CHANGSHA, China, Sept. 9, 2020 /PRNewswire/ -- Urban Tea Inc. (the "Company," "we" or "Urban Tea") (NASDAQ: MYT), a premier retailer of specialty teas and baked goods headquartered in Hunan, China, announced today that the Company has signed a non-binding Letter of Intent ("LOI") to acquire 80% of the equity interest of Guokui Management Inc. ("Guokui Management"), a company incorporated under the laws of New York State. Guokui Management's first restaurant, Crop Circle, is a casual restaurant opened in August 2020, located in Greenwich Village near Washington Square Park, New York City. The restaurant offers light Chinese meals and snacks such as dumplings and rice noodle rolls, and features its specialty—"guokui." Guokui is a flatbread baked in a clay oven with various choices of flavorful fillings such as shrimp, beef, pork, chicken, preserved vegetables and brown sugar, a popular street snack originating from northern China's Shanxi province.
Pursuant to the terms of the LOI, the Company shall pay Guokui Management $400,000 in cash in consideration for 80% of the equity interest in Guokui Management. In addition, following the consummation of the planned Acquisition, the Company plans to open additional joint venture stores with the shareholders of Guokui Management, and incentivize the current shareholders of Guokui Management by issuing a certain number of the Company's restricted shares based on future operation and expansion milestones.
"The restaurant and food retail industry in America is large and quickly adapting to the new norm. We continue to see tremendous potential in overseas markets after the successful grand opening of our first tea house, Meno," said Mr. Long Yi, CEO of Urban Tea. "This planned acquisition would be another major step forward in establishing our footprint in the U.S. as we are pivoting our efforts to tap into the casual take-out dining market. We believe that our operational knowledge and experience will synergize well with the strengths of Guokui Management's brand and management team here in the U.S. We are optimistic about opening additional restaurants to grow our market share and are committed to creating strategic overseas expansion plans. Our mission is to become a reputable multicultural chain enterprise with a portfolio of brands."
Completion of the acquisition is subject to due diligence investigations by the relevant parties, the negotiation and execution of a definitive share purchase agreement, satisfaction of the conditions negotiated therein, the approval of the Company's Board of Directors and the satisfaction of other customary closing conditions. There can be no assurance that a definitive agreement will be entered into or that the proposed transaction will be consummated. Further, readers are cautioned that those portions of the LOI that describe the proposed transaction, including the consideration to be issued therein, are non-binding.
About Urban Tea, Inc.
Urban Tea, Inc. is an emerging specialty tea product distributer and retailer headquartered in Changsha City, Hunan Province, China. Through its wholly owned subsidiary, Mingyuntang (Shanghai) Tea Limited which controls Hunan Ming Yun Tang Brand Management Co., Ltd. and Hunan 39 Pu Tea Co., Ltd., the Company currently market a wide range of trendy tea drinks, light meals, and pastries targeting China's new urban generation in Hunan province. Our products are focused on not only their taste but also their aesthetic presentation and health benefits. Our products are currently being offered via our own stores. For more information, please visit: http://ir.h-n-myt.com/investor.
This press release contains certain statements that may include "forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the uncertainty about the spread of the COVID-19 virus and the impact it will have on the Company's operations, the demand for the Company's products, supply chains, local government's regulation of restaurants, and economic activity in general. These and other risks and uncertainties are detailed in the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the applicable securities laws, the Company does not assume a duty to update these forward-looking statements.
SOURCE Urban Tea Inc.