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7Road Holdings Limited
第七大道控股有限公司
(Incorporated in the Cayman Islands with limited liability)
(Stock Code: 797)
SUPPLEMENTAL ANNOUNCEMENT TO 2019 ANNUAL REPORT
This announcement is made to provide supplemental information to the annual report of 7Road Holdings Limited (the "Company", together with its subsidiaries, the "Group") for the year ended 31 December 2019 published by the Company on 30 June 2020 (the "2019 Annual Report").
Reference is made to the 2019 Annual Report. Save as disclosed in this announcement, the content of the 2019 Annual Report remains unchanged.
USE OF PROCEEDS
Reference is made to the prospectus of the Company dated 29 June 2018 (the "Prospectus"), which contained the proposed use of net proceeds (the "Net Proceeds") raised from the global offering of shares of the Company.
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In addition to the information disclosed in the section headed "Directors' Report - Use of Net Proceeds" in the 2019 Annual Report, the board (the "Board") of directors of the Company would like to provide additional information relation to the use of Net Proceeds as follows:
Unutilized | Expected timeline | |||||||
Net proceeds | Utilization as | amount as at | for utilizing the | |||||
from global | at 31 December | 31 December | remaining Net | |||||
Business Strategy | offering | 2019 | 2019 | Proceeds | ||||
(RMB million) | (RMB million) | (RMB million) | ||||||
Proprietary online games and | 230.7 | 191.9 | 38.8 | On or before | ||||
other intellectual properties | 31 December | |||||||
("IPs") | 2021 | |||||||
Acquisition of popular IPs | 230.7 | 230.7 | - | - | ||||
or other related assets, or | ||||||||
investment in or acquisition | ||||||||
of overseas or China-based | ||||||||
popular IP providers | ||||||||
Investment in game developers | 153.9 | 153.9 | - | - | ||||
and publishers | ||||||||
Fund of our game publishing | 76.9 | 76.9 | - | - | ||||
business | ||||||||
Working capital and other general | 76.9 | 76.9 | - | - | ||||
corporate purposes | ||||||||
Total | 769.1 | 730.3 | 38.8 | - | ||||
The Board confirmed that there was no material change to the plan as to the use of Net Proceeds during the year ended 31 December 2019.
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PERFORMANCE GUARANTEE
Reference is made to the circular of the Company dated 26 September 2019 (the "Circular") in relation to the acquisition of Osmanthus Vale Holdings Limited. Unless otherwise defined, capitalized terms used herein shall have the same meanings as those defined in the Circular.
Pursuant to the Sale and Purchase Agreement, the Company and the Vendors agreed to set out various compensation terms based on the guaranteed performance of the Target Business for the Profit Guaranteed Years, which, among others, included the Profit Compensation, the Goodwill Impairment Compensation and the Aggregate Compensation for 2019 for the financial year ended 31 December 2019 (collectively, the "2019 Performance Guarantee"), as a protection for the Company. As set forth in the Circular, the Net Profit Benchmark of the Target Business for the financial year ended 31 December 2019 was RMB117.00 million. Please refer to the Circular for further details of the 2019 Performance Guarantee.
The Board is pleased to announce that, pursuant to the results of the audit of the Osmanthus Vale Holdings Limited and its subsidiaries for the year ended 31 December 2019, the Actual Net Profit of the Target Business for the financial year of 2019 exceeded the Net Profit Benchmark. Therefore, the 2019 Performance Guarantee has been fulfilled. Accordingly, pursuant to the Sale and Purchase Agreement, neither the Profit Compensation nor the Goodwill Impairment Compensation would be incurred, and the Aggregate Compensation for 2019 was therefore nil.
By order of the Board
7Road Holdings Limited
Meng Shuqi
Chairman
Wuxi, the PRC, 24 August 2020
As at the date of this announcement, the executive directors of the Company are Mr. Meng Shuqi, Mr. Li Zhengquan and Mr. Yang Cheng; and the independent non-executive directors of the Company are Mr. Xue Jun, Ms. Li Yiqing and Ms. Wang Ying.
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