On 24 November 2016, the Company entered into an investment agreement with
Meicai (previously named Spruce), pursuant to which the Company agreed to subscribe
for the newly issued 34,441,169 shares of Meicai’s series D preferred shares at a
cash consideration of US$25.70 million. Meicai is a holding company incorporated
in the Cayman Islands. Its business model shortens the flow of agricultural products
at all levels, reducing the cost of raw material procurement, manpower and prices for
customers, while providing customers with a wide range of commodities, connecting
one end of the supply chain to the fields and one end to urban consumers, satisfying
users with a “one-stop shopping” experience. With small and medium-sized food and
beverage merchants as the entry point, Meicai focuses on providing restaurants and
fruit and vegetable shops with a one-stop, full range of raw material procurement
services for food and beverage. Meicai is an independent third party of the Group.
During the Period, Meicai remained growing steadily with high quality in the food and
beverage supply chain by continuously optimising its business structure, improving its
organisational network and improving synergies, resulting in continuous improvement
in financial performance, and achieved breakeven. The Company is confident that
Meicai will continue its business expansion at a satisfactory growth rate, and become a
leader in this industry.
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