Noiz Group (08163) announced that on June 13, 2022, the buyer, Benefit Palace Limited (a wholly-owned subsidiary of the Company), has entered into a sale and purchase agreement with the seller regarding the acquisition. Pursuant to the agreement, the Company conditionally agreed to the acquisition, while each seller conditionally agreed to sell the existing shares (i.e., all the issued shares of the target company NOIZChain Limited) for HKD 14 million. Upon completion of the transaction, the Company will issue and allot a total of 66.6667 million consideration shares to the sellers at a consideration of approximately HKD 0.21 per share at the issue price, as payment for the acquisition.
Benefit Palace Limited (a wholly-owned subsidiary of the Company) has entered into a sale and purchase agreement with the seller regarding the acquisition. Pursuant to the agreement, the Company conditionally agreed to the acquisition, while each seller conditionally agreed to sell the existing shares (i.e., all the issued shares of the target company NOIZChain Limited) for HKD 14 million. Upon completion of the transaction, the Company will issue and allot a total of 66.6667 million consideration shares to the sellers at a consideration of approximately HKD 0.21 per share at the issue price, as payment for the acquisition.
Upon completion of the transaction pursuant to the sale and purchase agreement, each seller shall irrevocably and unconditionally grant the buyer a put option, whereby if the target company shows a net negative operating cash flow for the year ending December 31, 2023, as disclosed in its audited financial statements prepared in accordance with Hong Kong Financial Reporting Standards, the buyer has the right to require the sellers to repurchase all (and not some) of the existing shares held by the buyer in the target company.
According to the audited comprehensive financial statements for 2023, the target company obtained a minimum positive operating cash flow as of December 31, 2023, and therefore did not trigger the option event. Despite achieving the minimum positive cash flow, the business environment of the target company has become increasingly severe, which is contrary to the initial expectations of the board of directors. Therefore, the board of directors has been in discussions with the seller, and both the seller and the buyer have agreed and entered into a put option agreement on July 22, 2024.
The put option agreement provides the company with a relatively long period of time to monitor the performance of the target company, and gives the buyer the right to require the seller to repurchase the sale shares held by the buyer, but has no mandatory requirement. Therefore, the board of directors believes that the put option agreement is in the overall interests of the company and its shareholders.