NEW YORK, Feb. 1, 2017 /PRNewswire/ -- Wecast Network, Inc.
(NASDAQ: WCST) ("Wecast" or the "Company" or "WCST"), announced
today that with full Board due diligence, review of the third-party
fairness opinion and ultimately, unanimous approval, the Company
has completed the previously announced related-party transaction
for the acquisition of Sun Video Group HK Limited ("SVG"), which
has a 51% ownership stake in M.Y. Products, LLC ("MYP"), a global,
smart supply chain management operator. Additionally, WCST is
issuing as of today, total Company-wide 2017 guidance of
$280 million top-line revenue.
In exchange for all of the outstanding capital shares in
SVG and a guarantee that SVG will achieve certain financial goals
within 12 months of the closing, the seller, BT Capital Global
Limited (a Bruno Wu/Sun Seven Stars
company) will receive $800k in cash
(already paid in advance of closing) and a promissory note of
$50 million, with the principal and
interest convertible into shares of WCST common stock at a
conversion rate of $1.50 per share
(33,333,333 shares).
As previously mentioned and as part of the original deal,
SVG guaranteed it would achieve certain revenue and
profitability milestones within 12 months of closing the
transaction. If SVG fails to meet the guarantee, then SVG
would forfeit back to the Company the WCST promissory note / common
stock it received, on a pro-rata basis. As part of the
negotiation process, that revenue milestone has been increased to
$250 million (up from $200 million) and the gross profit milestone has
been established at $15 million.
Additionally, if SVG achieves a net income threshold of more
than $50,000,000 in cumulative
audited net income within three (3) years of closing, WCST shall
pay back to the seller, 50% of the amount of any cumulative audited
net income above the net income threshold. Profit share
payments shall be made on an annual basis, in cash or stock (at the
Board's discretion), following each year's annual audit.
CEO Bing Yang commenting on the completed deal stated, "The SVG
team has developed a business centered on connecting Asian
manufacturers with U.S. retail chains in a more efficient, direct
and value-enhancing manner. The SVG deal provides Wecast
Network with a tremendous opportunity to innovate and disrupt
certain global supply chains. This deal, along with other
M&A currently being vetted, will provide the foundation for
Wecast Network's goal towards becoming a next generation global
brand and content licensing & IP sales company, driven by AI
and Big Data. Based on all of this, today Wecast Network is
confident in issuing Company-wide 2017 guidance of $280 million in top-line revenue."
Sun Video Group will be rebranded as Wecast Services Group
("WSG"), and the names of Sun Video Group and its subsidiaries will
be changed to reflect the rebranding.
Functioning as a global smart supply chain management company,
the newly-named Wecast Services Group will be dedicated to
supporting the Company's brand licensing and video commerce
business with B2B services, including but not limited to: Supply
Chain Management, Manufacturer Sourcing, Supply Chain Financing, VR
(virtual reality)-Enabled Commerce Technology and AI-driven Big
Data Technology Management.
With the aforementioned service offerings under one roof, the
Wecast Services Group provides Chinese manufacturers the
opportunity to vastly improve profitability by eliminating
middlemen costs from the distribution chain and allowing
manufacturers to capture more robust margins as well as
reapportioning cost savings to marketing and branding, thereby
improving revenue volume.
As indicated in a December 2016
press release, Bruno Wu's SSS has
established a 3 Billion RMB
($437 million USD) Holding Company to
support and invest in WCST's future growth and expansion. The
newly formed Wecast Services Group will be a beneficiary of this
support initiative.
More details regarding this transaction can be found in the
Company's SEC filing under Form 8K filed today.
About Wecast Network Inc.
(http://corporate.wecastnetworkinc.com)
Wecast
Network Inc (NASDAQ: WCST), is a next generation global brand
licensing, IP sales and video commerce company driven by AI and Big
Data. With a firm focus on 4 strategy pillars which include:
Brand, Content, Commerce and Licensing, the Company is leveraging
and optimizing its legacy operations as a premium content Video On
Demand service provider in China
to evolve into a global, vertical, ubiquitous and transactional
B2B2C, mobile-driven, consumer and supply chain management
platform. By aiming to establish the world's premier
multimedia, social networking and smart e-commerce-enabled network
with the largest global effective connected user base, Wecast,
through this expanded, cloud-based, ecosystem of connected screens
combined with strong partnerships with leading global providers,
will be capable of delivering a vast array of WCST/YOD–branded
products and services to enterprise customers and end-use
consumers - anytime and anywhere, across multiple
platforms and devices.
Wecast has content distribution agreements in place with many
of Hollywood's top studios including Disney Media
Distribution, Paramount Pictures, NBC Universal and Twentieth
Century Fox Television Distribution, Miramax, as well as a broad
selection of the best content from Chinese filmmakers. In
addition, the Company has governmental partnerships and licenses as
well as numerous JV partnerships and strategic cooperation
agreements with an array of distribution and content partners in
the global new media space. Wecast is headquartered in both
New York, NY and Beijing, China.
Safe Harbor Statement
This press release contains
certain statements that may include "forward looking statements."
All statements other than statements of historical fact included
herein are "forward-looking statements." These forward looking
statements are often identified by the use of forward-looking
terminology such as "believes," "expects" or similar expressions,
involve known and unknown risks and uncertainties. Although the
Company believes that the expectations reflected in such
forward-looking statements are reasonable, they do involve
assumptions, risks and uncertainties, and these expectations may
prove to be incorrect. You should not place undue reliance on these
forward-looking statements, which speak only as of the date of this
press release. The Company's actual results could differ materially
from those anticipated in these forward-looking statements as a
result of a variety of factors, including those discussed in the
Company's periodic reports that are filed with the Securities and
Exchange Commission and available on its website
(http://www.sec.gov). All forward-looking statements attributable
to the Company or persons acting on its behalf are expressly
qualified in their entirety by these factors. Other than as
required under the securities laws, the Company does not assume a
duty to update these forward-looking statements.
CONTACT:
Jason Finkelstein
Director Strategy & IR
Wecast Network, Inc.
212-206-1216
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SOURCE Wecast Network, Inc.