SCHEDULE 13D/A: Triller Group Secures $10 Million Convertible Note and Warrant Investment from KCP Holdings, Terminates Prior Agreements

Triller Group Inc. has entered into a new agreement with KCP Holdings Limited for a $10 million senior subordinated secured convertible note and warrants, while simultaneously terminating previous unfunded securities purchase and indemnification agreements.

Summary

• Triller Group Inc. (the "Company") and KCP Holdings Limited ("KCP") entered into a Senior Subordinated Secured Convertible Note and Warrant Purchase Agreement on April 11, 2025.
• Under this agreement, KCP will purchase a convertible note with a principal amount of $10 million and one warrant to purchase 10,000,000 shares of Common Stock.
• The source of funds for this purchase is KCP's investment capital, and the investment is for general investment purposes, not to change or influence control of the Issuer.
• Concurrently, KCP and Triller will terminate a previous Securities Purchase Agreement dated January 24, 2025, under which KCP did not make any payment for 6,363,636 shares of Common Stock and a warrant to purchase the same number of shares.
• A Director Indemnification Agreement with Roger C. Kennedy (who was never a director) and a previous Registration Rights Agreement and Warrant are also being terminated.
• The new warrant is exercisable one year after a Qualified Equity Financing (QEF) at an exercise price of $1.00 per share.
• The new convertible note is convertible into Common Stock at maturity or following a Qualified Equity Financing at a 20% discount to the QEF valuation.
• Triller Holdco LLC, a subsidiary of Triller, will grant KCP a security interest in 833,3333 shares of common stock it holds in Bare Knuckle Fighting Championships, Inc. (BKFC) as collateral.
• The Company will use the proceeds from the sale of the securities for business building and working capital purposes.

Sentiment

Score: 6

Explanation: The securing of $10 million in new financing is a positive step for Triller Group, addressing working capital needs and business building. However, the fact that this replaces a prior unfunded agreement, coupled with the need to resolve existing Yorkville debt and potential shareholder dilution from conversion/exercise, introduces significant caveats. The overall sentiment is cautiously optimistic, as the funding is crucial but comes with complexities and past execution issues.

Positives

• Secured $10 million in new financing from KCP Holdings Limited via a convertible note and warrants, providing capital for business building and working capital.
• Termination of previous unfunded agreements removes prior unfulfilled obligations and clarifies the capital structure.
• The Company will obtain new registration rights for KCP Holdings Limited, facilitating future liquidity for the investor.
• The Company's Board of Directors has authorized the issuance of the securities and the consummation of the transactions, indicating internal corporate approval.

Negatives

• A previous Securities Purchase Agreement (January 24, 2025) for 6,363,636 shares and warrants was terminated because KCP did not make any payment, indicating a prior failed capital raise attempt.
• The new funding is "subject to and contingent upon funding of the purchase price thereunder and closing of the transaction," implying it is not yet finalized.
• The convertible note allows conversion at a 20% discount to the Qualified Equity Financing valuation, which could lead to significant dilution for existing shareholders.
• The warrant is exercisable at $1.00 per share, which could also lead to dilution.
• The company has existing indebtedness with Yorkville (Yorkville Note) and related agreements that need to be satisfied, terminated, and fully released within 45 days of closing, indicating ongoing financial obligations.

Risks

• Funding Contingency: The issuance of the Note and New Warrant is subject to and contingent upon funding of the purchase price and closing of the transaction.
• Shareholder Approval for Dilution: If the issuance of Common Shares upon conversion or exercise exceeds the Nasdaq Capital Market's Exchange Cap, shareholder approval will be required, and the Company commits to holding multiple meetings until approval is received.
• Nasdaq Listing Compliance: The Company must maintain its Nasdaq listing and comply with listing maintenance requirements; delisting is an Event of Default for the note.
• Yorkville Agreements: The Company must use best efforts to satisfy, terminate, discharge, and fully release the Yorkville Note and other Yorkville Agreements, including releasing any liens on BKFC shares, and settle any related litigation within 45 days of the Closing Date. Failure to do so could be an Event of Default.
• Subordination: The new note is "senior subordinated secured," meaning it is subordinated to other senior debt (like the Yorkville Note until released).
• General Business Risks: Standard risks associated with the company's operations, financial condition, and prospects, as well as compliance with laws and regulations, are implied by the representations and warranties.
• Litigation: Existing litigation (Yorkville Litigation) and potential future litigation are risks.
• Material Adverse Effect: Any change, development, circumstance, fact, or effect that has or would reasonably be expected to have a material adverse effect on the business, results of operations, assets, or financial condition of the Company and its Subsidiaries.

Future Outlook

The Company intends to use the proceeds from the new financing for business building and working capital purposes. It commits to maintaining its Nasdaq listing, timely filing SEC reports, and taking necessary corporate actions to ensure sufficient authorized shares for future conversions and exercises. The Company also aims to satisfy and terminate all existing Yorkville Agreements and related litigation within 45 days of the closing date.

Management Comments

• "The Reporting Persons will acquire the Note and New Warrant for investment purposes, and not with the purpose or effect of changing or influencing the control of the issuer, or in connection with or as a participant in any transaction having such purpose or effect." (Referring to KCP Holdings Limited and Roger C. Kennedy)
• "Roger C. Kennedy never was, and is not currently, a member of the board of directors of the Issuer or any committee thereof."
• "The Company shall use its best efforts (i) to satisfy, terminate, discharge and fully release the Yorkville Note and the other Yorkville Agreements... (ii) to unconditionally and forever settle any Actions related to the Yorkville Agreements and with Yorkville and its Affiliates (the Yorkville Litigation) and (iii) to terminate any Contracts between or among the Company or any of its Subsidiaries, on the one hand, and Yorkville and any of its Affiliates on the other hand, without any remaining or ongoing obligations or liabilities of the Company or any of its Subsidiaries pursuant to the Yorkville Agreements or otherwise, in each case of clauses (i) to (iii), within forty-five (45) days of the Closing Date."
• "The Company shall use the proceeds from the sale of the Securities for business building and working capital purposes and not to satisfy any Losses related to or arising out of any claim, dispute, settlement or any other Action, whether or not in connection with a proceeding."

Industry Context

This financing agreement reflects the ongoing need for capital among growth-oriented companies in the media and entertainment sector, particularly those involved in digital content and emerging sports like Bare Knuckle Fighting Championships. The structure of the deal, involving convertible notes and warrants, is a common method for private investors to provide capital while retaining potential upside through equity conversion, often seen in companies seeking to scale operations or manage existing debt. The termination of a prior unfunded agreement highlights the challenges some companies face in securing committed capital in a dynamic market.

Corporate Governance

Legal Proceedings

• The Company commits to using its best efforts to unconditionally and forever settle any Actions related to the Yorkville Agreements and with Yorkville and its Affiliates (the "Yorkville Litigation") within 45 days of the Closing Date.
• A final judgment or judgments for the payment of money aggregating in excess of $5,000,000 against any Company Party, if not bonded, discharged, settled, or stayed, constitutes an Event of Default.

Related Party Transactions

• The transaction involves KCP Holdings Limited and Roger C. Kennedy, who are the reporting persons for this Schedule 13D/A.
• The previous Securities Purchase Agreement and Director Indemnification Agreement, which are now terminated, also involved KCP Holdings Limited and Roger C. Kennedy.

Stakeholder Impact

• Shareholders: Potential dilution from the conversion of the note and exercise of warrants. The need for shareholder approval for excess share issuance highlights this impact.
• Creditors: The new note is senior subordinated secured, impacting the priority of other creditors. The pledge of BKFC shares as collateral affects asset availability for other creditors. The requirement to satisfy and release Yorkville Note and related liens is significant for other creditors.
• Employees: Proceeds are for business building and working capital, which could support continued operations and employment.
• Customers/Suppliers: Improved working capital could lead to more stable operations and better engagement with customers and suppliers.

Next Steps

• KCP Holdings Limited to deliver the $10 million subscription amount within 5 business days of agreement execution.
• Company to deliver the Note and Warrant to KCP Holdings Limited upon funding and closing.
• Company to cause the shares issuable upon conversion/exercise to be approved for listing on the Nasdaq Capital Market.
• Company to timely file all required SEC reports to maintain its status as an Exchange Act reporting issuer.
• Company to use best efforts to satisfy, terminate, discharge, and fully release the Yorkville Note and other Yorkville Agreements, and settle related litigation within 45 days of the Closing Date.
• Company to file a Form D with respect to the securities if required under Regulation D.
• Company to make all required filings and reports under applicable state securities or Blue Sky laws.
• Company to hold shareholder meetings to approve Excess Share Issuance if the Exchange Cap is reached, continuing until approval is received.

Key Dates

Recommendation

Keywords

Triller Group Inc., KCP Holdings Limited, Convertible Note, Warrant, SEC Filing, Schedule 13D/A, Capital Raise, Financing, Corporate Governance, Risk Management, Dilution, Nasdaq Listing, Bare Knuckle Fighting Championships, Yorkville Note, Securities Exchange Act of 1934, Investment