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 December 2020
Commission File Number 001-37593
| BORQS TECHNOLOGIES, INC. | ||
| (Translation of registrant’s name into English) |
|
Building B23-A, Universal Business Park No. 10 Jiuxianqiao Road Chaoyang District, Beijing 100015, China |
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| (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): ☐.
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
INFORMATION CONTAINED IN THIS FORM 6-K REPORT
On December 14, 2020, Borqs Technologies, Inc. (the “Company”) entered into a Settlement Agreement (the “Settlement Agreement”), with LFMA Financing, LLC (“LMFA”) a wholly owned subsidiary of LM Funding America, Inc., pursuant to which Borqs agreed to issue ordinary shares to LMFA (the “Settlement Shares”) in settlement of approximately $18 million of debt acquired by LMFA from the Company’s senior lenders Partners for Growth IV, L.P. and Partners for Growth V. L.P.
The Settlement Agreement provides that the Settlement Shares shall be issued in tranches to LMFA at a 30% discount to the volume-weighted average price of the Company’s ordinary shares over a specified pricing period, subject to certain adjustments. The tranches will be issued from time to time over a period of up to approximately two years. On December 23, 2020, the Eleventh Circuit Court of the State of Florida issued a court order approving, among other things, the fairness of the terms and conditions of the issuance of the Settlement Shares as the full and final settlement of the debt pursuant to Section 3(a)(10) of the Securities Act of 1933, as amended (the “Securities Act”). The Settlement Shares will be issued as unrestricted securities in a transaction that is exempt from registration under Section 3(a)(10) of the Securities Act.
A copy of the press release, dated December 24, 2020, announcing transactions described above is attached as Exhibit 99.1.
1
EXHIBIT INDEX
| Exhibit Number |
Description | |
| 99.1 | Press Release |
2
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.
| BORQS TECHNOLOGIES INC. | ||
| (registrant) | ||
| Dated: December 24, 2020 | By: | /s/ Anthony K. Chan |
| Anthony K. Chan | ||
| Chief Financial Officer | ||
3
Exhibit 99.1
PRESS RELEASE
Borqs Technologies Enters Into Agreements to Extinguish Debt Totaling Approximately $18 Million and to Eliminate Institutional Loans
Santa Clara, California, December 24, 2020 – Borqs Technologies, Inc. (Nasdaq: BRQS, the “Company”), a global provider of embedded software and products for the Internet of Things (IoT), today reported that the Company has entered into Agreements dated December 14, 2020 with its senior lender and LMFA Financing LLC (“LMFA”), a Florida limited liability company and wholly owned subsidiary of LM Funding America, Inc. (Nasdaq: LMFA), in which LMFA is committed to purchase up to be approximately $18 million of debt in tranches, which when completed will eliminate substantially all of the debt with the Company’s senior lender. LMFA will convert the purchased debt into common shares of the Company, pursuant to a court order that allows the conversion shares to be issued as unrestricted securities in a transaction that is exempt from registration under Section 3(a)(10) of the Securities Act of 1933, as amended. Please refer to the company’s SEC filings for additional information about the transaction.
Some of the benefits of the transaction structure include:
| ● | Upon full performance of the transaction, elimination of substantially all of the debt owed to the senior lender, subject to the court order and regulatory procedures; |
| ● | A standstill on potential actions against the Company by the senior lender, so long as the transaction moves forward in a timely manner; and |
| ● | When the defaulted loans eventually are repaid, the Company may be able to seek future financings at better terms. |
About LMFA Financing LLC
LM Funding America, Inc., together with its subsidiaries, is a technology-based specialty finance company that provides funding to nonprofit community associations (Associations) primarily located in the state of Florida, as well as in the states of Washington, Colorado and Illinois by funding a certain portion of the associations' rights to delinquent accounts that are selected by the Associations arising from unpaid Association assessments.
About Borqs Technologies, Inc.
Borqs Technologies is a global leader in software and products for the IoT, providing customizable, differentiated and scalable Android-based smart connected devices and cloud service solutions. Borqs has achieved leadership and customer recognition as an innovative end-to-end IoT solutions provider leveraging its strategic chipset partner relationships as well as its broad software and IP portfolio.
Borqs’ unique strengths include its Android and Android Wear Licenses which enabled the Company to develop a software IP library covering chipset software, Android enhancements, domain specific usage and system performance optimization, suitable for large and low volume customized products. The Company is also currently in development of 5G products for phones and hotspots.
Forward-Looking Statements and Additional Information
This press release includes “forward-looking statements” that involve risks and uncertainties that could cause actual results to differ materially from what is expected. Words such as “expects”, “believes”, “anticipates”, “intends”, “estimates”, “predicts”, “seeks”, “may”, “might”, “plan”, “possible”, “should” and variations and similar words and expressions are intended to identify such forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Such forward-looking statements relate to future events or future results, based on currently available information and reflect our management’s current beliefs. Many factors could cause actual events or results to differ materially from the events and results discussed in the forward-looking statements, including the possibility that some or all of the debt may not be converted as described herein, and the negative impact of the coronavirus on the Company’s supply chain, revenues and overall results of operations, so the reader is advised to refer to the Risk Factors sections of the Company’s filings with the Securities and Exchange Commission for additional information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements. Except as expressly required by applicable securities law, the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.
Investor Contact:
Sandra Dou
Director of Finance
Borqs Technologies, Inc.
sandra.dou@borqs.net
www.borqs.com