JHC Jinhua Capital Corporation

Jinhua Capital Corporation (the "Corporation") - (TSX VENTURE:JHC) announces,
further to its press release of August 26, 2010 announcing its proposed
Qualifying Transaction (the "Proposed Qualifying Transaction"), that it has
entered into a share purchase agreement (the "Share Purchase Agreement") dated
February 28, 2011 with Hugo International Creation Limited ("HKCo"), Zhejiang
Wenlan Trading Co., Ltd. ("WFOE"), Hoking Steel Structure Co., Ltd. ("Hoking"),
and the shareholders of HKCo (the "HKCo Shareholders"). Pursuant to the Share
Purchase Agreement, the Corporation will, by acquiring all of the issued and
outstanding shares of HKCo, indirectly acquire through a series of transactions
control of the business of Hoking (the "Acquisition").


HKCo and WFOE were established for the purpose of completing the Acquisition.
The equity of Hoking is owned 70% by Mr. Dai Jiankang and 30% by Mr. Yao
Weibing, both of Haining City, Zhejiang, the People's Republic of China. The
equity of WFOE is 100% owned by HKCo. HKCo is owned 51.91% by a company
controlled by Mr. Dai Jiankang, 17.96% by a company controlled by Mr. Yao
Weibing and 30.13% by other shareholders, each of which own less than 10% of the
issued shares of HKCo. WFOE, Hoking Dai Jiankang and Yao Weibing have entered
into a series of contractual relationships by virtue of which all of the
economic benefit in and control of Hoking is transferred to WFOE,
notwithstanding that the registered capital of Hoking continues to be held by
the Dai Jiankang and Yao Weibing.


At a special meeting of shareholders of the Corporation held October 27, 2010,
the shareholders approved the consolidation of the currently issued 7,000,000
issued and outstanding common shares of the Corporation on a 2 for 1 basis (the
"Consolidation"). The shareholders of the Corporation also approved the change
of name of the Corporation to "Hoking Steel Inc." or such other name approved by
the Corporation and Hoking and acceptable to the TSX Venture Exchange (the "Name
Change") and the continuance of the Corporation into the Province of Ontario
(the "Continuance"). The Consolidation, Name Change and Continuance are subject
to completion of the Proposed Qualifying Transaction.


Subject to the terms and conditions of the Share Purchase Agreement, the
acceptance by the TSX Venture Exchange and meeting other regulatory
requirements, the Corporation has agreed to purchase all of the ordinary shares
of HKCo held by the HKCo Shareholders in consideration of the Corporation
issuing to the HKCo Shareholders, on a proportionate basis in accordance with
the number of shares held by the HKCo Shareholders, an aggregate total of
78,750,000 post- consolidation common shares at a deemed price of $0.40 per
post-consolidation common share, for a total deemed consideration of
$31,500,000.


The closing of the Acquisition is conditional upon the Corporation closing an
offering (the "Offering") of a minimum of 5,000,000, and a maximum of 10,000,000
common shares at a price of $0.40 per share to raise proceeds in the minimum
amount of $2,000,000 and in the maximum amount of $4,000,000. The net proceeds
of the Offering will be used as set forth below.


In February 2011, HKCo obtained a short term loan (the "HKCo Loan") from a Hong
Kong based arm's length party. The principal amount of the HKCo Loan is US$1.5
million. The HKCo Loan bears interest at a rate of 5.35% per annum. Principal
and interest are payable at maturity in August 2011. HKCo used the borrowed
funds to contribute to WFOE's paid up capital, and WFOE agreed not to advance
any of its paid up capital to any third party (including Hoking) until HKCo
completes the Acquisition. On completion of the Acquisition, approximately $1.55
million of the net proceeds of the Offering will be used to repay the HKCo Loan,
at which time all of WFOE's paid up capital contributed by HKCo and the balance
of the net proceeds from the Offering, in a total amount of approximately $1.5
million in case of the Minimum Offering or $3.3 million in case of the Maximum
Offering, are expected to be advanced to Hoking. Hoking plans to use the funds
to expand its manufacturing shops (to build a steel pre-treatment workshop and a
steel component post-treatment workshop), and to use the remaining funds to
purchase new equipment (including an oil hydraulic press, a coil straightening
machine production line, a precise levelling machine, travelling cranes and
other electronic equipment).


It is intended that the Acquisition will constitute the Qualifying Transaction
of the Corporation in accordance with Policy 2.4 of the TSX Venture Exchange.
Pursuant to the policies of the TSX Venture Exchange, as the Corporation is a
capital pool company that is a reporting issuer in Ontario and is acquiring a
significant asset not located in Canada or the United States, the Corporation
will be preparing and filing a prospectus (the "Prospectus") in connection with
the Acquisition. The Offering will also be made pursuant to the Prospectus. A
receipt for the Prospectus will be required to be issued in order for the
Acquisition and Offering to close. There can be no assurance that such a receipt
will be issued.


The Corporation has entered into an engagement letter with PI Financial Corp.
("PI") pursuant to which PI will, subject to entering into a formal agreement
and completion of satisfactory due diligence, act as sponsor in connection with
the Proposed Qualifying Transaction and agent of the Corporation in relation to
the Offering on a commercially reasonable efforts basis. The agreement by PI to
act as sponsor should not be construed as any assurance with respect to the
merits of the transaction or the likelihood of completion.


Proposed Management

Further to the Corporation's press release of August 26, 2010, it is proposed
that the new board of directors, upon completion of the Qualifying Transaction,
will consist of five directors, three nominees of Hoking and two nominees of the
Corporation. The proposed directors and officers of the Resulting Issuer are:
Dai Jiankang (President, Chief Executive Officer, Chairman of the Board and
Director); Zhu Jianjie (Director); Paul Fung Yeun Law (Director); Francis N. S.
Leong (Director); Johnny Y. K. Pak (Director); Jacky Tengwu Long (Chief
Financial Officer); and Judith Hong Wilkin (Corporate Secretary). The proposed
director and officers not previously disclosed are as follows:


Johnny Y. K. Pak is a proposed director of the Resulting Issuer. He is currently
the Secretary, Chief Financial Officer and a director of the Corporation. Mr.
Pak is a businessman and executive. Since 1991, Mr. Pak has been the President
and part owner of Lake Louise Village Grill & Bar, in Lake Louise, Alberta. Mr.
Pak held auditing, accounting and executive positions with a chartered
accountants firm, a construction entity and in the garment manufacturing
industry in Hong Kong before migrating to Canada over twenty years ago. As well,
he is a former member of the Hong Kong Management Association.


Jacky Tengwu Long is the proposed Chief Financial Officer of the Resulting
Issuer. Mr. Long has been the Chief Financial Officer of Liuyang Fireworks
Limited since July 2009. Mr. Long is a chartered accountant and certified
internal auditor with more than a decade of accounting and finance experience.
Most recently, he was a senior auditor at Ernst & Young for their assurance
practice from 2006 to 2009. Prior to joining Ernst & Young, Mr. Long was a
financial service leader with GE Plastic China from 2000 to 2004 and previously
was a senior staff accountant with Ciba Specialty Chemicals China. Mr. Long has
a master's degree in Management and Professional Accounting from the University
of Toronto. Mr. Long is acting as a consultant to Hoking.


Judith Hong Wilkin is the proposed Corporate Secretary of the Resulting Issuer.
Ms. Wilkin has been a lawyer practicing securities law at the law firm of
Fogler, Rubinoff LLP since 2000, except during January to May 2006 when she was
a lawyer at the law firm of Freshfields Bruckhaus Deringer at its Hong Kong
office. Ms Wilkin holds a Master of Law degree from York University, a Bachelor
of Law degree from the University of Ottawa, a Bachelor of Arts degree from
Lakehead University and a Bachelor of Education (Honours) degree from Southwest
China University.


Trading in the shares of the Corporation will remain halted until such time as
the Qualifying Transaction is completed and the Offering is closed.


Completion of the Proposed Qualifying Transaction is subject to a number of
conditions, including but not limited to, TSX Venture Exchange acceptance. There
can be no assurance that the Proposed Qualifying Transaction will be completed
as proposed or at all.


Investors are cautioned that, except as disclosed in the Prospectus, any
information released or received with respect to the Proposed Qualifying
Transaction may not be accurate or complete and should not be relied upon.
Trading in the securities of a capital pool company should be considered highly
speculative.


Statements in this press release contain forward-looking information within the
meaning of applicable securities law. Forward-looking information is frequently
characterized by words such as "contemplates", "intends", "plan", "expect",
"project", "believe", "anticipate", "estimate" and other similar words, or
statements that certain events or conditions "may" or "will" occur. In
particular, forward-looking information in this press release includes, without
limitation, statements with respect to: completion of the Acquisition, the
closing of the Offering, and receipt of all necessary regulatory and third party
approvals. Readers are cautioned that assumptions used in the preparation of
forward-looking information may prove to be incorrect. Although the Corporation
believes that the expectations reflected in the forward-looking information is
reasonable, there can be no assurance that such expectations will prove to be
correct. The Corporation cannot guarantee future results, level of activity, or
performance of achievements. Consequently, there is no representation that the
actual results achieved will be the same, in whole or in part, as those set out
in the forward-looking information.


Forward-looking information is based on the opinions and estimates of management
at the date the statements are made, and are subject to a variety of risks and
uncertainties and other factors (many of which are beyond the control of the
Corporation) that could cause actual events or results to differ materially from
those anticipated in the forward-looking information. Some of the risks and
other factors could cause results to differ materially from those expressed in
the forward-looking information include, but are not limited to: foreign
operations; general economic conditions in China, Canada and globally; the risks
associated with the steel structure industry; and exchange rate changes.
Industry related risks could include, but are not limited to: operations with
foreign entities; delays or changes in plans; competition for, among other
things, capital, acquisitions, skilled personnel and supplies; governmental
regulation of the technology industry; technical problems; the uncertainty of
estimates and projections of costs and expenses; unanticipated operating events
or performance which can reduce productivity; the need to obtain required
approvals from regulatory authorities; stock market volatility; liabilities
inherent in technology operations; access to capital; and other factors. Readers
are cautioned that this list of risk factors should not be construed as
exhaustive.


The forward-looking information contained in this news release is expressly
qualified by this cautionary statement. The Corporation undertakes no obligation
to update or revise any forward- looking statements to conform such information
to actual results or to changes in its expectations except as otherwise required
by the requirements of the TSX Venture Exchange and applicable securities
legislation. Readers are cautioned not to place undue reliance on
forward-looking information.

Grafico Azioni Jinhua Capital (TSXV:JHC)
Storico
Da Mag 2024 a Giu 2024

Grafico Azioni Jinhua Capital (TSXV:JHC)
Storico
Da Giu 2023 a Giu 2024