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.
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