Benzinga | Jan 19, 2022 08:32AM EST

Taoping To Acquire Zhenjiang Taoping IoT Technology Limited; To Acquire 95.56% Equity Interest, A Price Of ~$391,011

Taoping Inc. (NASDAQ:TAOP, the &quot, Company&quot, or &quot, TAOP&quot, ))))), a provider of blockchain technology and smart cloud services, today announced that it has entered into a share purchase agreement to acquire 95.56% equity interest in Zhenjiang Taoping IoT Technology Limited ("Zhenjiang Taoping"), aiming to accelerate the Company's smart charging pile and digital media businesses in East China.



After the closing of the acquisition, Zhenjiang Taoping is expected to become an important part of Taoping Digital Culture East China Operation Center. While continuing to grow the current business, Zhenjiang Taoping plans to take advantage of its regional influence and existing channels to expand the business of large-screen splicing displays, smart charging piles, etc. At present, Zhenjiang Taoping already has completed a smart charging pile project in certain communities and is actively exploring other smart community-related businesses in the region.

"With a high level of economic development and urbanization, the target market of our East China Operation Center has great potential in the construction of new smart communities," said Mr. Jianghuai Lin, Chairman and CEO of TAOP. "The acquisition of Zhenjiang Taoping will help the Company to quickly deploy smart charging pile and digital media businesses in East China market. We believe this transaction would bring value for our shareholders and optimize TAOP's business structure."

About the Transaction: Pursuant to the share purchase agreement, as consideration TAOP has agreed to issue to the shareholders of Zhenjiang Taoping a total of 201,552 restricted ordinary shares of TAOP, calculated as $391,011 being divided by the average closing price of TAOP ordinary shares over the 20 trading days prior to the execution of the share purchase agreement, which was $1.94 per share. These shares are offered pursuant to an exemption from the registration requirements of Section 5 of the Securities Act of 1933, as amended contained in Section 4(a)(2) thereof and/or Regulation S promulgated thereunder.

According to the share purchase agreement, the shares are expected to be issued in three phases. The first phase will issue 67,184 shares within 20 days after closing of the transaction; the second phase will issue 67,184 shares before May 31, 2023; the third phase will issue 67,184 shares before May 31, 2024. Issuance of shares during the second and third phases will be conditioned upon the satisfaction of certain performance targets of Zhenjiang Taoping as set forth in the share purchase agreement. Specifically, the second phase issuance requires from the closing date to December 31, 2022, Zhenjiang Taoping have at least 2.5 million RMB of audited revenue and 0.5 million RMB of audited net income that may be consolidated into TAOP's financial statements; and to be eligible for the third phase issuance, Zhenjiang Taoping shall have at least 2.6 million RMB of revenue and 0.55 million RMB of net income that may be consolidated into TAOP's financial statements during the fiscal year 2023. Mr. Huan Li, the Chief Marketing Officer of TAOP, is one of the shareholders of Zhenjiang Taoping and has agreed to transfer all of his 46% equity interest in Zhenjiang Taoping to TAOP.

The closing of the transaction is subject to a number of conditions, including, without limitation, completion of all respective internal approval procedures of the parties, no material adverse impact on the assets, operation and management team of Zhenjiang Taoping prior to closing, and the satisfaction or waiver of other customary closing conditions. The parties intend to close the transaction no later than January 31, 2022.