CPHI China Pharma Holdings Inc

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): December 12, 2024

 

CHINA PHARMA HOLDINGS, INC.

(Exact name of Registrant as specified in charter)

 

Nevada		001-34471		73-1564807
(State or other jurisdiction		(Commission File No.)		(IRS Employer
of Incorporation)				Identification No.)

 

Second Floor, No. 17, Jinpan Road

Haikou, Hainan Province, China 570216

(Address of principal executive offices) (Zip Code)

 

Registrant’s telephone number, including area code: +86 898-6681-1730 (China)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

☐	Written communications pursuant to Rule 425 under the Securities Act (17CFR230.425)

 

☐	Soliciting material pursuant to Rule14a-12 under the Exchange Act (17CFR240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17CFR240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17CFR240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		CPHI		NYSE American

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On December 12, 2024, China Pharma Holdings Inc.. (the “Company”) entered into that certain securities purchase agreement (the “SPA”) with certain institutional investor (the “Investor”) with respect to an at-the-market offering under which the Investor may purchase, and the Company may sell within the commitment period from December 12, 2024 to December 31, 2024, at the Investor’s sole discretion, shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), having an aggregate offering price of up to $600,000 (the “Shares”) (the “Offering”). Any Shares offered and sold in the Offering will be issued pursuant to the Company’s shelf Registration Statement on Form S-3 (File No. 333-276481) filed with the Securities and Exchange Commission (the “SEC”) on January 12, 2024, as amended, which was declared effective on February 14, 2024, the related prospectus contained therein, and the prospectus supplement relating to the Offering filed with the SEC on December 13, 2024.

 

The Investor may acquire our Common Stock through one or more closings upon our receipt of purchase notices. The number of our Common Stock will be determined based on the at-the-market price equal to the lower of (i) the closing price the day prior to the purchase notice or (ii) the five (5) day average closing prices as reported by Bloomberg or on the NYSE American Market’s website, but in no event shall the per share price be lower than $0.15, which is to be stated in the purchase notice subject to repricing adjustments as contemplated under the SPA as follows. In the event the Company’s delivery of the shares is not confirmed by 1:00 pm E.T. on the trading day the purchase notice is submitted, the Investor has the right to adjust the purchase price to match the at-the-market price on the date of the delivery of the purchase notice, which is only permitted if the market price on the delivery day is lower than the previously established price. Further, the Investor, has the right, in its sole discretion, to return to the Company any or all the shares issued under the SPA within one business day following the initial receipt of such shares and prior to the payment of the purchase price to the Company if, based on price discovery or market conditions, the Investor determines that the issuance of such shares is unfavorable.

 

Additionally, the Company also provided “most favored nation” treatment (the “MFN”) to the Investor should the Company enter into any financing, transaction, settlement, or similar agreement with more favorable terms within thirty (30) days after the effective date of this SPA. In the event any of the forgoing events occurs during the term above referenced, such more favorable terms shall be retroactively applied to all closed purchases and any future purchases under the SPA (the “MFN Adjustments”) as if the more favorable terms had been in effect prior to each closing. MFN Adjustments may include but are not limited to, at-the-market price discounts, the inclusion of warrants, or anti-dilution/true-up provisions. The difference in value from the MFN adjustments shall be issued to the Investor as a convertible note.

 

The actual proceeds to the Company will vary depending on the number of shares sold and the prices of such sales. Because there is no minimum offering amount required as a condition to close this offering, the actual total offering amount and proceeds to us, if any, are not determinable at this time.

 

The offering of our Common Stock pursuant to the SPA will terminate on the earlier of (i) the date on which the Investor has purchased our Common Stock in a value equal to $600,000, (ii) the date on which the Registration Statement is no longer effective, or (iii) December 31, 2024, unless extended or terminated earlier in accordance with the terms of the SPA.

 

The foregoing description of the SPA is not complete and is qualified in its entirety by reference to the full text of the SPA, a copy of which is filed herewith as Exhibit 1.1 to this Current Report on Form 8-K and is incorporated herein by reference. A copy of the opinion of Flangas Law Group relating to the legality of the issuance and sale of the Shares in the Offering is attached as Exhibit 5.1 hereto.

 

This Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of an offer to buy the securities discussed herein, nor shall there be any offer, solicitation, or sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

 

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit No.		Description
1.1		Form of the Securities Purchase Agreement, dated December 12, 2024, by and between China Pharma Holdings Inc. and the Investor
5.1		Opinion of Flangas Law Group
99.1		Press Release Announcing the Entry of the At-the-Market Equity Financing
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

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 hereunto duly authorized.

 

Dated: December 13, 2024

 

	CHINA PHARMA HOLDINGS, INC.
	By:	/s/ Zhilin Li
		Name:	Zhilin Li
		Title:	President and Chief Executive Officer

 

 

3

Exhibit 1.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is made and entered into as of December 12, 2024, by and between China Pharma Holdings, Inc. (CPHI) a Nevada corporation (the “Company”), and [__________] (the “Purchaser”). The Purchaser and the Company, each a “Party” and collectively, the “Parties.”

 

RECITALS

 

WHEREAS, subject to the terms and conditions set forth in this Agreement, the Company and the Purchaser desire to enter into this transaction to purchase the securities outlined herein under an effective shelf registration statement on Form S-3 (Registration Number 333-276481) (the “Registration Statement”), which has at least US$600,000 in unallocated securities registered thereunder. This Registration Statement has been declared effective in accordance with the Securities Act of 1933, as amended (the “1933 Act”), by the United States Securities and Exchange Commission (the “SEC”).

 

WHEREAS, The Company desires to issue and sell to the Purchaser, and the Purchaser desires to purchase from the Company shares of the Company’s common stock, par value $0.001 per share (“Common Stock”), and, as applicable, with an aggregate purchase amount of up to US$600,000.

 

WHEREAS, the Purchaser may acquire Common Stock through one or more Closings by submitting one or more Purchase Notices (each, a “Purchase Notice”) based on the At-the-Market Price, which shall be confirmed on the day prior to the designated Closing Date and subject to repricing adjustments as outlined in this Agreement;

 

WHEREAS, the Common Stock issued under this Agreement will be registered for resale by the Purchaser under the Company’s effective shelf registration statement filed with the United States Securities and Exchange Commission (the “Shelf Registration Statement”);

 

WHEREAS, each purchase of Common Stock will be limited to up to 4.99% of the outstanding Common Stock, with any balance exceeding such percentage acquired in a manor to be mutually agreed upon by the Parties.

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

For purposes of this Agreement, the following terms shall have the meanings set forth below:

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with a Person, as such terms are used in and construed under Rule 405 of the Securities Act.

 

“At The Market Value” shall mean the lower of (i) the previous day’s closing price or (ii) the five (5) day average closing price as reported by Bloomberg or on the NYSE American Market’s website and in accordance with NYSE Rule Section 312.03(c).

 

“Base Prospectus” refers to the prospectus, dated February 6, 2024, contained within the Registration Statement as filed with the U.S. Securities and Exchange Commission.

 

“Beneficial Ownership Limitation” means a limitation, not exceeding 4.99%, on the beneficial ownership of outstanding shares of Common Stock by the Purchaser immediately following a Closing. Any shares in excess of this limit will be acquired in a manor to be mutually agreed upon by the Parties in writing and shall be incorporated by reference as an amendment to the this agreement.

 

 

“Blanket Issuance Authorization” is an authorization granted by the Company’s board of directors permitting the issuance of shares up to the total number of Commitment Shares as outlined in this Agreement.

 

“Blanket Legal Opinion” is a legal opinion provided by the Company’s counsel confirming the eligibility of the Share Issuances under the effective Registration Statement and applicable laws.

 

“Business Day” means any day other than a Saturday, Sunday, or other day on which commercial banks in New York City are authorized or required by law to close.

 

“Closing” means the completion of each purchase and sale of Common Stock pursuant to a Purchase Notice as described in Section 2.1.

 

“Closing Date” refers to the date(s) by which the Purchaser’s payment obligation must be fulfilled, provided that the following conditions have been met: (i) execution of all Transaction Documents, (ii) the Purchaser’s submission of Exhibit A, the “Purchase Notice,” and (iii) the Company’s delivery of shares in accordance with the instructions provided on the preceding day.

 

“Commitment Amount” is the total dollar amount of the Company’s Common Stock that the Purchaser commits to purchase under the terms of this Agreement.

 

“Commitment Period” is the period beginning on the Effective Date of this Agreement and ending on the earlier of (i) the date on which the Purchaser has purchased Common Stock equal to the Maximum Commitment Amount, (ii) the date on which the Registration Statement is no longer effective, or (iii) December 31, 2024, unless extended or terminated earlier in accordance with the terms of this Agreement.

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Stock” means the Company’s common stock, par value $0.001 per share, and any class of securities into which such securities may hereafter be reclassified or changed.

 

“Daily Penalty” has the meaning set forth in Section 2.3.5(a).

 

“Delivery Failure” refers to the failure of the Company to deliver the Purchased Shares through DWAC within the specified time frame following the receipt of a valid Purchase Notice from the Purchaser.

 

“DWAC” (Deposit/Withdrawal at Custodian) means the electronic transfer system used to deposit and withdraw securities at The Depository Trust Company in accordance with the Company’s Transfer Agent instructions.

 

“Effective Date” is the date on which this Agreement is executed by both parties.

 

“Exchange Act” refers to the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Irrevocable Transfer Agent Instruction” or “ITAI” refers to documented instructions that allow the Purchaser to direct the issuance and transfer of the Common Stock referenced in this Agreement, held in the Share Reservation.

 

“Medallion Signature Waiver” is a waiver that negates the need for a Medallion Signature guarantee for the Purchaser when transferring shares, accompanied by an indemnity provision favoring the Transfer Agent against any related claims.

 

“Most Favored Nations Clause” refers to the provisions granting the Purchaser certain rights in the event the Company grants more favorable terms to another party, as set forth in Section 4.2.1 of this Agreement.

 

“Person” means an individual, corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof), or other entity of any kind.

 

“Purchase Amount” means the total amount specified by the Purchaser in each Purchase Notice, based on the At-the-Market Price.

 

“Purchase Notice” refers to a formal notification by the Purchaser to the Company specifying the number of shares to be purchased under the terms set forth in Exhibit A of this Agreement, within the limitations of the Commitment Amount.

 

“RegSHO Short Sale” is the condition under which the Purchaser is deemed to sell shares it does not yet own or has borrowed, complying with the regulations under Regulation SHO, including marking requirements and applicable restrictions.

 

 

“Reliance Letter” is a directive for the Transfer Agent to rely on an external legal opinion regarding the validity of share issuances under this Agreement if deemed necessary by both parties.

 

“SEC Required Filings” are the mandatory filings that the Company must submit to the SEC, including but not limited to Forms 10-K, 10-Q, 8-K, and any other necessary documents.

 

“Share Reservation” is the obligation for the Company to reserve shares equivalent to the Commitment Amount within five (5) business days of signing this Agreement, confirmed by a receipt from the Transfer Agent.

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Total Outstanding Shares” refers to the total number of issued shares of the Company’s Common Stock as verified by the Transfer Agent at the time of each issuance under this Agreement.

 

“Trading Day” means any day on which the principal Trading Market is open for trading.

 

“Trading Market” means any of the markets or exchanges on which the Common Stock is listed or quoted, including the NYSE American, or any other successor marketplace.

 

“Transaction Documents” means this Agreement, the Purchase Notice, the Share Reservation Instructions, the ITAI, the Blanket Opinion Letter, the Blanket Issuance Authorization, and the Medallion Signature Waiver.

 

“Transfer Agent” means Equiniti Trust Company.

 

“Total Outstanding Shares” means the total number of issued and outstanding shares of the Company’s Common Stock as verified by the Transfer Agent at the time of Closing pursuant to this Agreement.

 

ARTICLE II

 

CLOSING AND SETTLEMENT

 

2.1. PURCHASE AND SALE

 

2.1.1.

Timing of Delivery and Payment

 

The Closing of each transaction is initiated by a Purchase Notice and shall occur on the following business day after the confirmed delivery of the Purchased Shares, marking the due date for the Purchase Price to be paid to the Company by wire transfer, subject to any applicable price adjustments.

 

2.1.2.

Delivery of Shares

 

The Company is required to deliver the Shares according to the DWAC (Deposit/Withdrawal at Custodian) instructions specified in the Purchase Notice. Delivery shall be deemed complete when the Shares are successfully transferred to the Purchaser’s account per these instructions.

 

2.1.3.

Payment of Purchase Price

 

The Purchaser is required to pay the Purchase Price by Wire Transfer on or before the Closing.

 

2.1.4.

Purchase Price Floor

 

Notwithstanding anything to the contrary in this Agreement, the Purchaser and the Company agree that no shares of the Company’s Common Stock shall be sold or purchased under this Agreement at a price per share below $0.15 (the “Purchase Price Floor”), unless mutually agreed in writing by both parties.

 

2.1.5.

Purchase Price Adjustments

 

If the Company’s delivery of Common Stock, as per the Purchase Notice, is not confirmed by 1 pm ET on the Trading Day it was submitted, the Purchaser has the right to adjust the purchase price listed in Exhibit A to match the current At-the-Market price on the date of delivery. This adjustment is permitted only if the market price on the delivery day is lower than the previously established price. The updated Exhibit A reflecting this adjustment must be submitted along with the Wire Transfer Receipt.

 

 

2.1.6.

Delivery Failure

 

A Delivery Failure occurs if the Company does not deliver the Shares on the required date as specified in the Purchase Notice. In the event of a Delivery Failure, the Purchaser shall be entitled to the following remedies:

 

a)

Daily Penalty for Delay: A 4% daily penalty, calculated based on the Notional Value of the undelivered Shares, shall accrue until the delivery obligation is fulfilled.

 

b)

Extended Delivery Failure: If a Delivery Failure extends beyond two (2) trading days, the Purchaser shall be entitled to additional compensation for any damages or trading losses directly resulting from complications in trade settlement. The Purchaser may submit substantiated documentation, including but not limited to records of broken trades, trade confirmations, and any other complications arising from the delay, along with a detailed accounting of fees and losses incurred due to the extended Delivery Failure.

 

2.2. CONDITIONS TO PURCHASER’S CLOSING OBLIGATIONS

 

The Purchaser’s obligation to purchase the Shares is subject to the fulfillment of each of the following conditions at or prior to each Closing:

 

a)

Effectiveness of Registration Statement: The Registration Statement must be effective and must remain effective for the issuance of Shares as of each Closing Date, as well as the Company remaining in good standing with all timely filings required by the SEC.

 

b)

Accuracy of Representations and Warranties: All representations and warranties made by the Company in this Agreement shall be true and correct in all material respects as of each Closing Date.

 

c)

Performance of Covenants: The Company shall have performed, satisfied, and complied with all covenants, agreements, and conditions required by this Agreement in all material respects.

 

d)

Executed Transaction Documents: The Purchaser shall have executed and delivered all required Transaction Documents and submitted a completed Exhibit A “Purchase Notice.”

 

2.3. CONDITIONS TO COMPANY’S CLOSING OBLIGATIONS

 

The Company’s obligation to issue and sell the Shares is subject to the fulfillment of each of the following conditions at or prior to each Closing:

 

a)

Delivery of Purchase Price: The Purchaser shall have delivered the Purchase Price in accordance with the instructions provided by the Company.

 

b)

Accuracy of Representations and Warranties: All representations and warranties made by the Company in this Agreement shall be true and correct in all material respects as of each Closing Date.

 

c)

Performance of Covenants: The Purchaser shall have performed, satisfied, and complied with all covenants, agreements, and conditions required by this Agreement in all material respects.

 

d)

Submission of Purchase Notice: The Purchaser shall have submitted a completed Exhibit A “Purchase Notice” containing the total number of shares being acquired and the final terms based on the At-the-Market purchase price.

 

ARTICLE III

 

COVENANTS AND REPRESENTATIONS

 

3.1. COMPANY COVENANTS AND REPRESENTATIONS

 

The Company makes the following covenants and representations to the Purchaser, acknowledging that the Purchaser is relying on these covenants and representations as a material inducement to enter into this Agreement:

 

3.1.1.

Corporate Status and Authorization

 

The Company is duly organized, validly existing, and in good standing under the laws of its jurisdiction of incorporation. The Company has all requisite corporate power and authority to enter into this Agreement, perform its obligations hereunder, and consummate the transactions contemplated by this Agreement.

 

 

3.1.2.

Valid Issuance

 

The Shares to be issued under this Agreement will be, when issued and delivered against payment in full as provided in this Agreement, duly authorized, validly issued, fully paid, non-assessable, and free from all liens and encumbrances.

 

3.1.3.

No Conflict

 

The execution, delivery, and performance of this Agreement by the Company, including the issuance of the Shares, will not result in (i) a violation of the Company’s Certificate of Incorporation or Bylaws, (ii) a breach of any agreement to which the Company is a party, or (iii) a violation of any law or governmental order applicable to the Company.

 

3.1.4.

SEC Compliance

 

The Company is in compliance with all periodic reporting requirements of the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Company has filed all reports required to be filed under the Exchange Act and has not received any notification from the SEC or any other regulatory authority indicating any deficiency in compliance with applicable regulations.

 

3.1.5.

No Material Non-Public Information

 

The Company represents that it has reviewed and understands the Purchaser’s “Chinese Wall Policy” and has not, and will not, disclose any Material Non-Public Information (MNPI) that could impact the Purchaser’s ability to trade the Company’s stock. The Company shall promptly notify the Purchaser if it becomes aware of any inadvertent disclosure of MNPI and take all necessary actions to remediate the disclosure.

 

3.1.6.

Reservation of Shares

 

The Company shall at all times maintain a reserve from its duly authorized shares of Common Stock sufficient to enable the full issuance of the Commitment Amount under this Agreement.

 

3.1.7.

Right to Return Shares

 

Notwithstanding any other provision of this Agreement, the Purchaser shall have the right, at its sole discretion, to return to the Company any or all Shares issued under this Agreement within 1 Business Day following the initial receipt of such Shares and prior to Closing (the “Return Period”) if, based on price discovery or market conditions, the Purchaser determines that the issuance of such Shares is unfavorable.

 

a.

Notice of Return:

 

The Purchaser shall provide written notice to the Company during the Return Period, specifying the number of Shares to be returned (the “Returned Shares”) and the basis for the return.

 

b.

Effect of Return:

 

Upon the Company’s receipt of the Returned Shares, the Company shall promptly cancel such Shares on its books and records.

 

The Purchaser shall be entitled to a credit or refund of the corresponding Exercise Price or consideration paid for the Returned Shares, which shall be applied toward any future purchase obligations or refunded to the Purchaser within [5] Business Days of the return.

 

c.

Condition of Shares:

 

The Returned Shares must be free of any encumbrances, liens, or third-party claims arising from the Purchaser’s actions, except as set forth in this Agreement.

 

d.

Limitations:

 

This clause shall not affect the Purchaser’s rights or obligations under this Agreement with respect to Shares that are not returned within the Return Period.

 

 

3.1.8.

Compliance with Laws

 

The Company shall comply with all applicable federal, state, and local laws and regulations, including securities laws, and shall maintain all licenses and permits necessary to conduct its business.

 

3.1.9.

No Violation of Others’ Rights

 

The Company’s execution and performance of this Agreement will not conflict with or violate any rights of any third party, including creditors and shareholders of the Company, or result in the creation of any lien or encumbrance on any assets or properties of the Company.

 

3.2. PURCHASER COVENANTS AND REPRESENTATIONS

 

The Purchaser makes the following covenants and representations to the Company, acknowledging that the Company is relying on these covenants and representations as a material inducement to enter into this Agreement:

 

3.2.1.

Accredited Investor Status

 

The Purchaser represents and warrants that it is an “accredited investor” as defined in Rule 501(a) of Regulation D under the Securities Act of 1933, as amended (the “Securities Act”), or a “qualified institutional buyer” as defined in Rule 144A under the Securities Act.

 

3.2.2.

Investment Intent

 

The Purchaser is acquiring the Shares for its own account for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof within the meaning of the Securities Act.

 

3.2.3.

Authority and Authorization

 

The Purchaser has all necessary power and authority to enter into this Agreement, perform its obligations hereunder, and consummate the transactions contemplated by this Agreement. This Agreement constitutes the valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms.

 

3.2.4.

No Conflicts

 

The execution, delivery, and performance of this Agreement by the Purchaser do not (i) conflict with any governing documents of the Purchaser, (ii) breach any contract or agreement to which the Purchaser is a party, or (iii) violate any applicable law or governmental regulation.

 

3.2.5.

Compliance with Securities Laws

 

The Purchaser shall comply with all applicable securities laws in connection with the purchase of Shares under this Agreement. The Purchaser represents that it understands the securities laws applicable to the purchase, holding, and disposition of the Shares.

 

3.2.6.

No Material Non-Public Information

 

The Purchaser acknowledges that it is not receiving any Material Non-Public Information (MNPI) from the Company or any representative of the Company and agrees not to solicit MNPI from the Company or its representatives.

 

3.2.7.

Access to Information

 

The Purchaser has had access to the Company’s filings with the SEC and has been afforded (i) the opportunity to ask such questions as it has deemed necessary of, and to receive answers from, representatives of the Company concerning the terms and conditions of the Offering, (ii) access to information about the Company sufficient to enable it to evaluate its investment, and (iii) the opportunity to obtain such additional information as it has deemed necessary to make an informed investment decision.

 

3.2.8.

No General Solicitation

 

The Purchaser represents that it was not solicited by any form of general solicitation or general advertising in connection with its purchase of the Shares, including, but not limited to, any advertisement, article, notice, or other communication published in any newspaper, magazine, or similar media, or broadcast over television, radio, or the internet.

 

 

ARTICLE IV

 

RIGHTS AND ENTITLEMENTS

 

4.1. COMPANY RIGHTS AND ENTITLEMENTS

 

The Company shall have the following rights and entitlements under this Agreement:

 

4.1.1.

Right to Refuse Non-Compliance

 

The Company reserves the right to refuse any Purchase Notice or other instructions from the Purchaser if it determines, in good faith, that such notice or instruction does not comply with the terms of this Agreement or applicable securities laws. The Company shall notify the Purchaser in writing of the basis for any such refusal within one business day of receipt of the Purchase Notice.

 

4.1.2.

Right to Monitor Purchaser Compliance

 

The Company retains the right to verify the Purchaser’s compliance with applicable securities laws, including, but not limited to, determining the Purchaser’s adherence to accreditation standards. The Company shall conduct any such verification in a commercially reasonable manner and without undue interference with the Purchaser’s operations.

 

4.1.3.

Right to Withdraw Registration Statement

 

The Company reserves the right to withdraw or suspend the Registration Statement at any time due to changes in applicable securities laws, regulatory orders, or significant corporate events, provided that it notifies the Purchaser promptly and takes all reasonable actions to minimize any adverse effects on the Purchaser.

 

4.1.4.

Right to Enforce Covenants

 

The Company has the right to enforce all covenants and obligations agreed upon by the Purchaser, including, but not limited to, representations regarding compliance with securities laws, confidentiality, and adherence to the terms set forth in this Agreement.

 

4.1.5.

Right to Cancel

 

In the event that the Purchaser fails to complete payment by the next business day following confirmation of share delivery, the Company reserves the right to cancel the applicable Purchase Notice. Upon exercising this Right to Cancel, the Purchaser is required to Reverse DWAC the Purchased Shares to the Company’s Transfer Agent.

 

4.2. PURCHASER RIGHTS AND ENTITLEMENTS

 

The Purchaser shall have the following rights and entitlements under this Agreement:

 

4.2.1.

Most Favored Nations (MFN) Rights

 

For thirty (30) days following the Effective Date of this Agreement, should the Company enter into any financing, transaction, settlement, or similar agreement with more favorable terms than those provided to the Purchaser hereunder, such favorable terms shall be retroactively applied to all closed tranches and any future tranches within the Agreement.

 

a)

MFN Trigger and Trigger Date: The MFN Rights are triggered if the Company enters into any transaction, settlement, or exchange with terms that would have provided a more favorable economic outcome when adopting such terms in past Closings. The MFN Trigger Date is the date of such transaction.

 

b)

MFN Adjustments: Any adjustment shall apply to past and, if applicable, future transactions as if the more favorable terms had been in effect prior to each closing. Adjustments may include but are not limited to, At-The-Market price discounts, the inclusion of warrants, or anti-dilution/true-up provisions.

 

c)

Adjustment Mechanism: The difference in value from the MFN adjustments shall be issued to the Purchaser as a Convertible Note (the “Adjustment Note”). The Adjustment Note shall be calculated based on the notional value at each closing and shall include any applicable Default Interest or Penalties.

 

 

4.2.2.

Adjustment Note

 

Upon triggering the MFN clause, the Adjustment Note will be issued to the Purchaser under the following conditions:

 

a)

Adjustment Note Value Calculation: The value of the Adjustment Note shall be determined by calculating the difference in the economic value of any prior closings by including the more favorable terms in any and all prior closings, plus if applicable, any accrued interest and penalties from the MFN Trigger Date until the time the Company has cured the defaults under the Adjustment Note.

 

b)

Initial Terms: The Adjustment Note shall initially be non-interest-bearing and convertible at the At-The-Market price. If the current S3 registration lacks the capacity to register the Note, the Company must file an S-1 Registration Statement within twenty (20) days of the MFN trigger date.

 

c)

Failure to Register or File within Twenty (20) Business Days: If the Company fails to file an S-1 Registration Statement within twenty (20) days of the MFN Trigger Date, the Adjustment Note will accrue interest retroactively at an 8% per annum rate from the Trigger Date. Additionally, it will become convertible at a 15% discount to the prevailing market price.

 

d)

Failure to Register within Sixty (60) Business Days: Should the Company fail to register the underlying Common Stock of the Adjustment Note within sixty (60) Business Days of the MFN Trigger, a Failure to Register penalty equal to 8% of the Adjustment Note’s Current Value shall be added to the principal each week until the Adjustment Note is registered or fully converted into Common Stock by the Purchaser.

 

e)

Confession of Judgment: The Adjustment Note shall include a Confession of Judgment, permitting the Purchaser to seek a legal validation of any accrued fees, damages, or legal costs associated with enforcing the Purchaser’s rights, if necessary.

 

f)

Inclusion in Irrevocable Transfer Agent Instruction (ITAI): The Adjustment Note will be included within the ITAI, enabling the Purchaser to direct the Transfer Agent to reserve shares equivalent to the Adjustment Note balance, convert shares at its discretion, and if unregistered, instruct the Transfer Agent to remove any restrictive legend per the Reliance Letter and accompanying legal opinion on exemption from registration requirements.

 

4.2.3.

Notification Requirement

 

The Company shall notify the Purchaser in writing within three (3) Business Days of any Triggering Event that may impact the economic value or rights of prior closings, including any new securities issuance, transaction, or material event that affects the terms of this Agreement.

 

4.2.4.

Notification Penalty

 

In the event the Company fails to notify the Purchaser of a Triggering Event, a 10% Default Penalty shall be applied to the Adjustment Note’s Value.

 

4.2.5.

Audit Right

 

The Purchaser shall have the right to audit the Company’s compliance with the Most Favored Nations (MFN) Clause. The Purchaser may request, and the Company shall promptly provide all relevant documents and records necessary to verify compliance with the MFN terms.

 

 

ARTICLE V

 

MISCELLANEOUS

 

5.1. ARBITRATION

 

Any dispute, controversy, or claim arising out of, relating to, or in connection with this Agreement, including any question regarding its existence, validity, or termination, shall be resolved through binding arbitration. The arbitration shall be conducted in Florida in accordance with the rules of the American Arbitration Association (AAA) or JAMS then in effect. Judgment on the award rendered by the arbitrator(s) may be entered in any court having jurisdiction thereof.

 

5.2. LIMITATION OF LIABILITY

 

Each party’s aggregate liability to the other party arising out of or relating to this Agreement, whether in contract, tort (including negligence), breach of statutory duty, or otherwise, shall be limited to the total dollar amount of the Commitment Amount specified in Section 1.11 of this Agreement. In no event shall either party be liable to the other for any indirect, incidental, consequential, special, or punitive damages, including lost profits or business opportunities, even if advised of the possibility of such damages.

 

5.3. GOVERNING LAW

 

This Agreement shall be governed by and construed in accordance with the laws of the State of Florida, without regard to its conflicts of law principles. Both parties agree to submit to the exclusive jurisdiction of the state and federal courts located within the State of Florida for the purposes of enforcing any arbitration award under this Agreement or for any other actions not subject to arbitration.

 

5.4. ENTIRE AGREEMENT

 

This Agreement, together with all exhibits and schedules attached hereto, constitutes the entire understanding between the parties with respect to the subject matter hereof, superseding all prior negotiations, discussions, agreements, and understandings, whether written or oral. No modification, amendment, or waiver of any provision of this Agreement shall be effective unless in writing and signed by both parties.

 

5.5. SEVERABILITY

 

If any provision or portion of this Agreement is found to be invalid, illegal, or unenforceable in any jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable, such provision in any other jurisdiction. The remaining provisions of this Agreement shall remain in full force and effect, and the invalid or unenforceable provision shall be amended or replaced by a valid, enforceable provision that most closely achieves the parties’ original intent.

 

5.6. WAIVER

 

No waiver by either party of any breach or non-fulfillment of any provision of this Agreement shall be deemed to be a waiver of any subsequent breach or non-fulfillment, and no waiver shall be effective unless it is in writing and signed by the waiving party.

 

5.7. COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute one and the same instrument. Signatures delivered via electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

5.8. FORCE MAJEURE

 

Neither party shall be liable for any delay or failure to perform its obligations under this Agreement (except for payment obligations) if such delay or failure is due to events beyond the reasonable control of the affected party, including acts of God, fire, flood, war, terrorism, government action, labor disputes, or other similar events.

 

 

5.9. NOTICES

 

All notices or other communications required or permitted under this Agreement shall be in writing and shall be deemed effectively given (i) upon personal delivery to the party to be notified, (ii) when sent by email or facsimile if sent during regular business hours of the recipient, or (iii) one (1) business day after deposit with a reputable overnight courier, specifying next-day delivery, with written verification of receipt. Notices shall be sent to the respective parties at the addresses set forth below or to such other address as may be designated by a party in writing.

 

5.10. HEADINGS

 

The headings in this Agreement are included for convenience of reference only and shall not affect the interpretation of this Agreement.

 

5.11. COUNTERPARTS; ELECTRONIC SIGNATURES

 

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail, or other electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

 

{Signature Page Follows}

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Securities Purchase Agreement as of the date first written above.

 

China Pharma Holdings, Inc.
By:
Name:	Zhilin Li
Title:	CEO & Chairman

 

Purchaser:
[__________]
By:
Name:	[__________]
Title:	[__________]

 

Exhibits:

 

Exhibit A – Purchase Notice

Exhibit B – Issuance Authorization

Exhibit C - Irrevocable Transfer Agent Instruction Letter & Medallion Signature Waiver

Exhibit D - Legal Opinion Letter

 

 

11

Exhibit 5.1

 

^FLG Flangas Law Group

 

Writer’s email: kps@fdlawlv.com

 

December 12, 2024

 

Equiniti Trust Company

Attn: Chad Dalton

Transfer Department

1110 Centre Pointe Curve, Suite 101

Mendota Heights, MN 55120

chad.dalton@equiniti.com

 

Board of Directors

China Pharma Holdings, Inc.

Second Floor, No. 17, Jinpan Road

Haikou, Hainan Province, China 570216 

 

Re:

China Pharma Holdings, Inc.

 

Ladies and Gentlemen:

 

We have acted as special Nevada counsel to China Pharma Holdings, Inc., a Nevada corporation (the “Company”), in connection with a Registration Statement on Form S-3 (File No. 333-276481) (the “Registration Statement”), heretofore filed with the U.S. Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933, as amended (the “Securities Act”) and declared effective by the SEC on February 14, 2024, with respect to the registration of up to $50,000,000 of any combination of (i) common stock, par value $0.001 per share (the “Common Stock”), of the Company, (ii) preferred stock, par value $0.001 per share, of the Company (the “Preferred Stock”), (iii) debt securities of the Company (the “Debt Securities”), (iv) warrants to purchase Common Stock, Preferred Stock, Debt Securities or Units (as defined below) (“Warrants”), (v) units comprised of Common Stock, Preferred Stock, Debt Securities and Warrants in any combination (“Units”) or (vi) rights to purchase shares of Common Stock or Preferred Stock (“Rights”). The Common Stock, Preferred Stock, Warrants, Debt Securities, Units and Rights are sometimes referred to collectively herein as the “Securities.” Securities may be issued in an unspecified number (with respect to Common Stock, Preferred Stock, Warrants, Units and Rights) or in an unspecified principal amount (with respect to Debt Securities). The Registration Statement provides that the Securities may be offered separately or together, in separate series, in amounts, at prices and on terms to be set forth in one or more prospectus supplements (each a “Prospectus Supplement”) to the prospectus contained in the Registration Statement. As of December 12, 2024, the Company has entered into a Securities Purchase Agreement with Liqueous LP (the “Securities Purchase Agreement”) to purchase a total number of up to 4,000,000 shares of Common Stock with an aggregate purchase amount of up to $600,000, not to exceed 20% of the outstanding Common Stock. We are providing this letter to express our opinion confirming the eligibility of the issuance of the Common Stock pursuant to the Securities Purchase Agreement.

 

 

3275 South Jones Blvd., Suite 105 | Las Vegas, Nevada 89146 | Phone: (702) 307-9500 | Fax: (702) 382-9452

 

 

December 12, 2024

Page 2 of 4

 

In arriving at the opinion expressed below, we have examined such corporate proceedings, records and documents, and such matters of law, as we have considered necessary for the purposes of this opinion. As to matters of fact, we have examined and relied upon the representations of the Company contained in the Registration Statement and, where we have deemed appropriate, representations or certificates of officers of the Company or public officials. As part of our examination, we have examined the following documents, among others:

 

A. the Registration Statement (including the prospectus contained therein);

 

B. the Securities Purchase Agreement;

 

C. the Articles of Incorporation of the Company;

 

D. the Bylaws of the Company;

 

E. a Certificate of Good Standing issued by the Secretary of State of the State of Nevada, dated December 11, 2024, certifying that the Company is in existence and in good standing in the State of Nevada;

 

F. certain resolutions of the Board of Directors of the Company;

 

L. certain certificates of the officers of the Company certifying as to certain factual matters.

 

In rendering the opinion expressed below, we have assumed without verification the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to the originals of all documents submitted to us as copies and the authenticity of the originals of such copies, and the due authorization, execution and delivery of all documents by all parties and the validity, binding effect and enforceability thereof (other than the authorization, execution and delivery of documents by the Company and the validity, binding effect and enforceability thereof upon the Company). In addition, we have assumed and not verified the accuracy as to the factual matters of each document we have reviewed and the accuracy of, and each applicable party’s full compliance with, any representations and warranties contained therein. Accordingly, we are relying upon (without any independent investigation thereof) the truth and accuracy of the statements, covenants, representations and warranties set forth in the documents we have reviewed.

 

Based upon the foregoing and subject to the assumptions, exceptions, limitations and qualifications set forth herein, we are of the opinion that:

 

1. The Company is a corporation validly existing and in good standing under the laws of the state of Nevada.

 

 

December 12, 2024

Page 3 of 4

 

2. The Securities Purchase Agreement has been duly authorized, executed and delivered by the Company.

 

3. The shares of Common Stock to be purchased pursuant to the Securities Purchase Agreement have been duly authorized for issuance and sale pursuant to the Securities Purchase Agreement and, when issued and delivered by the Company pursuant to the Securities Purchase Agreement against payment of the consideration set forth therein, will be validly issued, fully paid and nonassessable.

 

4. The execution and delivery of the Securities Purchase Agreement by the Company, and the performance by the Company of its obligations under such agreement (other than performance by the Company of its indemnification obligations, as to which no opinion is rendered) will not result in any (i) violation of the provisions of the Articles of Incorporation, as amended, or bylaws of the Company; (ii) conflict with or result in a breach of any of the terms and provisions of, or constitute a default (or an event which with notice or lapse of time, or both, would constitute a default) under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any of the agreements (the “Material Agreements”) that are exhibits contained in filings made by the Company pursuant to the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and incorporated by reference in the Registration Statement; or (iii) will not result in any violation of any federal or Nevada law or, to our knowledge any administrative regulation or administrative or court decree, applicable to the Company.

 

5. No consent, approval, authorization or other order of, or registration or filing with, any court or other governmental or regulatory authority or agency, is required for the consummation of the transactions contemplated by the Securities Purchase Agreement, except such as have been obtained or made by the Company and are in full force and effect under the Securities Act or applicable state securities or blue sky laws.

 

6. To our knowledge, the Company is not in violation of its Articles of Incorporation, as amended, or in default under any of the Material Agreements, except for such violation or default as would not, individually or in the aggregate, result in a Material Adverse Change.

 

We render this opinion only with respect to, and we express no opinion herein concerning the application or effect of the laws of any jurisdiction other than, the existing laws of the state of Nevada. We express no opinion with respect to any other laws or with respect to the “blue sky” securities laws of any state.

 

We render this opinion subject to applicable bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfer or conveyance), reorganization, moratorium and other similar laws affecting creditors’ rights generally and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law), including, without limitation, (a) the possible unavailability of specific performance, injunctive relief or any other equitable remedy and (b) concepts of materiality, reasonableness, good faith and fair dealing, and we express no opinion herein with respect to provisions relating to severability or separability.

 

 

December 12, 2024

Page 4 of 4

 

No opinion is expressed herein as to any matter pertaining to the contents of the Registration Statement, other than as and to the extent expressly stated herein with respect to the authorization and issuance of the Common Stock.

 

This opinion is limited to the specific issues addressed herein, and no opinion may be inferred or implied beyond that expressly stated herein. This opinion speaks only as of the date of this letter, and we do not undertake by delivery of this opinion or otherwise to advise you of any change in any matter set forth herein, whether based on a change in law (whether by legislative action, judicial decision, administrative decision or otherwise) or a change in any fact arising subsequent to the date hereof that might affect any of the opinions expressed herein.

 

This opinion is furnished for the benefit of the addressee hereof and for use solely in connection with the transactions contemplated by the Securities Purchase Agreement and may not be used, circulated, quoted or otherwise relied upon for any other purpose.

 

	Very truly yours,
	/s/ FLANGAS LAW GROUP
	FLANGAS LAW GROUP

 

 Exhibit 99.1

 

China Pharma Announces the Entry of “At-The-Market” Equity Offering

 

HAIKOU CITY, December 13, 2024 – China Pharma Holdings, Inc. (NYSE American: CPHI) (“China Pharma,” or the “Company”), a specialty pharmaceutical company, today announced that it has filed a prospectus supplement with the U.S. Securities and Exchange Commission (the “SEC”) under which the Company may offer and sell from time to time shares of common stock, par value $0.001 per share (the “Common Stock”), with an aggregate offering price of up to $600,000 (the “Financing”).

 

The shares will be offered pursuant to a certain Securities Purchase Agreement (the “SPA”) the Company entered into with certain investor (the “Investor”) on December 12, 2024. Pursuant to the SPA, the Investor agrees to, at its discretion, purchase, from time to time over the commitment period from December 12, 2024 through December 31, 2024, through one or more closings, up to $600,000 worth of the Common Stock, at the prices related to prevailing market prices, which equals to the lower of (i) the closing price the day prior to the purchase notice, or (ii) the five (5) day average closing prices of the Company as reported by Bloomberg or on the NYSE American Market’s website and in accordance with NYSE Rule Section 312.03(c), provided, in no event shall the price per share be lower than $0.15 per share. The timing of any sales and the number of Common Stock sold, if any, will depend on a variety of factors to be determined by the Investor. There can be no assurance that the Company will be able to issue and sell any Common Stock.

 

The prospectus supplement filed today adds to, updates or otherwise changes information contained in the accompanying prospectus contained in the Company’s shelf registration statement on Form S-3 (File No. 333-276481) filed by the Company with the SEC on January 12, 2024, as amended, and which became effective on February 6, 2024. Prospective investors should read the prospectus in that registration statement and the prospectus supplement (including the documents incorporated by reference therein) for more complete information about the Company and the Financing, including the risks associated with investing in the Company. Copies of the prospectus supplement and related prospectus may be obtained from China Pharma Holdings, Inc., Attn: Zhilin Li, 2nd Floor, No. 17, Jinpan Road, Haikou, Hainan Province, China 570216. You may also obtain these documents free of charge when they are available by visiting EDGAR on the SEC’s website at www.sec.gov.

 

This press release shall not constitute an offer to sell or a solicitation of an offer to buy, nor will there be any sale of these securities, in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offer, solicitation or sale will be made only by means of the prospectus supplement and the accompanying prospectus.

 

About China Pharma Holdings, Inc.

 

China Pharma Holdings, Inc. is a specialty pharmaceutical company that develops, manufactures and markets a diversified portfolio of products, focusing on conditions with high incidence and high mortality rates in China, including cardiovascular, CNS, infectious, and digestive diseases. The Company’s cost-effective business model is driven by market demand and supported by new GMP-certified product lines covering the major dosage forms. In addition, the Company has a broad and expanding nationwide distribution network across all major cities and provinces in China. The Company’s wholly-owned subsidiary, Hainan Helpson Medical & Biotechnology Co., Ltd., is located in Haikou City, Hainan Province. For more information about China Pharma Holdings, Inc., please visit http://www.chinapharmaholdings.com/ The Company routinely posts important information on its website.

 

Forward-Looking Statements

 

Certain statements in this press release constitute forward-looking statements for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Any statements set forth above that are not historical facts are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such risks and uncertainties may include, but are not limited to: the achievability of financial guidance; success of new product development; unanticipated changes in product demand; increased competition; downturns in the Chinese economy; uncompetitive levels of research and development; and other information detailed from time to time in the Company’s filings and future filings with the United States Securities and Exchange Commission. The forward-looking statements made herein speak only as of the date of this press release and the Company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the Company’s expectations, except as required by applicable law or regulation.

 

For more information, please contact Investor Relations:

 

China Pharma Holdings, Inc.

Ms. Diana Na Huang

Phone: +86-898-6681-1730 (China)

Email: hps@chinapharmaholdings.com

 

v3.24.3

Cover	Dec. 12, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 12, 2024
Entity File Number	001-34471
Entity Registrant Name	CHINA PHARMA HOLDINGS, INC.
Entity Central Index Key	0001106644
Entity Tax Identification Number	73-1564807
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	Second Floor
Entity Address, Address Line Two	No. 17, Jinpan Road
Entity Address, Address Line Three	Haikou
Entity Address, City or Town	Hainan Province
Entity Address, Country	CN
Entity Address, Postal Zip Code	570216
City Area Code	86
Local Phone Number	898-6681-1730
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	CPHI
Security Exchange Name	NYSEAMER
Entity Emerging Growth Company	false

---