Business
Jiuzi Holdings Enters into a Non-Binding LOI for the Acquisition of Shenzhen Maigesong
HANGZHOU, China, April 3, 2024 /PRNewswire/ -- Jiuzi Holdings Inc. (Nasdaq: JZXN; the "Company" or "JZXN"), an emerging new energy vehicle (NEV) dealership
About this update from Jiuzi Holdings, Inc.
[{"type":"text","content":"HANGZHOU, China, April 3, 2024 /PRNewswire/ -- Jiuzi Holdings Inc. (Nasdaq: JZXN; the \"Company\" or \"JZXN\"), an emerging new energy vehicle (NEV) dealership group operating under the brand name \"Jiuzi\" in China, announced today that Shenzhen Jiuzi New Energy Holding Group Co., Ltd. (\"Shenzhen Jiuzi\"), a wholly owned subsidiary of the Company, entered into a non-binding letter of intent (\"LOI\") for the acquisition of Shenzhen Maigesong Electric Technology Co., Ltd. (\"Shenzhen Maigesong\").\n\nPursuant to the terms of the LOI, Shenzhen Jiuzi will acquire 100% of the equity of Shenzhen Maigesong in exchange for certain restricted share compensation of the Company and upon the completion of the acquisition, the Company shall invest RMB 30 million to fund the construction of Shenzhen Maigesong's rechargeable lithium battery production line. This investment will be divided into two stages, with RMB 15 million to be invested by the end of April 2024 and another RMB 15 million by the end of November 2024. The construction of this production line will be led by the original shareholders of Shenzhen Maigesong, Mr. Li Song and Mr. Fan Xuejun (the \"Maigesong Shareholders\"). Upon the completion of the battery production line, it will immediately commence production and sales of rechargeable lithium battery products.\nThe LOI includes an earnout provision which provides that Shenzhen Maigesong shall achieve a revenue target of RMB 119.81 million by the end of December 2025, and a revenue target of RMB 504.22 million by the end of December 2026. The parties agreed in the LOI that if the actual revenue generated between 2024 and 2025 falls below 80% of the revenue target, the Maigesong Shareholders will provide corresponding compensation measures with their held shares and lose control of Shenzhen Maigesong.\nThe inclusion of the earnout provision holds significant importance for both the Company and Shenzhen Maigesong. It clearly defines the rights and responsibilities of both parties and represents not only a risk and challenge but also opportunity and motivation. Both parties will work together to achieve the revenue targets and promote the sustained development and growth of the enterprise.\nAbout Jiuzi Holdings, Inc.\nJiuzi Holdings, Inc., headquartered in Hangzhou, China, and established in 2017, franchises and operates retail...