Huacan Optoelectronics purchased 100% equity of Ruijing Optoelectronics for "1 yuan"

Huacan Optoelectronics issued the "About the Acquisition of 100% Equity Interest in Yiwu Ruijing Optoelectronics Technology Co., Ltd." on March 18, stating that the company's acquisition of the entire equity of Yiwu Ruijing Optoelectronics Technology Co., Ltd. ("the acquisition") has been reviewed and approved at the 22nd meeting of the company's second board of directors.

In order to establish a project company in Yiwu, Zhejiang, and start the demonstration, planning and construction of investment projects in Yiwu, Zhejiang as soon as possible, it is planned to acquire Yiwu Ruijing Optoelectronics Technology Co., Ltd. (hereinafter referred to as the "Target Company", the Transaction Target, and "Ruijing Optoelectronics") in cash. March 17, 2016 On the same day, the company signed an "Equity Transfer Agreement" with Zhou Jian and Lou Leifang (hereinafter collectively referred to as "all transaction parties"), and the company acquired all the shares of Yiwu Ruijing Optoelectronics Technology Co., Ltd.

According to the announcement, the business scope of Ruijing Optoelectronics includes the development of optoelectronic technology products and technology transfer; the research and development and sales of electromechanical equipment: sales of energy-saving lamps, LED lamps, monocrystalline silicon wafers, and electronic accessories; the import and export of goods, and the import and export of technology (projects that require approval according to law can only carry out business activities after approval by relevant departments). Ruijing Optoelectronics has had a small operating scale since its establishment. According to the financial statements as of December 31, 2015, Yiwu Ruijing's total assets as of December 31, 2015 were 461,225 yuan, including 460,000 yuan in accounts receivable and monetary funds. 1,225 yuan; total liabilities are 782,383.45 yuan, including accounts payable of 400,000 yuan, taxes payable of 21,043.45 yuan, and other payables of 361,340 yuan; net assets are -321,158.45 yuan. The operating income in 2015 was 446,601.94 yuan, and the net profit was -321,158.45 yuan.

The announcement states that the deadline for the CPA’s audit and assurance is December 31, 2015. After the transfer agreement takes effect, the transferee (Huacan Optoelectronics) will bear the claims and debts as of December 31, 2015. The transferor (Zhou Jian and Lou Leifang) promised to be responsible for the collection of accounts receivable, and promised that if the target company incurred new claims and debts between January 1, 2016 and the date of completion of the industrial and commercial change of the equity transfer, Zhou Jian and Lou Leifang would bear the aforementioned new claims and debts.

Huacan Optoelectronics stated that this acquisition is based on the company's strategic plan and current development trends. The target company is small in scale and the acquisition amount is low. It will be of great help to the rapid development in the future and is in line with the company's future development strategy. The acquisition of the target company is only one of the initial tasks required for the implementation of the Yiwu project. The feasibility analysis and demonstration of the Yiwu project's investment scale, construction content, revenue forecast, etc. need to be submitted to the board of directors by the company's management, which will be decided by the board of directors and the general meeting of shareholders. After that, further changes and capital increases will be made to the Zhejiang subsidiary based on project needs.