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SEC Filings

8-K/A
SEVEN STARS CLOUD GROUP, INC. filed this Form 8-K/A on 08/14/2017
Entire Document
 

 

2.Description of Transaction

 

(a)On January 30, 2017, BT Capital Global Ltd.(“BT”) entered into a Securities Purchase Agreement (the “SVG Purchase Agreement”) with SSC, pursuant to which SSC agreed to purchase and BT agreed to sell all of the outstanding capital stock (the “SVG Common Shares”) of SVG for an aggregate purchase price of (i) $800,000; and (ii) a Promissory Note (the “SVG Note”) with the principal and interest thereon convertible into shares of SSC’s Common Stock, par value $0.001 per share (the “SSC Common Shares”) at a conversion rate of $1.50 per SSC Common Share. The consideration payable is contingent on SVG achieving certain financial goals within 12 months of the closing, as described further below. 

 

BT has guaranteed that the business of the SVG and its subsidiaries shall achieve (i) revenue $250 million (the “Revenue Performance Guarantee”), and (ii) $15 million of gross profit (the “Profit Performance Guarantee”, and together with the Revenue Performance Guarantee the “Performance Guarantees”), within 12 months of closing the transaction (the “Performance Guarantee Time”). If SVG fails to meet either of the Revenue Performance Guarantee or the Profit Performance Guarantee within the Performance Guarantee Time, then BT shall forfeit back to SSC the SSC’s Common Stock or the “SVG” Note, on a pro-rata basis based on the Performance Guarantee for which the Sun Video Business achieves the lowest percentage of the respective amount guaranteed.

 

In addition, if the Sun Video Business achieves more than $50 million in cumulative net income within 3 years of closing, (the “Net Income Threshold”), we shall pay BT 50% of the amount of any cumulative net income above the Net Income Threshold. Profit share payments shall be made on an annual basis, in either cash or stock at the discretion of our Board of Directors. If the Board decides to make the payment in stock, the number of our shares of common stock to be awarded shall be calculated based on the market price of such shares.

 

(b)

On January 31, 2017, BT entered into a Securities Purchase Agreement (the “WAG Purchase Agreement”) with SSC and Beijing Sun Seven Stars Culture Development Limited, as guarantor, pursuant to which SSC agreed to purchase and BT agreed to sell 55% of the outstanding capital stock (the “Wide Angle Common Shares”) of Wide Angle Group Ltd., a Hong Kong company (“Wide Angle”) for the sole consideration of SSC adding Wide Angle to the Sun Video Business acquired by SSC under SVG Purchase Agreement entered into with BT on January 30, 2017 and thereby including the revenue and gross profit from Wide Angle in the calculation of the SVG Performance Guarantees set forth in the SVG Purchase Agreement as described in Note (a) above.

 

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