MMTec : Securities Purchase Agreement - Form 6-K

On March 31, 2023, MMTEC, Inc. (the "Company") commenced a registered direct offering of Senior Convertible Promissory Notes with an institutional investor (the "Purchaser") pursuant to a securities purchase agreement (the "Agreement") of the same date. Pursuant to the Agreement the Purchaser may purchase Senior Convertible Promissory Notes (the "Notes") in the aggregate original principal amount of not more than $70 million. The Notes will mature on the second anniversary of their issuance date. The Notes have an original issue discount of 20%, resulting in an aggregate purchase price for the Offering of up to $56 million assuming the full purchase of Notes under the Agreement. Pursuant to the Agreement, the period during which the Purchaser may purchase the Notes began on March 31, 2023 (the "Effective Date") and ends on May 11, 2023, the 30^th business day after the Effective Date. There is no minimum commitment under the Agreement.

Interest accrues on the outstanding balance of the Note at a simple rate of 8% per annum. Upon the occurrence of an Event of Default as defined in the Note, interest accrues at the lesser of 22% per annum or the maximum rate permitted by applicable law. In addition, upon any Event of Default, the Investor may accelerate the outstanding balance payable under the Note. The Note ranks senior in right of payment to any of the Company's future indebtedness that is expressly subordinated to the Note and pari passu with the claims of all of the Company's other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to individuals or companies generally.

Pursuant to the terms of the Note, the Company must obtain Investor's consent for certain fundamental transactions such as consolidation, merger with or into another entity, disposition of substantial assets, change of control, reorganization or recapitalization. Any occurrence of a fundamental transaction without Investor's prior written consent will be deemed an Event of Default.

Investor may convert all or any part the outstanding balance of the Note at any time after the Effective Date into the Company's ordinary shares, par value $0.01 (the "Ordinary Shares"), at a price equal to 75% multiplied by the lowest closing price during the five trading days immediately preceding the date of the conversion notice, subject to a floor price of $0.30 per share, as adjusted pursuant to the terms of the Note, as well as certain adjustments and ownership limitations specified in the Note.

The Company will not effecting any conversion of the Note to the extent that, as a result of such conversion, the holder of the Note together with its affiliates, or its designee, on an individual basis, would beneficially own more than 4.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares upon such conversion of the Note.

The foregoing description is qualified in its entirety by reference to the full text of the Agreement and the Note, a copy of each of which is filed as Exhibit 4.1 and Exhibit 4.2 hereto, respectively and each of which is incorporated herein by reference.

EXHIBIT INDEX

Exhibit No.		Description
4.1		Form of Securities Purchase Agreement
4.2		Form of Senior Convertible Note (Incorporated by reference to Exhibit A to the Form of Securities Purchase Agreement filed as Exhibit 4.1 to this Form 6-K)