Strategy & Practice Management

Nisun-Controlled Henan Fintech Enters into Share Acquisition Agreement with Youjiatian

Nisun International Enterprise Development Group Co., Ltd ("Nisun" or the "Company") (Nasdaq: NISN), a provider of innovative comprehensive solutions through an integration of technology, industry, and finance, announced that on January 14, 2022, Fintech (Henan) Supply Chain Management Co., Ltd ("Henan Fintech"), a subsidiary of Fintech (Shanghai) Digital Technology Co., Ltd and controlled affiliate of the Company, entered into a share acquisition agreement (the "Agreement") with Henan Youjiatian Agricultural Technology Co., Ltd ("Youjiatian Agricultural" or "Youjiatian") and its sole shareholder to acquire a majority equity interest in Youjiatian.

Established in 2016, Youjiatian is an agricultural supply chain management company. As a result of the booming development of the agricultural industry in the Henan province, it has recently experienced rapid growth. With vegetables, mushrooms and other edible fungi as its main product lines, Youjiatian has established a comprehensive operation model, and has served B-end leading enterprises such as Sanquan Food, Sinian Food, and Qianwei Central Kitchen for many years. In recent years, Youjiatian has begun to penetrate into new retail formats such as 7-11 convenience stores and Hema Xiansheng, a subsidiary of Alibaba Group.

Pursuant to the Agreement, Henan Fintech agreed to acquire 51% of Youjiatian's equity for a cash consideration of RMB0.51 million (approximately USD80,280) based on the agreed-upon value of the shares to be acquired. The selling shareholder would be responsible for all debts of Youjiatian incurred prior to the acquisition and pledge the remaining 49% equity as collateral to guarantee the repayment of these debts. Youjiatian agreed to obtain certain land use rights and pledge such rights and all real properties on the land as additional collateral to secure the repayment of the pre-existing debts. As the majority shareholder, Henan Fintech (or its affiliates) would provide loan funds for Youjiatian's operations, as set forth in the Agreement. The parties further agreed to annual revenue and net income performance targets for Youjiatian as well as a performance-based profit allocation schedule between the two parties. Under certain circumstances, the selling shareholder would be obligated to repurchase the equity interest acquired by Henan Fintech for RMB0.51 million in cash. The transaction is expected to close in 90 days.

"This past year, Henan Fintech continued to explore new opportunities and has made remarkable achievements to establish its brand, adjust its internal structure, recruit a talent team and build our company culture," said Nan Li, General Manager of Henan Fintech. "The acquisition of Youjiatian Agricultural will facilitate our expansion into the agricultural industry while providing opportunities to acquire more companies in the industry. Henan Fintech strives to build its brand power to further contribute to China's strategy for rural revitalization."

During the agreement signing ceremony, Guifeng Xu, Chairman of Youjiatian Agricultural, said: "Through this acquisition, Youjiatian Agricultural will benefit from Henan Fintech's line of capital and capacity for advanced supply chain integration to further broaden the scale of our business and expand to other regions in China."

With the agricultural industry as one of its core service segments, Nisun will continue to use its advantages to maintain comprehensive coverage and dynamic circulation in the agricultural supply chain, providing high-quality and effective supply chain management solutions to current and potential clients.