HONG KONG SAR – Media OutReach Newswire – January 23, 2024 –
International Society of Engineering (“CIG” or the “Company”, together with its subsidiaries, the “Group”; stock code: 0033.HK) is pleased to announce that, effective January 22, 2024 (after trading hours), Gold Collection Enterprises Limited (the “Buyer“, a wholly owned subsidiary of the Company), the Company and Dr. Ye Guanhua (the “Supplier“) entered into the sale and purchase agreement, under which the buyer conditionally agreed to acquire and the seller conditionally agreed to sell the sold shares, representing the entire issued share capital of the target group.
Target group
The target group is a leading services and applications organization specializing in deep neural networks, artificial intelligence, distributed computing and quantitative trading algorithms. As of the date of this announcement, the target group is entirely owned by the seller. The Target Group is a licensed manager in the BVI, which allows it to act as a manager or advisor to investment funds in the BVI. It offers a wide range of services to investment funds, including providing technical support through cutting-edge technology, distributed neural network algorithms and robust risk control modules.
Furthermore, the Target Group and its management team have a well-established track record in providing financial services to its clients as they recorded an unaudited profit of over HK$31.7 million for the period of September 20, 2022 (date of incorporation) to December 31, 2023. The total unaudited assets of the Target Group as of December 31, 2023 were approximately HK$49.8 million.
Consideration
Subject to possible adjustment of the Consideration as set out in the “Profit Guarantee”, the Consideration of HK$620,520,000 will be settled by (i) a cash amount of HK$30,000,000 upon completion ; and (ii) the Company will allot and issue 105,000,000 Consideration Shares at an issue price of HK$5.624 per Consideration Share to the Seller (or its nominee(s)) once the completion achieved. The Consideration Shares will be allocated and issued in accordance with the General Mandate and will rank pari passu with the outstanding Shares. The consideration shares represent approximately 19.54% of the issued share capital of the Company as of the date of this announcement and approximately 16.35% of the issued share capital of the Company as enlarged by the allotment and issuance of the shares consideration (assuming that there is no further change in the issued share capital of the Company). Once achieved, the target company will become a wholly owned subsidiary of the company and, therefore, the financial results of the target group will be consolidated in the financial statements of the company.
Profit Guarantee
The Seller warrants to the Buyer that the aggregate actual profit before tax generated by the target group (the “Actual Profit”) for the three years ending December 31, 2026 will not be less than HK$270,000,000 in total (the “Profit Guarantee”). In the event that the actual profit falls below the guaranteed net profit in accordance with the profit guarantee, the number of PG related consideration shares which will be released by the escrow agent to the seller will be reduced based on the agreed formula .
Benefits
The Group has made progress in seeking a breakthrough in the use of algorithmic trading and artificial intelligence technologies for its asset management businesses and other related financial services. By leveraging the Company’s algorithmic trading and artificial intelligence technology, as well as the artificial intelligence, distributed computing and quantitative trading algorithms owned by the Target Group, the Group considers that the acquisition can complement the Company’s securities brokerage and asset management businesses to provide a full range of asset management and other related financial services to its clients.
Furthermore, the Group believes that the Target Group could further improve the revenue stream and profitability of the Company. In view of the above, the Directors consider that the terms of the Sale and Purchase Agreement, including the Consideration, are fair and reasonable and that entering into the Sale and Purchase Agreement is in the interests of the Company and Shareholders. in its entirety.
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The issuer is solely responsible for the content of this announcement.
