NFT Limited (the "Company"), a finance services entity based in Hong Kong, has entered into a securities purchase agreement with a group of non-affiliated investors, as per a recent SEC Form 6-K filing. The agreement, dated May 6, 2025, involves the issuance of unsecured promissory notes totaling an original principal amount of $20 million. These notes are convertible into Class A ordinary shares of the company at the investors’ discretion.
The notes will accrue simple interest at an annual rate of 5% and are set to mature 36 months from the purchase date. The company retains the right to prepay the notes, subject to a 105% premium and a minimum five trading days notice to the investors. Starting six months post-purchase, investors can redeem the notes up to $250,000 per month, with the company having the option to settle redemptions in cash or ordinary shares. Should the company fail to maintain certain equity conditions, it will be required to pay redemptions in cash.
The agreement also stipulates that NFT Limited must keep public information readily available and maintain its NASDAQ listing. Trigger events defined in the agreement could increase the note balance by up to 15% for major events and 5% for minor ones. The interest rate may surge to 18% or the maximum allowed by law upon an event of default, with the possibility of the note balance becoming immediately due if not remedied within five trading days of notice.
The closing of this transaction and the issuance of the notes are subject to the satisfaction or waiver of the conditions outlined in the purchase agreement. This financial move was disclosed in accordance with the requirements of the Securities Exchange Act of 1934, signed by Kuangtao Wang, Chief Executive Officer of NFT Limited.
Investors and market watchers will be paying close attention to how this capital influx will be utilized by the company and its potential impact on the company’s financial position and stock performance. The details of this agreement are summarized from the Form of the Purchase Agreement and the Form of the Convertible Promissory Note, which were included as exhibits in the SEC filing.
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