MONTREAL, QUEBEC – (NEWSFILE – December 27, 2018) – Peak Positioning Technologies Inc. (CSE: PKK) (“Peak” or the “Company”) today announced that it has concluded an agreement with Wenyi Financial Services Co. Ltd. (“Wenyi”) whereby Wenyiwill effectively transfer its operations,including most of its 20 employees, service agreements and assets, to newly created wholly-owned Peak subsidiary Asia Synergy Credit Solutions (“ASCS”)by no later than December 31, 2018.
Wenyi offers turn-key credit outsourcing services to banks and other lending institutions in China where it essentially becomes its clients’ commercial lending departments. Wenyi’s clients provide the capital and collect the loan repayments, while Wenyi finds the clients, qualifies them and does all of the administrative work related to servicing the loans.Wenyi receives monthly service fees amounting to an annual interest rate of approximately 8.25% on the loans it services. As of the end of October, Wenyi was on pace to finish 2018 with $1.2M in revenue and $400,000 in EBITDA, servicing approximately $18M in loans.
Following the transfer of Wenyi’s operations to ASCS, ASCS will use Peak’s Cubeler commercial lending platform to automate the services previously provided by Wenyiwhich will allow for the acceleration of the number of banks and lenders that the services can be provided to.
Wenyi was founded in 2015 by Mr. Jiangang Qiu, a former Construction Bank of China (“CBC”) executive with over 20 years of experience in the Chinese banking industry. While working at the CBC, Mr. Qiu noticed the banks’difficulty, or in some cases their unwillingness, to meet the credit needs of small and medium-sized businesses. So he created Wenyi as a company to which banks and other commercial lenders could essentially outsource their small business commercial lending activities.
“The Cubeler platform was designed to attract and support an unlimited number of lenders and allow them to automate and make their commercial lending activities more efficient”, commented Johnson Joseph, President and CEO of Peak. “When we learned about Wenyi, we knew that the services they were already providing to lenders in China would be the perfect complement to Cubeler, so we approached Mr. Qiu to discuss the transaction being announced today. This is a big step for Peak moving forward. It allows us to validate the Cubeler business model and instantly begin generating revenue through ASCS on January 1, 2019. In addition to that, the transaction also brings to the Peak family an experienced team of banking executives, led by Mr. Qiu and former Wenyi managers with an extensive network of industry contacts for future business development opportunities.I can’t think of a better way to close out 2018 and am excited to show our shareholders what this transaction really means for the future of the Company”, concluded Mr. Joseph.
Under the terms of the agreement, Mr. Qiu will be named CEO of ASCS, a position he also occupied at Wenyi. As compensation for having transferred its operations to ASCS, Wenyi’sshareholders will receive up to 4M Peak common shares per quarter over the first four quarters beginning on January 1, 2019, and up to 2M Peak common shares per quarter over the next two quarters after that for a total of 20M Peak common shares over an 18-month period. Wenyi’s shareholders will receive the maximum number of Peak common shares to which they are entitled in a quarter only if ASCS generates a minimum of $125,000 in EBITDA for the quarter, otherwise they will receive a pro-rata number of Peak common shares of the EBITDA generated by ASCS for the quarter. The Peak common shares issued to Wenyi’s shareholders will be deemed to have been issued at a price of $0.10 per share. If at the end of the 18-month period over which the shares are to be issued, a total of 20M shares were issued to Wenyi’s shareholders and the listed price of Peak’s common shares is less than $0.10, then Wenyi’s shareholders will receive a number of additional Peak common shares such that the total aggregate value of the previously issued shares and the additional shares multiplied by the listed price of Peak’s common sharesat that time equals $2M.
About Peak Positioning Technologies Inc.:
Peak Positioning Technologies Inc. is an IT portfolio management company whose mission is to assemble, finance and manage a portfolio of promising companies and assets in some of the fastest-growing tech sectors in China, including fintech, e-commerce and cloud-computing. Peak provides a bridge for North American investors who wish to participate in the continued digitization of China’s industrial sectors through the latest advancements in technology. For more information: http://www.peakpositioning.com
CHF Capital Markets
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President and CEO
Peak Positioning Technologies Inc.
Phone: 514-340-7775 ext.: 501
Forward-Looking Statements / Information:
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