Affected by trade friction, Runxin Technology plans to suspend the acquisition of Bosda

On July 29, Runxin Technology issued an announcement stating that the company held the eighth meeting of the third board of directors on July 26, 2019, and reviewed and passed the "Proposal on Suspending the Planning of Major Asset Restructuring Matters", agreeing to suspend the planning of this major asset reorganization matter.

It is understood that the acquisition has been in progress for a year. As early as July 17, 2018, Runxin Technology announced that the company planned to acquire 100% of the equity of Quanxinke Electronic Technology (Shenzhen) Co., Ltd. (hereinafter referred to as "Quanxinke Electronic"), 51% of the shares of Upkeen Global Investment Limited (hereinafter referred to as "Upkeen") and 51% of the shares of Fast Achieve Ventures Limited (hereinafter referred to as "Fast Achieve") (the above three companies are collectively referred to as the "target companies"), and signed the "Intent Agreement to Issue Shares and Pay Cash to Purchase Assets" with the shareholders of the target companies.

According to previous disclosures, the core asset of Quanxin Electronics is the 49.00% shares of Upstar Technology (HK) Limited (hereinafter referred to as "Bosda") indirectly held by it through its wholly-owned subsidiary CG Technology (HK) Limited, the core asset of Upkeen is the 45.90% shares of Bosda directly held by it, and the core asset of Fast Achieve is the 5.10% shares of Bosda directly held by it.

Founded in 2010, Bosda is mainly engaged in the distribution of electronic components in the wireless mobile market, consumer electronics, industrial and other markets. Its product range includes low-power, small-signal wireless basic chips, programmable mixed-signal processing chips, low-power power management chips, audio processing chips, noise reduction chips, RF linear driver amplifiers, variable gain amplifiers, etc.

Runxin Technology said that since 2019, the volatility of the capital market and the Sino-US trade frictions, especially the US ban on sales to some mainland Chinese companies, have had an impact on the sales of overseas communications, smartphone chips and core technologies in mainland China. In the market environment where the uncertainty factors in planning this major asset reorganization have increased significantly, the company, from the perspective of safeguarding the interests of listed companies and all shareholders, especially the interests of small and medium-sized shareholders, has negotiated with the target company in a friendly manner and the company's board of directors has carefully studied and decided to suspend the planning of this asset reorganization from now on. After the international trade environment and situation become clear, the company will choose an opportunity to start related matters in compliance with relevant laws and regulations.

It is worth mentioning that this major asset reorganization is still in the planning stage, and the two parties to the transaction have not reached a final substantive agreement on the specific plan. The decision to suspend the planning of this major asset reorganization was made after careful research by the company, and the two parties to the transaction do not need to bear any liability for breach of contract for the suspension. The suspension of this reorganization will not have an adverse impact on the company's operations and the development of its existing business.