CHANGSHA, China, Aug. 13, 2019 /PRNewswire/ — Urban Tea, Inc. (NASDAQ: MYT) (the "Company" or the "Buyer"), a premier retailer of specialty teas and baked goods based in Hunan, China, is pleased to announce that the Company, along with its wholly owned subsidiary Ming Yun Tang (Shanghai) Tea Co., Ltd. ("WOFE") has entered into a non-binding Letter of Intent ("LOI") with Hunan 39 PU Tea Co., Ltd. ("39 PU Tea") and equity holders of 39 PU Tea to acquire 39 PU Tea. 39 PU Tea is a high-end tea enterprise integrating tea distribution, product research and development, and tea cultural heritage projects based in Hunan, China.
Pursuant to the terms of the LOI, in consideration of 39 PU Tea equity holders’ agreement to enter into VIE Agreements with WOFE, the Company will pay 39 PU Tea equity holders consideration consisting of 70% paid in ordinary shares, no par value, of the Company, and 30% paid in cash. The payment of the acquisition consideration will be subject to 39 Pu’s achievement of certain operational milestones. As the transaction proceeds, the Company will publicly disclose required information either through press releases or SEC filings, as appropriate.
Mr. Long Yi, the Chief Executive Officer of the Company stated: "Acquiring 39 PU Tea is an important step for us, reflecting our strategy to expand our operations and heighten the awareness of our brand in the fruit tea market. 39 PU Tea complements our current business with its access to high quality dark teas as well as its extensive operations designed to spread tea culture through their tea academy. We are optimistic that completing this acquisition will help broaden our customer base and provide new options and opportunities for tea drinkers across China."
Mr. De’an Hu, the Managing Director of 39 PU Tea commented: "Urban Tea, Inc. shares our commitment to tea culture and we are proud to join them to become an industry leader in the specialty tea retail market. Our premium dark tea has numerous desirable characteristics including health benefits such as reducing blood pressure, can be easily stored, and appreciates in value through the aging process. We believe these characteristics will allow Urban Tea, Inc. to benefit from our dark tea as a long-term supply source for their innovative tea drinks."
Completion of the transaction is subject to due diligence investigations by the relevant parties, the negotiation and execution of a definitive share exchange agreement, satisfaction of the conditions negotiated therein including the approval of the Company’s Board of Directors, approval by NASDAQ of issuance of the share component of the acquisition consideration, and the satisfaction of other customary closing conditions. There can be no assurance that a definitive agreement will be entered into or that the proposed transaction will be consummated. Further, readers are cautioned that those portions of the LOI that describe the proposed transaction, including the consideration to be issued therein, are non-binding.
About Urban Tea, Inc.
Urban Tea, Inc. is an emerging specialty tea product distributer and retailer headquartered in Changsha City, Hunan Province, China. Through its wholly owned subsidiary, Shanghai Ming Yun Tang Tea Limited ("Shanghai MYT") which controls Hunan Ming Yun Tang Brand Management Co., Ltd. ("Hunan MYT"), the Company currently market a wide range of trendy tea drinks, light meals, and pastries targeting China’s new urban generation in Hunan province. Our products are focused on not only their taste but also their aesthetic presentation and health benefits. Our products are currently being offered via our own stores. We expect to start selling our products in our managed and joint venture stores in October 2019. For more information, please visit: ir.h-n-myt.com.
About Hunan 39 PU Tea Co., Ltd.
Headquartered in Changsha, Hunan, 39 PU Tea is a high-end tea enterprise integrating tea distribution, product research and development, and tea cultural heritage projects. The company aims to create a comprehensive tea brand, selling premium tea (primarily Anhua dark tea) and facilitating the dissemination of tea culture. Currently, the company operates retail tea stores in Guangdong, Liaoning, Inner Mongolia, and Hunan. For more information, please visit: www.39putea.com.
Certain statements made herein are "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "anticipate", "believe", "expect", "estimate", "plan", "outlook", and "project" and other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. Such forward-looking statements include timing of the proposed transaction; the business plans, objectives, expectations and intentions of the parties once the transaction is complete, and the Company’s estimated and future results of operations, business strategies, competitive position, industry environment and potential growth opportunities. These forward-looking statements reflect the current analysis of existing information and are subject to various risks and uncertainties. As a result, caution must be exercised in relying on forward-looking statements. Due to known and unknown risks, our actual results may differ materially from our expectations or projections. 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.
The following factors, among others, could cause actual results to differ materially from those described in these forward-looking statements: the occurrence of any event, change or other circumstances that could give rise to the terms of the LOI not hereafter being memorialized in a definitive agreement; the outcome of any legal proceedings that have been, or will be, instituted against the Company or other parties to the LOI following announcement of the LOI and transactions contemplated therein; the ability of the Company to meet NASDAQ listing standards following the transaction and in connection with the consummation thereof; the inability to complete the transactions contemplated by the LOI due to other closing conditions to; risks that the proposed transaction disrupts current plans and operations and the potential difficulties in employee retention as a result of the announcement of the LOI and consummation of the transaction described therein; costs related to the proposed acquisition; changes in applicable laws or regulations; the ability of the combined company to meet its financial and strategic goals, due to, among other things, competition, the ability of the combined company to grow and manage growth profitability, maintain relationships with customers and retain its key employees; the possibility that the combined company may be adversely affected by other economic, business, and/or competitive factors; and other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in other reports and other public filings with the Securities and Exchange Commission (the "SEC") by the Company.
Additional information concerning these and other factors that may impact our expectations and projections can be found in our periodic filings with the SEC, including our Annual Report on Form 20-F for the fiscal year ended June 30, 2018 as well as our Current Report on Form 6-K dated April22, 2019. The Company’s SEC filings are available publicly on the SEC’s website at www.sec.gov. The Company disclaims any obligation to update the forward-looking statements, whether as a result of new information, future events or otherwise.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities of the Company, nor shall there be any sale of any such securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of such state or jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
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