GD Culture Group Acquires 07 Trade & Services, Issues 10M Shares

TL;DR

**GD Culture Group just bought 07 Trade & Services by issuing 10M new shares, diluting existing stock.**

AI Summary

GD Culture Group Ltd (formerly Code Chain New Continent Ltd) completed the acquisition of 07 Trade & Services on January 11, 2024. This acquisition was paid for by issuing 10,000,000 shares of GD Culture Group's common stock to the seller of 07 Trade & Services. This matters to investors because it signifies a strategic expansion for GD Culture Group, potentially diversifying its business operations beyond its current 'Wholesale-Metals, Minerals' classification, but also dilutes existing shareholders by issuing a large number of new shares.

Why It Matters

This acquisition expands GD Culture Group's business scope, but the issuance of 10,000,000 new shares will dilute the ownership stake of current shareholders.

Risk Assessment

Risk Level: medium — The issuance of 10,000,000 new shares represents significant dilution for existing shareholders, which could impact share price.

Analyst Insight

A smart investor would evaluate the strategic benefits of acquiring 07 Trade & Services against the dilution caused by issuing 10,000,000 new shares, and monitor the company's next earnings report for integration progress and financial impact.

Key Numbers

• 10,000,000 — Shares Issued (Number of common stock shares issued for the acquisition of 07 Trade & Services)

Key Players & Entities

• GD Culture Group Ltd (company) — the acquiring company
• 07 Trade & Services (company) — the acquired company
• 10,000,000 shares (dollar_amount) — the consideration for the acquisition
• January 11, 2024 (date) — date of acquisition completion

Forward-Looking Statements

• The stock price of GD Culture Group Ltd may experience downward pressure due to shareholder dilution. (GD Culture Group Ltd) — medium confidence, target: Q1 2024
• GD Culture Group Ltd's financial statements will reflect the consolidation of 07 Trade & Services in future reports. (GD Culture Group Ltd) — high confidence, target: Q1 2024 earnings report

FAQ

Key Financial Figures

• $0.0001 — ch registered Common Stock, par value $0.0001 GDC Nasdaq Capital Market Item 2.
• $2.7820 — f the Company (the "Shares"), valued at $2.7820 per share, to Beijing Hehe or its assig

Filing Documents

• ea191771-8k_gdculture.htm (8-K) — 26KB
• 0001213900-24-004649.txt ( ) — 194KB
• gdc-20240111.xsd (EX-101.SCH) — 3KB
• gdc-20240111_lab.xml (EX-101.LAB) — 33KB
• gdc-20240111_pre.xml (EX-101.PRE) — 22KB
• ea191771-8k_gdculture_htm.xml (XML) — 3KB

01 Completion of Acquisition or Disposition

Item 2.01 Completion of Acquisition or Disposition of Assets . As previously reported on the current report on Form 8-K by GD Culture Group Limited (the "Company"), on November 10, 2023, the Company entered into an amended and restated equity purchase agreement (the "Agreement") with Shanghai Highlight Entertainment Co., Ltd. ("Shanghai Highlight"), an indirect subsidiary of the Company, and Beijing Hehe Property Management Co., Ltd. ("Beijing Hehe"). Prior to the Agreement, Shanghai Highlight owns 60% of the total equity interest in the Xianzhui Technology Co., Ltd. (the "Joint Venture") and Beijing Hehe owns 20% of the total equity interest in the Joint Venture. Pursuant to the Agreement, Shanghai Highlight agreed to purchase the 13.3333% equity interest in the Joint Venture from Beijing Hehe and the Company agreed to issue 400,000 shares of common stock of the Company (the "Shares"), valued at $2.7820 per share, to Beijing Hehe or its assigns. On January 11, 2024, the Company issued the Shares and the transaction is completed.

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. To the extent required by this Item 3.02, the information contained in Item 2.01 is incorporated herein by reference. The issuance of the Shares was made in reliance on the exemption provided by Regulation S of the Securities Act of 1933, as amended (the "Securities Act"). The Company made the determination based upon the factors that none of Beijing Hehe or its affiliates that received the Shares is a "U.S. Person" as that term is defined in Rule 902(k) of Regulation S under the Securities Act, that each of Beijing Hehe and its affiliates was acquiring the securities for its own respective account and not as nominees or agents, and not with a view to the resale or distribution thereof, and that each of Beijing Hehe and its affiliates understood that the securities may not be sold or otherwise disposed of without registration under the Securities Act or an applicable exemption therefrom.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. Exhibit Index Exhibit No. Description 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) 1

SIGNATURES

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. Date: January 19, 2024 GD Culture Group Limited By: /s/ Xiao Jian Wang Name: Xiao Jian Wang Title: Chief Executive Officer, President and Chairman of the Board 2

View Full Filing

View this 8-K filing on SEC EDGAR