest in the Company held by the Shareholder is hereby transferred to the Transferee based on the terms and conditions under this Agreement. As consideration for the Transferee’s acquisition of the Equity Interest, the Parent shall issue to the Shareholder 612,245 unregistered ordinary shares, no par value of the Parent (the “Ordinary Shares”), which is equal to $1,800,000 divided by the volume-weighted average closing price of Ordinary Shares for the consecutive five (5) trading days immediately prior to the date hereof (the “Parent Shares”).

 

ARTICLE 2

EFFECTIVENESS AND TRANSFER

 

2.1 The Parties agree that the closing of the transactions contemplated by this Agreement shall take place on the date when the Parties complete the applicable PRC government registration(s) to effectuate the transfer of the Equity Interest (the “Closing Date”).

 

2.2 The Parent Shares shall be issued to the Shareholder on the Closing Date. All the rights and obligations before and after the Closing Date shall be continually assumed by the Company.

 

2.3 The Amended and Restated Management Services Agreement, by and among the Transferee, the Shareholder and the Company, dated as of December 13, 2009, shall be automatically terminated on the Closing Date.

 

ARTICLE 3

REPRESENTATIONS AND WARRANTIES BY THE SHAREHOLDER

 

The Shareholder represents and warranties to the Transferee as follows:

 

3.1 The Shareholder has the complete and independent legal rights and power to execute, deliver and implement this Agreement, and can act as an independent party in litigation. To the best knowledge of the Shareholder, at the time of executing this Agreement, the Shareholder has not involved into any bankruptcy proceeding and any litigation, arbitration or any other events or status that may materially affecting his ability to finish the transaction and to fulfill other obligations under this Agreement.

 

2
 

 

3.2 The Shareholder has the complete power and authorization to execute and deliver this Agreement and any other documents relating to the transaction under this Agreement and to be executed by him and to complete the transaction under this Agreement. This Agreement is duly and legally executed and delivered by the Shareholder. This Agreement constitutes the legal and binding obligations of the Shareholder and can be enforced according to its terms. Any and all documents relating to the transaction under this Agreement, once executed and delivered, will constitute the legal and binding obligations of the Shareholder and can be enforced according to the terms thereof.

 

3.3 Other than those have been disclosed by the Shareholder and accepted by the Transferee, the Shareholder is the registered and beneficial owner of all of the Equity Interest and the Equity Interest is clear of any lien, mortgage, pledge, claim, ownership claim, first right of refusal and other security. The Transferee will obtain the Equity Interest in good condition and clear of any aforementioned obstacles.

 

3.4 The Shareholder and the Company shall be jointly and severally liable for the representations and warranties made by the Company under Article 4 of this Agreement.

 

ARTICLE 4

REPRESENTATIONS AND WARRANTIES BY THE COMPANY

 

4.1 The Company is a limited liability company with independent legal personality and duly established and existing under PRC law. The Company has the complete, independent legal power and capability to enter into this Agreement and to fulfill the obligations thereunder and can act as an independent party in litigation.

 

4.2 Any and all of the reports, documents and information provided by the Company to the Transferee and required by this Agreement before the Closing Date concerning the Equity Interest of the Shareholder are true and correct in all material aspects on the Closing Date.

 

4.3 There is no pending or, to the knowledge of the Company, threatened litigation, legal proceeding or claim again the Company or its assets (including without limitation, the Equity Interest to be transferred) in any court, arbitration tribunal, government or administrative agents that will materially affect the economic situation of the Company or the ability of the Company to fulfill its obligations under this Agreement.

 

ARTICLE 5

SPECIAL AGREEMENT

 

5.1 All the taxes and administration fees incurred relating to this Agreement or the transaction under this Agreement shall be born by the Parties respectively according to the relevant PRC laws and regulations.

 

5.2 The Parties acknowledge and agree that each of them will take all necessary actions to effectuate this Agreement and the transaction thereunder, including without limitation, execution of shareholder’s resolutions, or require the directors of the Company appointed by the Shareholder to execute the board resolution, approving the transaction under this Agreement, and application for registration of the transaction under this Agreement with the original registration authority or provide assistance thereto.

 

3
 

 

ARTICLE 6

BREACH OF CONTRACT

 

6.1 If any Party (the “Breaching Party”) of this Agreement material breaches any of its representations, warranties or covenants under this Agreement, or fails to perform any of its obligations under this Agreement, such breach or failure shall constitute a breach under this Agreement (“Breach”).

 

6.2 The Party that does not breach this Agreement (the “Non-Breaching Party”) shall have the right to require the Breaching Party to rectify or take remedial actions within an agreed period, and if the Breaching Party fails to rectify its breaching activities within the agreed period, the Non-Breaching Party has the right, at its own discretion, to choose one of the following remedies: (1) terminate this Agreement and require the Breaching party to compensate all the losses incurred to the other Party due to its Breach; or (2) require the enforcement of the obligations of the Breaching Party under this Agreement and require a compensation for all the losses incurred to the other party due to the Breach.

 

ARTICLE 7

MISCELLANEOUS

 

7.1 Any notice, request, demand and other communications required by this Agreement or made according to this Agreement shall be delivered to the relevant Party in writing. Notices given by personal delivery will be deemed effectively given on the date of personal delivery. Notices given by facsimile transmission will be deemed effectively given upon transmission or if the transmission date is not a working day or the transmission time is after the working time, then on the first (1st) business day following the date of transmission.

 

7.2 This Agreement constitutes an entire agreement among the Parties and shall supersedes any and all prior communications, promises, memorandum or any discussions (written or oral) among the Parties with respect to the subject matters contained herein.

 

7.3 This Agreement may not be amended, altered or modified except by a subsequent written document signed by all Parties.

 

7.4 Each part of this Agreement is intended to be severable. If any term, covenant, condition or provision hereof is unlawful, invalid, or unenforceable for any reason whatsoever, then all such remaining parts hereof will be valid and enforceable and have full force and effect as if the invalid or unenforceable part had not been included.

 

7.5 This Agreement will be governed by and construed in accordance with the laws of the People’s Republic of China.

 

7.6 In the event of any dispute arising from, or in connection with this Agreement, the Parties will first attempt to resolve the dispute through friendly consultations. In the event that satisfactory resolution is not reached within thirty (30) days after the occurrence of such dispute, the dispute will be submitted to resolution by arbitration by the Shenzhen Court of International Arbitration (the “Court”) in Shenzhen, in accordance with the then effective procedural rules of the Court. The arbitration shall be conducted in Chinese. The arbitral award will be final and binding upon all Parties hereto. The arbitration fee shall be born by the losing Party. All the other terms than the disputing portion of this Agreement shall remain effective.

 

7.7 This Agreement is written in Chinese and in four counterparts, with each Party holds one counterpart.

 

7.8 The headings contained in this Agreement are inserted for convenience only and will not affect the meaning or interpretation of this Agreement or any provision hereof.

 

7.9 This Agreement shall take effective upon execution and shall be binding on the Parties, provided, however, that the effectiveness and complete of the equity transfer under this Agreement shall be subject to the stipulation in Article 2.

 

[The remainder of this page is intentionally left blank.]

 

4
 

 

IN WITNESS THEREOF, this Agreement is executed by:

 

Transferee   “Parent”
Information Security Technology (China) Co., Ltd.   Taoping Inc.
     

By:

/s/ Zhixiong Huang   By:

/s/ Jianghuai Lin

Name: Zhixiong Huang   Name: Jianghuai Lin
Title: Legal Representative    Title: Chief Executive Officer
         
Company   Shareholder
iASPEC Technology Group Co., Ltd.     Jianghuai LIN
                                                                  
By: /s/ Jianghuai Lin   By: /s/ Jianghuai Lin
Name: Jianghuai Lin                    
Title: Legal Representative      

 

5


 

Exhibit 99.2

 

 

TAOP Dissolves the VIE Structure and Moves Corporate Headquarters to Hong Kong

 

HONGKONG, Sep. 20, 2021 — Taoping Inc. (NASDAQ: TAOP, the “Company” or “TAOP”), a provider of blockchain technology and smart cloud services, today announced that the Company’s wholly owned Chinese subsidiary, Information Security Technology (China) Co., Ltd. ( “IST”), has exercised the option to acquire 100% equity interests in iASPEC Technology Group Co., Ltd., a variable interest entity (“VIE”) of the Company (“iASPEC”) from iASPEC’s sole shareholder, Mr. Jianghuai Lin (“Mr. Lin”), the Chief Executive Officer and Chairman of the Company.

 

On July 1, 2007, iASPEC, iASPEC’s shareholders and IST entered into a purchase option agreement (the “Option Agreement”), pursuant to which iASPEC’s shareholders granted IST or its designee(s) an exclusive, irrevocable option to purchase, from time to time, all or a part of equity interests in iASPEC at an exercise price of $1,800,000, in the aggregate.

 

On September 18, 2021, TAOP and IST exercised the purchase option and entered into an equity transfer agreement with iASPEC and iASPEC’s sole shareholder, Mr. Lin, under which Mr. Lin agreed to sell and transfer to IST all of the equity interest in and any and all rights and benefits relating thereto of iASPEC in exchange for 612,245 unregistered ordinary shares, no par value of the Company (the “Ordinary Shares”), which is equal to $1,800,000 divided by the volume-weighted average closing price of Ordinary Shares for the consecutive five (5) trading days immediately prior to September 18, 2021. The parties agreed that the closing of the transactions contemplated by the equity transfer agreement would take place on the date when the parties complete the applicable PRC government registration(s) to effectuate the transfer of the equity interests.

 

In addition, the Company relocated its global corporate headquarters from Shenzhen, China to Hong Kong as part of the implementation of its global growth strategy. As a result, the executive offices of the Company are now located at Unit 3102, 31/F, Citicorp Centre, 18 Whitefield Road, Hong Kong. Shenzhen, China will serve as TAOP’s regional headquarters in Mainland China.

 

“We believe the dissolution of VIE structure in China will improve corporate governance and transparency for TAOP shareholders. The relocation of our global corporate headquarters to Hong Kong is an important milestone for TAOP to streamline our international business development, client communication, and service delivery,” said Mr. Jianghuai Lin, Chairman and CEO of TAOP.

 

 

 

 

About Taoping Inc.

 

Taoping Inc. (TAOP), is a leading blockchain technology and smart cloud service provider. The Company is dedicated to the research and application of blockchain technology and digital assets. With multiple cloud data center deployed overseas, the Company continues to improve computing power and create value for the encrypted digital currency industry. Relying on its self-developed smart cloud platform, TAOP provides solutions and cloud services to industries such as new media and artificial intelligence. To learn more, please visit http://www.taop.com/.

 

Safe Harbor Statement

 

This press release may contain certain “forward-looking statements” relating to the business of Taoping Inc., and its subsidiaries and other consolidated entities. All statements, other than statements of historical fact included herein, are “forward-looking statements” in nature within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, often identified by the use of forward-looking terminologies such as “believes”, “expects” or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company’s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company’s periodic reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company and its subsidiaries and other consolidated entities or persons acting on their behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

 

For further information, please contact:

 

Taoping Inc.

Chang Qiu

Email: chang_qiu@taoping.cn

http://www.taop.com/

 

or

 

Dragon Gate Investment Partners LLC

Tel: +1(646)-801-2803

Email: taop@dgipl.com