According to the news from Zhitong Financial APP, Baiwang co (06657) announced that on November 17, 2024, the company entered into a convertible loan agreement with Global Intelligent Chain and Baiwang Yunhai, under which the company agrees to provide Baiwang Yunhai with a convertible loan amounting to 35 million yuan, for a term of one year, with an annual interest rate of 8%. If there is any unpaid principal at the due date, it can be converted into equity of Baiwang Yunhai.

Baiwang Yunhai is a limited company registered in China on October 18, 2024, wholly owned by Global Intelligent Chain. It is expected to primarily engage in overseas business, including the localization, development, and sale of products related to corporate tax compliance in countries and regions outside of China, as well as implementing, upgrading, and authorizing related technologies in accordance with foreign local laws and regulations. As of the date of this announcement, Baiwang Yunhai has not yet commenced substantive business and has not entered into any agreements or arrangements regarding any potential business cooperation or trade (excluding convertible loans) between the company and Baiwang Yunhai.

The company is a leader and major participant in China’s saas finance and taxation digitalization industry. Although the company hopes to continue focusing on the domestic market and consolidate its leading position in China, it recognizes the immense growth potential of the finance and taxation digitalization industry in emerging overseas markets, given the increasing number of government initiatives globally aimed at promoting business digital transformation in finance and taxation management to drive economic growth and achieve effective management.

The company is confident in the future development of Baiwang Yunhai, which will be operated and managed by a team led by Mr. Yang Zhengdao, an outstanding entrepreneur and business leader with a good track record in both the company and international large enterprises, and is highly recognized in the industry. The company believes that investment through convertible loans will enable it to receive stable interest income long-term or share in the benefits of Baiwang Yunhai's development as a shareholder. In both cases, the convertible loans will lay a solid foundation for future cooperation between the company and Baiwang Yunhai, providing necessary funding support for the initial development of overseas business, thus helping to expand the company's sales reach and establish global recognition of its brand image. The convertible loans will not be funded from the net proceeds raised from the initial public offering completed by the company in July 2024 (on the stock exchange).

In light of the above, the directors (including independent non-executive directors) believe that investing in Baiwang Yunhai through convertible loans will promote a balance in the company's domestic and overseas business strategy under controllable risks. The terms and conditions of the convertible loan agreement have been reached after fair negotiation among the relevant parties and are on normal commercial terms, which are fair and reasonable, and entering into the convertible loan agreement is in the overall interest of the company and the shareholders.