Filing Details

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SCHEDULE 13D

(1)

Percentage calculated based on the 35,893,421 ordinary shares, par value $0.00375 per share (“Ordinary Shares”) outstanding reported by UTStarcom Holdings Corp. (the “Issuer”) in Item 6 of its Annual Report on Form 20-F filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2018.

 

ITEM 3.

Source and Amount of Funds or Other Consideration

 

Item 3 of the Original Schedule 13D is hereby supplemented by adding the following at the end thereof:

 

Tonghao Cayman is seeking to enforce its rights under the Dasan Purchase Agreement through arbitration at the Hong Kong International Arbitration Center, pursuant to the terms of the Dasan Purchase Agreement.  Tonghao Cayman is seeking damages, rather than specific performance of the contract, and therefore the outcome of the arbitration will not result in Tonghao Cayman or the New Tonghao Group owning additional Ordinary Shares.  Following briefing by the parties, a hearing was held in Hong Kong on December 18 and 19, 2018.  The arbitrators have requested supplemental briefing by the parties, to be submitted by January 18, 2019.

 

Pursuant to a purchase and sale agreement dated November 30, 2018 (the “Tongding Purchase Agreement”), Tongding Interconnection agreed to indirectly acquire the interests in the Ordinary Shares held by Tonghao Cayman of each of TongDing, Hangzhou Xingqiong Investment LLP, a limited partnership organized under the laws of the People’s Republic of China (“Xingqiong”), and Shanghai Yujing Investment Center (Limited Partnership), a limited partnership organized under the laws of the People’s Republic of China (“Yujing”), through the purchase of all of the interests of Tonghao Shanghai (the “Interests”), Tonghao Cayman’s sole owner.  The transactions contemplated by the Tongding Purchase Agreement were consummated on January 14, 2019, following receipt of regulatory clearance from the government of the People’s Republic of China.  The aggregate purchase price was Renminbi (“RMB”) 109,305,000 (equivalent, in U.S. Dollars, to approximately $15,905,850 based on published exchange rates), of which TongDing received 40%, Xingqiong received 30% and Yujing received 30%, reflecting their respective ownership shares in Tonghao Shanghai.  Tongding Interconnection obtained the funds to purchase the Interests from its working capital.

 

The foregoing summary of the Tongding Purchase Agreement is not a complete description thereof and is qualified in its entirety by the full text of such agreement, which is filed as Exhibit 99.10 hereto and incorporated herein by reference.

 

ITEM 4.

Purpose of Transaction

 

Item 4 of the Original Schedule 13D is hereby amended and restated in its entirety to read as follows:

 

The New Tonghao Group purchased the Ordinary Shares beneficially owned by them with a view towards strengthening and promoting strategic and business cooperation between Tongding Interconnection and the Issuer.  The New Tonghao Group will review its investment in the Issuer on a continuing basis and, depending on general market and economic conditions, the performance and prospects of the Issuer, other investment opportunities available to the members of the New Tonghao Group, the market price of the Ordinary Shares and other investment considerations, factors and future developments, the New Tonghao Group may at any time and from time to time (subject to applicable law) hold, vote, acquire or dispose of or otherwise deal with securities (through open market purchases, private agreements with the Issuer or other parties, or otherwise, as applicable), or suggest or take a position with respect to the management, operations or capital structure, of the Issuer.

 

The New Tonghao Group, as a significant and active shareholder holding approximately 9.9% of the Issuer’s outstanding Ordinary Shares and with the intention of strengthening and promoting strategic and business cooperation between Tongding Interconnection and the Issuer, has engaged, and intends to continue to engage, in communications with the Issuer’s directors, management and other stockholders regarding potential areas for future cooperation with the goal of improving the Issuer’s business and financial performance.  Such discussions could include, but would not be limited to, the business, operations, investment strategy and portfolio, including with respect to industrial integration, financial condition, corporate governance, management, and future plans (including proposed corporate transactions of a significant nature) of the Issuer, including any plans or proposals regarding the same, as well as any other matters which the New Tonghao Group believes could be relevant to preserving and increasing the value of its investment in the Issuer’s Ordinary Shares and efforts to increase shareholder value generally.

 

 

Tongding Interconnection, a member of the New Tonghao Group, and the Issuer entered into a strategic cooperation agreement, dated as of September 11, 2018, pursuant to which the parties will consider and cooperate on acquisitions or business combinations by the Issuer, expansion of the Issuer’s sales and marketing efforts to existing and potential customers, and expansion of the Issuer’s product lines, in attractive markets where the Issuer does not currently have extensive operations or sales.  However, the New Tonghao Group cannot predict whether any of the foregoing activities will ultimately result in plans or proposals that would be presented to the Issuer or its board or shareholders.  Except as described herein, the New Tonghao Group does not have any plans or proposals which relate to, or could result in, any of the actions described in paragraphs (a) through (j) of the instructions to Item 4 of Schedule 13D.

 

The New Tonghao Group may, at any time and from time to time, review or reconsider its position and/or change its purpose and/or formulate plans, strategies or proposals and take such actions with respect to its investment in the Issuer, including any or all of the actions described in the foregoing paragraphs.

 

ITEM 5.

Interest in Securities of the Issuer

 

Item 5 of the Original Schedule 13D is hereby amended and restated in its entirety as follows:

 

(a)-(b) Based on the most recent information available, the aggregate number and percentage of the Ordinary Shares (the securities identified pursuant to Item 1 of this Amendment) that are beneficially owned by each of the New Tonghao Group members is set forth in boxes (11) and (13) of the cover pages to this Amendment for each of the New Tonghao Group members, and such information is incorporated herein by reference.  The percentages reported herein are calculated based on the 35,893,421 Ordinary Shares reported outstanding by the Issuer in Item 6 of its Annual Report on Form 20-F filed with the SEC on March 31, 2018.

 

Tonghao Cayman is the direct beneficial owner of 3,500,000 Ordinary Shares.

 

Tonghao Shanghai, through its ownership of Tonghao Cayman, may be deemed to share voting and dispositive power over the Ordinary Shares beneficially owned by Tonghao Cayman.

 

Tongding Interconnection, through its ownership of Tonghao Shanghai, may be deemed to share voting and dispositive power over the Ordinary Shares beneficially owned by Tonghao Cayman.

 

TongDing, through its control of Tongding Interconnection, may be deemed to share voting and dispositive power over the Ordinary Shares beneficially owned by Tonghao Cayman.

 

The numbers of Ordinary Shares as to which each of the New Tonghao Group members has sole voting power, shared voting power, sole dispositive power and shared dispositive power is set forth in boxes (7), (8), (9) and (10), respectively, on the cover page to this Schedule 13D for each of the New Tonghao Group members, and such information is incorporated herein by reference.

 

(c) Except as described in Item 3 and Item 4, none of the New Tonghao Group members have engaged in any transactions in the Ordinary Shares during the sixty days prior to the obligation to file this Amendment.  To the knowledge of the New Tonghao Group, there have been no transactions by any director or executive officer of any of the New Tonghao Group members listed in Schedules I through IV hereto in the Ordinary Shares during the past sixty days.

 

(d) To the best knowledge of the New Tonghao Group, no person is known to have the right to receive or the power to direct the receipt of dividends from or the proceeds from the sale of Ordinary Shares held by the New Tonghao Group other than each of the New Tonghao Group members.

 

(e) Not applicable.

 

 

ITEM 6.

Contracts, Arrangements, Understandings or Relationships with respect to Securities of the Issuer

 

Item 6 of the Original Schedule 13D is hereby amended by replacing the penultimate paragraph thereof with the following:

 

The consummation of the transactions contemplated by the Tongding Purchase Agreement resulted in the termination of the Shareholders’ Agreement, the Supplementary Agreement and the Joint Filing Agreement.

 

Following consummation of the transactions contemplated by the Tongding Purchase Agreement, the New Tonghao Group members entered into a Joint Filing Agreement on January 16, 2019 (the “New Joint Filing Agreement”), pursuant to which they have agreed to file this Statement jointly in accordance with the provisions of Rule 13d-1(k)(1) under the Exchange Act.  A copy of the New Joint Filing Agreement is attached hereto as Exhibit 99.11.  Information with respect to each of the New Tonghao Group members is given solely by such New Tonghao Group member, and no New Tonghao Group member assumes responsibility for the accuracy or completeness of the information concerning the other New Tonghao Group members except as otherwise provided in Rule 13d-1(k).

 

Except as described above or elsewhere in this Statement or incorporated by reference in this Statement, there are no contracts, arrangements, understandings or relationships (legal or otherwise) between the members of the New Tonghao Group or, to the best of their knowledge, any of the persons named in Schedules I-IV hereto and any other person with respect to any securities of the Issuer, including, but not limited to, transfer or voting of any securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or losses, or the giving or withholding of proxies.

 

ITEM 7

Material to be Filed as Exhibits

 

Exhibit No.  Description

 

 

 

 

 

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*Filed herewith.

 

 

 

 

 

 

	TONGHAO (CAYMAN) LIMITED
	By:	/s/ Qian Huifang
	Name:	Qian Huifang
	Title:	Director
	TONGHAO INFORMATION TECHNOLOGY (SHANGHAI) CO., LTD.
	By:	/s/ Qian Huifang
	Name:	Qian Huifang
	Title:	Director
	TONGDING GROUP CO., LTD.
	By:	/s/ Shen Xiaoping
	Name:	Shen Xiaoping
	Title:	Legal Representative
	TONGDING INTERCONNECTION INFORMATION CO., LTD.
	By:	/s/ Yan Yongqing
	Name:	Yan Yongqing
	Title:	Chairman & CEO

 

 

 

SCHEDULE II

 

Name		Present Principal Occupation or Employment		Citizenship
Qian Huifang		Executive Director		People’s Republic of China

 

 

 

 

 

 

 

SCHEDULE III

 

 

 

 

 

 

 

 

SCHEDULE IV

 

Name		Present Principal Occupation or Employment		Citizenship		Business Address
Shen Xiaoping		Director		People’s Republic of China		No. 8 Xiaoping Road, Badu Economic Development Zone, Wujiang District, Suzhou City, Jiangsu Province, People’s Republic of China
Qian Huifang		Director		People’s Republic of China		No. 8 Xiaoping Road, Badu Economic Development Zone, Wujiang District, Suzhou City, Jiangsu Province, People’s Republic of China
Yan Yongqing		Director		People’s Republic of China		No. 8 Xiaoping Road, Badu Economic Development Zone, Wujiang District, Suzhou City, Jiangsu Province, People’s Republic of China
Huang Jian		Director		People’s Republic of China		No. 8 Xiaoping Road, Badu Economic Development Zone, Wujiang District, Suzhou City, Jiangsu Province, People’s Republic of China
Chen Haibin		Director		People’s Republic of China		No. 8 Xiaoping Road, Badu Economic Development Zone, Wujiang District, Suzhou City, Jiangsu Province, People’s Republic of China
Wang Bo		Director		People’s Republic of China		No. 8 Xiaoping Road, Badu Economic Development Zone, Wujiang District, Suzhou City, Jiangsu Province, People’s Republic of China
Lin Jintong		Independent director		People’s Republic of China		Room 603, 21 Jiaoda East Road, Haidian District, Beijing, People’s Republic of China
Tang Zhengguo		Independent director		People’s Republic of China		Room 401, No. 2, Lane 850, Siping Road, Hongkou District, Shanghai, People’s Republic of China
Wang Zebin		Independent director		People’s Republic of China		No. 47-1, Bishuiwan Garden, No. 196 South Yingchun Road, Wuzhong District, Suzhou City, People’s Republic of China