/NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES/
HONG KONG, Jan. 14, 2013 /CNW/ - CINS Holding Corp. (the "Company") (CNSX: CHD) announced that the Company has entered into a letter of intent ("LOI") with JC Media Limited ("JC") and one of its shareholders on January 14, 2011 to acquire 51% equity ownership of JC.
JC is a company duly incorporated under the laws of Hong Kong, with its legal address at Room 703 Kowloon Building, 555 Nathan Road, Kowloon, Hong Kong. JC wholly owns five subsidiaries (together "JC Group") to carry out its online advertising businesses. JC Group has entered into agreements with online advertising agencies in Hong Kong and Taiwan. Mr. Chung Yan Lee, Chief Executive Officer and Director of the Company, indirectly owns 51% of JC through an investment company.
The proposed key terms of the acquisition are as follows:
- The Company will issue 5,100 shares to Mr. Lee at a deemed price of $0.25 per share to acquire 51% equity ownership of JC;
- For the first five years since the date of acquisition, Mr. Lee will receive 30% of the 51% of the consolidated net income of JC Group in cash;
- For the first five years since the date of acquisition, Mr. Lee shall receive the shares of the Company ("Purchase Shares") with a total value equivalent to 70% of JC Group's annual consolidated net income that is attributed and distributed to the Company within 120 days after the end of the fiscal year-end, being December 31. The number of Purchase Shares shall be determined by dividing the total value of the Purchaser Shares as defined above with a conversion price equivalent to the then market price of the shares of the Company; and
- After five years, no more considerations shall be paid for this acquisition.
There is no cash payment upfront for the acquisition. Subsequent payments in cash to Mr. Lee shall be made from the positive cash flows generated by JC Group. Mr. Lee is the controlling shareholder of the Company. No new control persons are created in connection with this proposed acquisition. There will be no changes to the Board of Directors and management of the Company.
The completion of the acquisition shall be subject to certain conditions precedent, which will include but are not limited to the following conditions:
(a) the receipt of all necessary regulatory, corporate and third party approvals, including the approval of Canadian National Stock Exchange ("CNSX"), and compliance with all applicable regulatory requirements and conditions in connection with the acquisition;
(b) the receipt of the approval of the Company's and JC's boards of directors to the final terms of the acquisition;
(c) the receipt of a closing certificate dated as of the closing date of the acquisition from both the Company and JC, certifying the truth and the accuracy of the representations and warranties included in this LOI and in the Definitive Agreement;
(d) the execution of the Definitive Agreement on or before January 21, 2013, or such later date as mutually agreed upon by the Company and JC;
(e) from the execution date of the LOI until the closing date of the Acquisition, there shall be no material adverse change to the assets or share capital of the JC or any of its subsidiaries;
(f) completion of the due diligence by both the Company and JC, acting reasonably, with respect to matters related to the acquisition;
(g) the maintenance of the Company's listing on CNSX (it being acknowledged that trading of the shares of the Company may be halted upon the announcement of this LOI and the acquisition and that trading may not resume until after the completion of the acquisition;
(h) the absence of any material adverse effect on the financial and operational condition or the assets of each of the parties to the Definitive Agreement;
(i) the absence of any prohibition or regulation preventing the completion of the acquisition, and the absence of any approved, announced or applicable governmental order that prohibits or restricts the acquisition or imposes additional any material conditions or restrictions to the acquisition;
(j) the absence of any regulatory or legal proceedings (applicable to the Company or JC) that will terminate or threaten, so as to order, limit or prohibit any transactions contemplated under this LOI, or order, limit or prohibit the right of JC or any of its subsidiaries, on a post-closing of the acquisition basis, to operate in the same manner as it did before the execution of this LOI, and the absence of any actions, litigation or legal proceedings (if successful) by any governmental bodies or person that may have an substantial adverse effect on the Target or any of its subsidiaries; and
(k) other commercially routine terms and conditions applicable to transactions materially similar to the acquisition.
The closing date of the acquisition shall be the day that is the 10th business day following the satisfaction or waiver of the condition precedents in the LOI or in the Definitive Agreement, or such other date as mutually agreed to by the parties, but in any event no later than January 31, 2013, or such later date as mutually agreed upon by the Company and JC.
If the proposed acquisition is consummated as planned, the Company will enter into the online advertising business in addition to its existing online game research and development business.
About CINS Holding Corp.
CINS Holding Corp. is an emerging technology company focusing on online game software research and development and is looking into expanding into other online businesses. The Company carries out its business through its wholly owned subsidiary Dongguan CINS Technology Co., Ltd. in China in order to exploit the immense potential of the online game market in China.
CINS Holding Corp. currently has 21,387,083 common shares issued and outstanding.
On behalf of the Board of Directors
CINS Holding Corp.
Chief Financial Officer and Director
WARNING: This news release may contain forward looking statements based on assumptions and judgments of management regarding future events or results that may prove to be inaccurate as a result of risk factors beyond its control. Actual results may differ materially from the expected results.
SOURCE: CINS Holding Corp.
For further information:
CINS Holding Corp.
Chief Financial Officer and Director
Telephone: (604) 773-1339
E-mail [email protected].