Borqs’ acquisition target, KADI, received clearance from customer for commercial production of its electric vehicle contro...
May 08 2018 - 9:00AM
Borqs Technologies, Inc. (the “Company”) today announced that its
acquisition target, Shanghai KADI Machinery Technology Co., Ltd.
(“KADI”) has received clearance from an end-user for production and
delivery of its electrical vehicle (“EV”) control modules.
The end-user is Dong Feng Motors Group’s Super Dragon Electric Bus
Program (“Dong Feng Bus”), which tested samples from KADI over a
6-month period, and on April 28, 2018 cleared KADI to deliver the
products beginning in May 2018. Such products represent about
10% of a RMB 320 million supply contract (equivalent to US$50
million at the current exchange rate) for EV control modules to be
delivered over a two-year period, awarded to KADI by the automotive
contractor – Shenzhen Espirit Technology Co., Ltd.
KADI’s control module designed for Dong Feng Bus
is a 3.0KW DCDC converter that converts from a high voltage of 540V
to a low 24V for use in steering control, air conditioning and
other bus operations.
As previously disclosed in the Company’s filings
with the SEC, the Company has entered into a letter of intent to
initially acquire 60% of KADI. The parties are currently
negotiating a definitive agreement and expect to finalize the terms
of the acquisition within the next two months. Borqs believes
its software engineering experience can enhance KADI’s R&D
capabilities while Borqs’ supply chain management team will ensure
efficient delivery of the hardware module products. The
proposed consideration to be paid by Borqs includes $11.7 million
in cash (of which $5.0 million is to be paid at closing, with the
balance to be paid over 1.5 years) and up to $3.3 million in Borqs
shares to be paid over three years (of which $0.2 million is to be
paid at closing, with the balance subject to the satisfaction of
certain earn-outs). Borqs is contemplating a public offering of
shares in the coming weeks to support the cash needs for this
potential acquisition, which offering will need to close before the
consummation of the acquisition. No assurance can be made that the
parties will reach a definitive agreement and proceed to closing,
or that the Company will be able to raise sufficient funds or
fulfill all necessary closing conditions to complete the proposed
acquisition.
Hu Lin, the Chairman and General Manager of
KADI: “We are excited that the first customer has confirmed our
products for delivery and that more will be following. We
look forward to our potential cooperation with Borqs and the
synergies that we expect to generate between our two
businesses.”
The Company’s ordinary shares trade on NasdaqCM with the symbol
BRQS; and the Company’s warrants trade on OTC with the symbol
BRQSW.
About Borqs Technologies, Inc.
(Nasdaq:BRQS)Borqs Technologies is a leading provider of software
and products for the IoT, providing customizable, differentiated
and scalable Android-based smart connected devices and cloud
service solutions. Borqs has achieved leadership and customer
recognition as an innovative end-to-end IoT solutions provider
leveraging its strategic chipset partner relationships as well as
its broad software and IP portfolio. The Company designs, develops
and provides turnkey solutions across device form factors such as
smartphones, tablets, smartwatches, trackers, automotive IVI, and
vertical application devices (for restaurants, payments
etc.). For more information, please visit the Company’s
website (www.borqs.com).
Forward-Looking StatementsThis
press release includes “forward-looking statements” that involve
risks and uncertainties that could cause actual results to differ
materially from what is expected. Words such as “expects”,
“believes”, “anticipates”, “intends”, “estimates”, “predicts”,
“seeks”, “may”, “might”, “plan”, “possible”, “should” and
variations and similar words and expressions are intended to
identify such forward-looking statements, but the absence of these
words does not mean that a statement is not forward-looking. Such
forward-looking statements relate to future events or future
results, based on currently available information and reflect our
management’s current beliefs. Many factors could cause actual
events or results to differ materially from the events and results
discussed in the forward-looking statements. Some factors
that could cause actual results to differ include: (i) the
occurrence of any event, change or other circumstances that could
delay Company’s negotiation of a definitive agreement with KADI or
the consummation of the acquisition of KADI; (ii) the inability to
complete the KADI acquisition due to the failure to obtain
sufficient funding or other conditions to closing; (iv) the risk
that the proposed acquisition disrupts current plans and operations
of KADI as a result of the announcement and consummation of the
acquisition; (v) the Company’s ability to realize the anticipated
benefits of the acquisition, which may be affected by, among other
things, competition and the ability of the Company to grow and
manage growth profitably following the acquisition; (vi) costs
related to the KADI acquisition; (vii) changes in applicable laws
or regulations; and (viii) the possibility that the Company or KADI
may be adversely affected by other economic, business, and/or
competitive factors. The reader is advised to refer to the Risk
Factors sections of the Company’s filings with the Securities and
Exchange Commission for additional information identifying
important factors that could cause actual results to differ
materially from those anticipated in the forward-looking
statements. Except as expressly required by applicable securities
law, the Company disclaims any obligation to update any
forward-looking statements, whether as a result of new information,
future events or otherwise.
Investor Contact:Sandra
DouInvestor Relations Sr. ManagerBorqs Technologies,
Inc.sandra.dou@borqs.net
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