BAODING, China, May 27, 2020 /PRNewswire/ -- IT Tech Packaging, Inc. (NYSE MKT: ITP) ("IT Tech Packaging" or "the Company"), a leading manufacturer and distributor of diversified paper products in North China, today announced that its operating entity in China, Hebei Baoding Dongfang Paper Milling Company Limited ("Dongfang Paper"), has entered into a letter of intent to acquire 60% equity interest in Baoding Huizhi Ruixing Information Technology Co., Ltd. ("HZRX"), a new high technology company with registered capital of RMB10 million focused on providing intelligent healthcare IT solutions to hospitals, medical institutions, government agencies, enterprises and public institutions in China. HZRX also focus on utilization of block chain technologies to provide solutions of privacy, encryption, and security in the health care industry.
Pursuant to the Letter of Intent entered into on May 26, 2020 by and between Dongfang Paper and HZRX, the Company will acquire 60% equity interest in HZRX for i) total cash consideration of between RMB10 million minimum and RMB20 million (approximately US$1.4 million to US$2.8 million), and ii) total equity consideration of 500,000 of the Company's restricted common stock (the "Proposed Transaction"). The Proposed Transaction is subject to a definitive acquisition agreement to be negotiated between the two parties, following further financial and legal reviews and approval of the Company's Board of Directors, as well as other customary closing conditions. The Company plans to facilitate the proposed transaction by using cash on hand and issuing new shares.
Mr. Zhenyong Liu, the CEO and Chairman of the Company commented, "We are impressed by the operation capability of the HZRX and optimistic about the intelligent healthcare niche market as we just launched our initiative in healthcare sector to prepare us for the next phase of growth. HZRX anticipates that its total sales revenue and net income will be approximately $17 million and $4 million, respectively, for 2020. We believe the acquisition of 60% of HZRX will provide solid contribution to our earnings and pave the way for us for further growth in the intelligent healthcare businesses. In 2015, China became the world's third largest intelligent healthcare market, behind the United States and Japan. The investment in China's intelligent healthcare market was RMB70.6 billion in 2018 and it is expected to be RMB100 billion by 2020, according to the Zhongshang Industry Research Institute. We are currently evaluating market opportunities in this new businesses and expect to officially launch these new businesses upon the completion of the above-mentioned transactions."
About Baoding Huizhi Ruixing Information Technology Co., Ltd.
Headquartered in Baoding City, Hebei Province, Huizhi Ruixing Information Technology Co., Ltd., a high-tech company specializes in providing intelligent healthcare IT solutions to hospitals, medical institutions, government agencies, enterprises and public institutions in China. At present, the company has developed a series of proprietary intelligent medical information technology solutions, including adverse event reporting system, non-tax electronic bills system, infectious disease monitoring and reporting system, regional care system (for maternal, child and pension), traditional Chinese medicine decoction and regional delivery system, regional medical and nursing exam systems, etc. The company also focuses on utilization of block chain technologies to provide solutions of privacy, encryption, and security in the health care industry.
About IT Tech Packaging, Inc.
Founded in 1996, IT Tech Packaging, Inc. is a leading manufacturer and distributor of diversified paper products in North China. Using recycled paper as its primary raw material (with the exception of its tissue paper products), ITP produces and distributes three categories of paper products: corrugating medium paper, offset printing paper and tissue paper products. With production based in Baoding and Xingtai in North China's Hebei Province, ITP is located strategically close to the Beijing and Tianjin region, home to a growing base of industrial and manufacturing activities and one of the largest markets for paper products consumption in the country. ITP has been listed on the NYSE MKT since December 2009.
Safe Harbor Statements
This press release may contain forward-looking statements. These forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks outlined in the Company's public filings with the Securities and Exchange Commission, including the Company's latest annual report on Form 10-K. All information provided in this press release speaks as of the date hereof. Except as otherwise required by law, the Company undertakes no obligation to update or revise its forward-looking statements.
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