Intercap Announces Letter of Intent to Acquire a Joint Venture Enterprise
Intercap eCommerce Inc. announced that it has entered into a letter of intent with Ningbo Guantong Photoelectricity Technology Co., Ltd. (NGPET), a private China-based company. Pursuant to the Letter of Intent, Intercap and NGPET have agreed to form a joint venture enterprise under the name of Ningbo Guantong Electronics Technology Co., Ltd. ("JV Company"), which company has been formed for the development, production and sale of power supply drives for various LED lighting products.
The Power Supply Drives for LED lighting products is similar to a computer circuit board and is required for every LED lighting product. The Power Supply Drive controls the flow of the LED lighting energy. The JV Company will be a China-based corporation and will carry on business in the City of Yuyao, in the Zhejiang Province of the People’s Republic of China and will be governed by the laws of the People’s Republic of China.
The proposed transaction is an arm’s length transaction which will result in a change of business for Intercap under the policies of the TSX Venture Exchange and as such will be subject to acceptance by the TSX Venture Exchange.
Pursuant to the Letter of Intent, the total amount of investment of the JV Company is USD$1.5 million. Intercap will pay USD$765,000 representing 51% of the total investment. NGPET will pay the balance of USD$735,000. Intercap intends to proceed with a private placement (the "Financing") in order to fund the Transaction. The Financing will consist of up to 5,000,000 common shares in the capital of the company at a price of $0.07 per common share for gross proceeds of up to $350,000.
The company will use the proceeds received from the Financing to purchase equipment and materials, pay rent, to start manufacturing LED Power Supply Drives and as general working capital. The company intends to complete the Financing prior to the close of the Transaction.