Shenzhen ZQGame Co.,Ltd. (SZSE:300052) entered into an agreement to acquire Shenzhen Baoteng Internet Technology Limited from Powerleader Science & Technology Group Limited (SEHK:8236) for CNY 500 million on September 1, 2016. Under terms of the agreement, CNY 125 million shall be paid within 3 business days after the signing of the agreement, CNY 130 million shall be paid within 30 days after the completion and remaining CNY 245 million shall be paid in installments at end of the years 2017, 2018 and 2019. As a part of transaction, Powerleader and Zqgame also entered into the profit guarantee compensation agreement, pursuant to which Powerleader will guarantee that the net profit of Baoteng Internet for the three financial years ending 31 December 2017, 2018 and 2019 in aggregate will not be lower than CNY 110.3 million. If Baoteng Internet records a loss in 2017 or 2018, Powerleader Science & Technology Group Limited will not receive any corresponding portion of consideration in 2018 or 2019 and if there remains any portion of consideration unpaid, the Company will receive the balance of consideration in 2020 after the issue audit report of Baoteng Internet for 2019. If the Company can achieve the total guarantee net profit in either 2017 or 2018, it will not receive any consideration in 2020 because it would have already received the balance of the consideration in full earlier. Also, CDN business of Baoteng Internet will be retained by Powerleader. Baoteng Internet reported an annual revenue of CNY 27.6 million, net profit of CNY 0.68 million and total assets of CNY 81.6 for year ended on December 31, 2015.

The acquisition is subject to approval from board of directors and shareholders of Zqgame, board of directors and shareholders of Powerleader Science & Technology, approval by Shenzhen Stock Exchange and other competent authorities. Powerleader and Zqgame have agreed that if the agreement fails to take effect, it wiill refund to Zqgame the portion of the consideration received from Zqgame plus bank interest over the same period. An independent board committee of the Board comprising all the independent non-executive Directors, namely Chan Shiu Yuen Sammy, Guo Wanda and Jiang Baijun, who have no material interests in the transactions contemplated under the disposal has been formed to advise the independent shareholders of the Powerleader Science & Technology Group Limited (SEHK:8236). As on December 16, 2016, the transaction is approved by board of SHENZHEN. The completion shall take place on a date to be agreed by the Powerleader Science & Technology Group Limited and Shenzhen ZQGame Co.,Ltd after the above conditions of the Agreement have been fulfilled. Extraordinary General Meeting will be held on June 26, 2017.

ShineWing Certified Public Accountants Co., Ltd acted as accountant for Powerleader Science & Technology Group Limited. Vinco Capital Limited acted as Financial advisor to the Independent Board Committee and the Independent Shareholders of Powerleader Science & Technology Group Limited. Vocation (Beijing) International Assets Appraisal Co., Ltd., acted as independent valuer for Powerleader Science & Technology Group Limited.

Shenzhen ZQGame Co.,Ltd. (SZSE:300052) completed acquisition of Shenzhen Baoteng Internet Technology Limited from Powerleader Science & Technology Group Limited (SEHK:8236) on June 27, 2017.