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&K International Group Limited (NASDAQ:QK) ("Q&K" or the "Company"), a leading technology-driven long-term apartment rental platform in China, announced today that the Company and the holders (the "CB Holders") of its convertible note dated July 29, 2020 (the "2020 CB") entered into certain amendments dated May 25, 2022 (the "Amendments") to the 2020 CB and related transaction documents. Pursuant to the Amendments, the conversion price of the 2020 CB was adjusted to being the price calculated as seventy five percent (75%) of the 15-Trading Day average closing price of the Company's American Depositary Shares (the "ADS"), each representing 150 class A ordinary shares of the Company, as of May 13, 2022 (the "Conversion Price"). Also pursuant to the Amendments, all of the issued and outstanding warrants previously issued to the CB Holders in connection with the 2020 CB are deemed to have expired and the Company will have no further obligation to issue additional warrants to the CB Holders in connection with the 2020 CB.
On May 25, 2022, the CB Holders elected to convert, and converted, all of the US$64,729,973 outstanding principal amount of the 2020 CB and all the accrued but unpaid interest as of such date at the Conversion Price, resulting in the issuance of 15,414,467,400 class A ordinary shares or 102,763,116 ADSs.
In addition, on May 25, 2022, the Company issued 8,617,124,250 class A ordinary shares to a lender (the "Lender") of its outstanding facility (the "Converted Loan") at a per share price equal to the Conversion Price divided by 150 (being the ADS to class A ordinary share ratio), or for a total consideration of US$36,185,890. The payment of the total consideration is set off by the repayment by the Company of the outstanding amount (including any accrued but unpaid interest) owed by the Company to the Lender under the Converted Loan.
Immediately following these issuances, the Company has 25,506,250,861 class A ordinary shares outstanding.
The CB Holders and the Lender are non-U.S. persons, and the transactions are offshore transactions exempt from registration with the U.S. SEC under Regulation S of the United States Securities Act of 1933, as amended.
"We believe the CB and loan conversion demonstrates the CB Holders and Lender's confidence in our business and long-term success. It also helps optimize our capital structure and significantly reduce the Company's financial burden." commented Chengcai Qu, the chief executive officer of the Company.
Posted In: QK
