CHANGSHA, China, Aug. 27, 2020 /PRNewswire/ -- Urban Tea Inc. (the
"Company," "we" or "Urban Tea")
(NASDAQ: MYT), a premier retailer of specialty teas and baked goods
based in Hunan, China, announced
today that the Company and its wholly-owned subsidiary Hunan Ming
Yun Tang Brand Management Co., Ltd. ("Ming Yun Tang") entered into a
non-binding letter of intent ("LOI") with Chuangyeying
Brand Management Co., Ltd. ("CYY"), Store Master Food
Trading Co., Ltd. ("Store Master") and the shareholders of
CYY and Store Master.
CYY has franchise permit and owns multiple registered trademarks
in China. It currently manages
over 300 tea beverages franchisees. Store Master specializes in
supply chain management, product research and development, and
optimizing long-term and stable supply chains. Store Master also
owns a scalable warehouse with an advanced logistics management
system. CYY and Store Master are commonly owned by five
individuals.
The LOI contemplates that the parties would enter into certain
definitive agreement pursuant to which Ming
Yun Tang will acquire 51% of each of the two companies'
equity with cash and restricted shares of Urban Tea. If the acquisitions are completed,
the collaboration will consolidates the resources and expertise of
Ming Yun Tang, CYY, and Store Master
in brand management, sales networks, and supply chain technologies
to better serve our customers and expand our business. As the
transaction proceeds, the Company will publicly disclose required
information either through press releases or SEC filings, as
appropriate.
Ms. Kan Lu, Chief Financial Officer of Urban Tea, commented, "This LOI indicates
management's strong determination in the execution of our domestic
expansion plan. Moving forward, we will work with all parties to
negotiate and finalize the definitive acquisition agreements. If
definitive agreements are executed as planned, Ming Yun Tang will have control over more than
300 franchisees along with a more complete supply chain
system, stronger R&D capability, and more expansive marketing
channels in China upon completion
of the acquisitions."
Mr. Chen Min, Founder of CYY,
said, "I am delighted to enter into this LOI with Hunan Ming Yun
Tang. The planned acquisition will leverage our combined expertise
and resources to accelerate our business development to the next
level. "
Completion of the acquisition is subject to due diligence
investigations by Ming Yun Tang, the
negotiation and execution of definitive agreement, satisfaction of
the conditions negotiated therein including the approval of the
Company's Board of Directors, 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, Mingyuntang (Shanghai) Tea Limited which
controls Hunan Ming Yun Tang Brand Management Co.,
Ltd. and Hunan 39 Pu Tea Co., Ltd., 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. For more information, please
visit: http://ir.h-n-myt.com/investor.
Forward-Looking Statements
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, involving known and unknown risks
and uncertainties. Although the Company believes that the
expectations reflected in these 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 the uncertainty about the spread of the COVID-19
virus and the impact it will have on the Company's operations, the
demand for the Company's products, supply chains, local
government's regulation of restaurants, and economic activity in
general. These and other risks and uncertainties are detailed in
the risk factors discussed in the Company's periodic reports that
are filed with the Securities and Exchange Commission and available
on the SEC's 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 risk
factors. Other than as required under the applicable 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 Urban Tea or other parties
to the LOI following announcement of the LOI and transactions
contemplated therein; the inability to complete the transactions
contemplated by the LOI due to the satisfy closing conditions;
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 Urban Tea.
Additional information concerning these and other factors that
may impact our expectations and projections will be found in our
periodic filings with the SEC, including our Annual Report on Form
20-F for the fiscal year ended June 30,
2019. Urban Tea's SEC filings
are available publicly on the SEC's website at www.sec.gov.
Urban Tea disclaims any obligation
to update the forward-looking statements, whether as a result of
new information, future events or otherwise.
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SOURCE Urban Tea Inc.