/NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRES/
RICHMOND, BC, May 29, 2012 /CNW/ - Genius World Investments Limited (TSXV: GNW.H) ("GNW" or the "Company") is pleased to provide an update on its proposed transaction with CINS Holding Limited ("CINS").
CNSX Conditional Approval
On April 3, 2012, the Company received conditional approval from Canadian National Stock Exchange ("CNSX"). The proposed transaction is expected to close in early July 2012 with listing of the Company on CNSX. Upon completion of the proposed transaction, the name of the Company will be changed to "CINS Holding Corp." with new trading symbol "CHD".
Management of the Company is of the view that delisting from the NEX Board of TSX Venture Exchange ("TSXV") and listing on CNSX will facilitate completion by the Company of the proposed transaction with CINS in a cost and time effective manner and the reinstatement of trading of the Company's common shares. The Company, being a capital pool company currently listed on NEX, is required to hold a special meeting of shareholders of the Company ("Meeting") to approve the delisting from TSXV and redirect its remaining assets by applying to list on CNSX. As required under the Companies Law of Cayman Islands, the Company will seek shareholders' approval with regard to the name change at the Meeting. The Company has made proper arrangement in accordance with applicable policies and regulations to hold the Meeting on June 26, 2012. For more information about the Meeting, please refer to the information circular filed on SEDAR at www.sedar.com.
Proposed Transaction with CINS
CINS is a private holding company incorporated under the laws of Hong Kong on April 6, 2011. CINS has a wholly owned subsidiary, Dongguan CINS Technology Limited ("DCT"), a company incorporated under the laws of the People's Republic of China ("China") on May 19, 2011. DCT is in the business of providing software research and development services in China. More information on CINS and DCT can be found at www.cins.asia.
On August 25, 2011, the Company entered into an Amalgamation Agreement with CINS. In accordance with the Amalgamation Agreement, the Company has incorporated a wholly owned subsidiary, Stand Capital Limited ("STAND"), under the laws of Hong Kong on April 16, 2012. Pursuant to the Amalgamation Agreement, CINS and STAND will amalgamate to the laws of Hong Kong to form Amalco, and whereby the Company will acquire all of the outstanding shares of CINS, in exchange for the issuance of Resulting Issuer Shares to Elvino Limited ("Elvino"), the sole shareholder of CINS, on a basis of 7,852.194 Resulting Issuer Share for each CINS Share, some of which may be subject to escrow restrictions pursuant to the policies of CNSX. The effect of the Amalgamation will be that all of the security holders of CINS will become security holders of the Resulting Issuer and Amalco will be a wholly-owned subsidiary of the Resulting Issuer ("Transaction").
Under the terms of the Amalgamation Agreement at the effective time of the Amalgamation the following shall occur:
|(a)||STAND and CINS shall amalgamate under Hong Kong law;|
|(b)||the name of Amalco shall be "CINS Holding Limited"|
|(c)||each of the shares held by Elvino in the capital of CINS shall be cancelled and Elvino shall receive shares in the capital of the Resulting Issuer. For every one (1) share held by Elvino in the capital of CINS, Elvino shall receive 7,852.194 common shares in the Resulting Issuer;|
|(d)||as consideration for the issuance of the shares of the Resulting Issuer to Elvino above, Amalco shall issue one (1) share in the capital of Amalco to the Resulting Issuer for every one (1) share in the Resulting Issuer issued to Elvino; and|
|(e)||the one (1) share held by the Resulting Issuer in the capital of STAND shall be cancelled and Amalco shall issue one (1) share in the capital of Amalco to the Resulting Issuer.|
Upon completion of the Amalgamation, which is structured as a three cornered amalgamation, Amalco will be a wholly owned subsidiary of the Resulting Issuer, and the Resulting Issuer through Amalco and its subsidiary DCT will be engaged in the business of providing software research and development services in China.
The Company currently has 3,000,000 common shares issued and outstanding. Upon completion of the Financing involving the issuance of 2,598 to 10,392 CINS Shares (assuming it is fully subscribed for), and upon completion of the Amalgamation pursuant to which all issued and outstanding CINS Shares shall be exchanged for Resulting Issuer Shares on a 1:7,852.194 basis, the Resulting Issuer will have approximately 101,951,940 to 163,121,940 common shares outstanding, with the Elvino Shareholders holding approximately 98,921,940 to 160,121,940 of the outstanding common shares of the Resulting Issuer.
Prior to the completion of the Transaction, Elvino will conduct a non-brokered private placement of 6,375 and up to 25,500 Elvino Shares at a price of $800 per Elvino Share for total gross proceeds of $5,100,000 and up to $20,400,000. All of the proceeds from such private placement will be used by Elvino to subscribe for new CINS Shares. CINS will subsequently issue up to 2,598 CINS Shares to Elvino valued at a price of $1,963.05 per CINS Share for gross proceeds of $5,100,000 and up to $20,400,000. A 10% finders' fee will be paid in cash and warrants to finders in connection with the Financing.
The CINS Shares issued to Elvino following the completion of the Financing will be exchanged for Resulting Issuer Shares on a 1:7,852.194 basis pursuant to the Amalgamation.
Prior to the Completion of the Transaction, it is anticipated that Elvino will distribute its shareholdings in the Resulting Issuer to Elvino's shareholders as part of the Butterfly Transaction. Pursuant to the Butterfly Transaction, Elvino Founders will, for each Elvino Share held, receive 2,685.4289 Resulting Issuer Shares and Elvino Financing Shareholders will, for each Elvino Share held, receive 1,600 and up to 3,200 Resulting Issuer Shares. Following such Butterfly Transaction, it is anticipated that Elvino will be voluntarily wound up pursuant to the laws of the British Virgin Islands.
Shareholdings on the Closing Date
Upon completion of the Transaction, all issued and outstanding CINS Shares shall be exchanged for Resulting Issuer Shares on a 1:7,852.194 basis and the Elvino Shareholders will therefore hold approximately 98,921,940 and up to 160,121,940 or 97.03% and up to 98.2% of the outstanding 101,951,940 and up to 163,121,940 Resulting Issuer Shares, assuming the Financing is fully subscribed for.
Business of the Resulting Issuer
Following the Completion of the Transaction, the business of DCT will become the business of the Resulting Issuer and the Resulting Issuer will continue the business of DCT.
DCT is an online game software development company with strong research and development capability. DCT owns a game engine called "Yufeng" which is a proprietary software package serving as the underlying foundation for various online games that are either under development or still in the initial phases of conception. DCT is in the process of applying for copyright protection of its Yufeng game engine. DCT also holds the rights to a proprietary database and server deployment technology intended to enhance online gaming security and data integrity. DCT is also in the process of developing a series of game titles that are at various stages of development.
DCT has readily available distribution access to the online game market through its strategic partners. The growth in the business of on-line game operators in China and growing demand for additional on-line games has created an opportunity for software developers to license games to operators seeking to diversify on-line game offerings in an effort to capture more market share. Many other small to medium sized online game operators in China rely on licensing game titles directly from developers like DCT due to barriers which prevent operators from developing their own games including the high costs incurred in connection with the R&D of new games and the sourcing and retention of qualified personnel with the requisite technical expertise to develop, service, support and upgrade software. DCT is uniquely positioned in the market. As an online game software developer and not an online game operator, DCT does not compete directly with game operators. Instead, DCT can form strategic partnerships with the operators of multiple game portals that offer online games to customers which are licensed from several different developers. The opportunity to leverage strategic partnerships should increase DCT's exposure to different segments of game players using game portal sites. These partnerships should also allow DCT to increase its licensing and royalty income.
Conditions to Completion of the Proposed Transaction
The Transaction is subject to a number of approvals, which must be obtained, and conditions, which must be met, prior to its implementation, including, but not limited to the following:
|a)||the final acceptance of the Transaction for filing by CNSX;|
|b)||completion of the Financing;|
|c)||the election and appointment of certain directors and officers of the Resulting Issuer;|
|d)||the approval of the Amalgamation by each of the CINS Shareholder in its capacity as the sole shareholder of CINS and the Company in its capacity as the sole shareholder of STAND;|
|e)||all conditions precedent to the Amalgamation as set forth in the Amalgamation Agreement, must be satisfied or waived by the appropriate party;|
|f)||the receipt of all necessary corporate, regulatory and third party approvals including the approval of the TSXV and CNSX, as applicable, and compliance with all applicable regulatory requirements and conditions in connection with the Transaction;|
|g)||conditional approval for the listing of the Resulting Issuer Shares on the CNSX; and|
|h)||the Articles of Amalgamation in the form prescribed under Hong Kong law must be filed with the Registrar.|
Proposed directors and management for the resulting issuer
It is proposed that the board of directors of the resulting issuer following the closing of the Transaction will be comprised of the following individuals:
|- Chung Yan Lee, Hong Kong||Chairman of the Board|
|- Sheng (Sam) Wang, British Columbia||Executive Director|
|- George Dorin, British Columbia||Independent Director|
|- Stephen So, Hong Kong||Independent Director|
|- Shu Wai (Jimmy) Chan, Hong Kong||Independent Director|
It is proposed that the management of the resulting issuer shall be comprised of the following individuals:
|- Chung Yan Lee||Chief Executive Officer|
|- Sheng (Sam) Wang||Chief Financial Officer|
|- Zhixue (James) Wang||Director of Marketing & Sales|
|- Wei Yu||Director of Gaming Experience|
The following is a brief description of the background of each person of the Board and management of the Resulting Issuer.
Chung Yan Lee, proposed Chairman & Chief Executive Officer
Mr. Lee is a successful Internet entrepreneur. Mr. Lee has successfully established and operated six IT companies with over 200 employees. His companies included directory websites, website production and portal websites in Hong Kong, Macau and Taiwan. He became the youngest CEO in the online game industry in China before he turned 20. He has considerable operational experience and technical knowledge of online gaming, social network portal websites and search engines.
In 2004, Mr. Lee built one of the largest portal websites in Hong Kong (www.yoho.hk). In 2006, Mr. Lee founded Guangzhou CINS Ltd. in the PRC and became one of the largest partners of Hong Kong Yahoo' search engine business as well as an exclusive regional operator of Kijiji.com in Guangzhou, PRC. In 2009, Mr. Lee established a webgame company in Taiwan (uyoho.com). Starting from September 2009, Mr. Lee has been working for Guangdong CINS Limited as Chief Executive Officer. One internet game has generated significant cash flows with three more games to go online in the next twelve months.
Sheng (Sam) Wang, proposed Director & Chief Financial Officer
Mr. Wang is a Certified General Accountant with a broad expertise in all phases of corporate finance, business and strategic planning, and corporate development. He also has extensive financial management and regulatory experiences with public companies listed on Toronto Stock Exchange and the TSXV. Mr. Wang is the founder and president of Canadian Regal International Finance Inc., a company specialized in assisting private companies in the public listing process. Mr. Wang has been CEO and a director of Genius World Investments Limited (TSXV: GNW.H) since October 2007. Mr. Wang is and has been a director of MillenMin Ventures Inc. (TSXV: MVM.P) since September 2009. Mr. Wang is and has been a director of EPI Environmental Technologies Inc. (TSXV: EPI) since August 2011. Mr. Wang was a director and audit committee chair of Xianburg Data Systems Canada Corporation (TSXV: XDS.H) between November 25, 2010 to April 22, 2011. Between December 2006 and September 2007, Mr. Wang was the Senior Accounting Manager and Business Development Manager of Hanwei Energy Services Corp., a company listed on the Toronto Stock Exchange. Between January 2006 and December 2006, Mr. Wang was the Accounting Manager of Y&O Ventures Corp. ("Y&O"), the predecessor of Hanwei Energy Services Corp. Mr. Wang helped Y&O complete its qualifying transaction with Daqing Harvest High Pressure FRP Pipe Co. Ltd. in China and the subsequent financing of $77 million for the resulting issuer, Hanwei Energy Services Corp. in 2007. Mr. Wang obtained a BA from Shenzhen University in China in 1992 and a MBA from York University, Ontario in 2000.
George Dorin, proposed Director
Mr. Dorin has 30 years of broad-based financial experience, including 15 years as a Vice-President, Finance or Chief Financial Officer for several private and public companies. As a Chief Financial Officer and contract management consultant, Mr. Dorin has been involved in a number of corporate finance transactions and has assisted companies with strategic and business planning, financial and regulatory reporting, investor relations and corporate development. Prior to his work in industry, he worked in the financial services sector as a Senior Accountant with Ernst & Whinney (now part of KPMG), as a Manager in the Corporate Finance Group and Management Consulting Group at Price Waterhouse, as an Assistant Manager at the Royal Bank of Canada, and as an Investment Advisor with Pemberton Securities (now part of RBC Dominion Securities). In 2007 and 2008 he acted as Senior Vice President of the Corporate Finance Group of Wolrige Mahon, LLP a mid-sized British Columbia-based accounting firm.
Most recently, Mr. Dorin has been providing contract corporate finance and financial management advisory services to various industrial companies and other corporate finance advisory firms through his own company, CANUS Capital Corporation. Mr. Dorin has experience serving as a Director or Chief Financial Officer for several China-related companies listed on the TSXV, including China Keli Electric Company Ltd. (director since May 2010), Yalian Steel Corp. (CFO from July 2009 to January 2010), Xianburg Data Systems Canada Corporation (CFO from Nov 2010 to April, 2011), GLG Life Tech Corp. (CFO in 2007), Cantronic Systems Inc. (director); Chai Na Ta (CFO), HFX Holding Ltd (director since December, 2010).
Mr. Dorin earned undergraduate degrees in both Science and Accounting from the University of British Columbia in 1974 and 1977, a Masters Degree in Finance from the London School of Economics in England in 1987, and the Diploma FCSI (Fellow of the Canadian Securities Institute). A Chartered Accountant since 1980, he was also granted a CF (Corporate Finance) specialist designation from the Canadian Institute of Chartered Accountants in 2008.
Stephen So, proposed Director
Mr. So is a director of the Corporation. Mr. So is a CA, FCPA, CMA and FAIA. Mr. So obtained a B.Comm in Accounting from the University of British Columbia in 1979. Mr. So has been Finance Director of Jetion Holdings Limited, a solar cells and modules manufacturer listed on London Stock Exchange - Alternate Investment Market (JHL) from June 2007 to June 2009. Mr. So has been Director of T.M. Ho, So & Leung Certified Public Accountants Ltd., an accounting firm, since August 1997. Mr. So has acted as Independent Non-executive Directors of Skyworth Digital Holdings Limited (Hong Kong Stock Exchange: 751) since March 2000, Pine Technology Holdings Limited (Hong Kong Stock Exchange: 1079) since September 2002, Hang Ten Group Holdings Limited (Hong Kong Stock Exchange: 448) since October 2002, and Milan Station Holdings Limited (Hong Kong Stock Exchange: 1150) since May 2011.
Shu Wai (Jimmy) Chan, proposed Director
Mr. Chan founded Vizz Technology Ltd. (Vizz) in 2002. Vizz is in the business of domain name registration, research and development of management information systems, and internet related technology and services. Under Mr. Chan's management, Vizz acquired HostMe HK Ltd., IZ Design, and Hosting and Rassom Network Company and becomes one of the largest hosting companies in Hong Kong with over 1,000 small and medium size enterprises clients., Vizz is become the one of the largest domain registration company in Hong Kong. Working with Yahoo and PayPal in Hong Kong, Vizz is also one of the largest online advertising and business solutions provider in Hong Kong. In 2009, Mr. Chan established Vizz Group (Holdings) Ltd. to manage 5 subsidiaries with over 100 employees. Vizz Group provides IT solutions to over 3,000 clients, including government agencies, non-governmental organizations, universities, and public companies.
Mr. Chan graduated from Chinese University of Hong Kong in 2000. In 2007, Mr. Chan graduated from the Master Programme of University of Hong Kong with majors in eCommerce & Internet Computing.
Zhixue (James) Wang, Director of Marketing and Sales
Mr. Wang has more than 20 years of experience at various senior positions with state-owned enterprises in China. Before joining CINS in April 2012, he served as General Manager, Executive Vice President and Chairman at Rongzhong Capital Investment Group Co., Ltd, AEON Credit Service (China) Limited (a member of Japan AEON Group, which is the top 500 companies worldwide), Shenzhen Xinchi Business Advisory Company (a member of PPF which is the biggest private financial consortium in Middle and East Europe), Huaren Group and Yanhuang Group. He was responsible for and involved in several domestic and overseas mergers and acquisitions. Mr. Wang received his Senior Economist designation in 1988.
Wei (Evan) Yu, Director of Gaming Experience
Between 2004 to 2006, Mr. Yu worked for Shanghai Aomei, an internet game company, as Director of Media. He established marketing relationships with over 150 media companies and obtained free media support valued over hundreds of thousands of RMB. He oversaw the advertising with annual budget of RMB3 million and reached the milestone of 2 million registered users.
From 2006 to 2007, Mr. Yu worked for 9you.com Ltd., an internet gaming company to establish an interactive entertainment platform and was responsible for design and maintain the gaming channel. Before he left the company, the daily page view of the game channel had reached 3 million. From 2007 to 2009, Mr. Yu worked for an internet matchmaking company, responsible for operational strategy and marketing.
In 2009, Mr. Yu joined Shenzhen Rentianxia Network Technology Limited, an online gaming company, where he was responsible for operation and game development management. He designed and established the game site and the company's official website.
Mr. Yu joined CINS in August 2010 as Director of Gaming Experience, responsible for the operations and management of two Stone Age series games and webgames.
About the Company
The Company is a capital pool company listed on NEX of the TSXV. The Company has not commenced commercial operations and currently has no assets other than cash.
Trading in the Company's common shares was halted on July 4, 2011 in accordance with the policies of the TSXV and is expected to remain halted until after the completion of the proposed transaction with CINS.
Forward Looking Information
The press release contains forward-looking statements with respect to the proposed transaction, the financing, and matters concerning the business, operations, strategy and financial performance of the Company and CINS. These statements generally can be identified by use of forward looking word such as "may", "will", "expect", "estimate", "anticipate", "intends", "believe", or "continue" or the negative thereof or similar variations.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements, or other future events, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, among others, risks associated with the completion of the proposed transaction and matters relating thereto, risks associated with the marketing and sale of securities, the need for additional financing, reliance on key personnel, the potential for conflicts of interest among certain officers or directors with certain other projects, as well the volatility of the Company's common share price and volume.
In addition, forward-looking statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to: the ability of the Company to obtain necessary financing to complete the proposed transaction or to satisfy the requirements of CNSX with respect to the proposed transaction. The completion of the proposed transaction and/or the proposed financing and the future business, operations and performance of the resulting entity discussed herein could differ materially from those expressed or implied by such statements.
Additional important factors that could cause actual results to differ materially from expectations include, among other things, general economic and market factors, competition, as well as risks related to: CINS's business such as failure of the business strategy, stable supply prices, demand and market prices for its products, government licensing, potential exposure to tax under Canadian income tax, recent PRC regulations relating to cross-border mergers and acquisitions, currency exchange rates and conflicts of interest; CINS's operations, such as additional financing requirements and access to capital, reliance on key and qualified personnel, competition, and intellectual property; and doing business in the PRC such as tax, repatriation of profit and currency conversion, acquisition, foreign investment, permits and licenses, employment contracts, government intervention, shareholders' rights and enforcement of judgments and a developing legal system.
The Company cautions that the foregoing list of material factors is not exhaustive. When considering the Company's forward-looking statements and information to make decisions, investors and others should carefully review the foregoing factors and other uncertainties and potential events.
THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS RELEASE REPRESENTS EXPECTATIONS OF THE COMPANY AS OF THE DATE HEREOF AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THE COMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE LAWS.
Completion of the proposed transaction is subject to a number of conditions, including but not limited to, final CNSX acceptance. There can be no assurance that the transaction will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the listing statement to be prepared in connection with the transaction, any information released or received with respect to the transaction may not be accurate or complete and should not be relied upon. Trading in the securities of a capital pool company should be considered highly speculative.
TSXV and CNSX have in no way passed upon the merits of the proposed transaction and have neither approved nor disapproved the contents of this press release.
The TSX Venture Exchange and the Canadian National Stock Exchange have not reviewed and do not accept responsibility for the adequacy or accuracy of this release.
For further information:
Genius World Investments Limited
Tel.: (604) 773-1339