As at the Latest Practicable Date, our Company has indirect interests in and Contractual Arrangements with the following companies, particulars of which are set out below:
Name of company
Date of
incorporation Registered capital
Attributable interest to
our
Company Principal activities
Yangguang United Media . . . October 25, 2010 RMB15,000,000 100% TV program production services Walking Forward Media . . . January 9, 2014 RMB14,853,061 51% TV program production services Gongchuang Shuangying(Note 1) . . November 21, 2011 RMB10,000,000 80% dormant
Tongsheng Lianmeng(Note 1) . . . . February 16, 2012 RMB2,000,000 100% dormant Yangguang Shixian(Note 1) . . . . . October 29, 2012 RMB1,000,000 100% dormant Hechuang Huihuang(Note 1) . . . . November 6, 2012 RMB1,000,000 100% dormant Yangguang Zongheng(Note 1) . . . March 28, 2013 RMB10,000,000 100% dormant Tianjin Guosheng(Note 1) . . . . . July 22, 2014 RMB2,000,000 100% dormant Tianjin Guoxuan(Note 1) . . . . August 6, 2014 RMB10,000,000 51% dormant
Note 1: These subsidiaries are in the process of voluntary dissolution, after the transfer of business as part of the Reorganization.
The following sets forth the respective corporate history of our operating entities in the PRC controlled through the Contractual Arrangements since their respective dates of establishment.
Yangguang United Media
Yangguang United Media was principally engaged in internet advertising services, infomercial marketing services and brand advertising services before Reorganization, and was one of our principal operating entities. We have transferred the business operated by Yangguang United Media which are not regarded as “restricted” or “prohibited” to subsidiaries of Fortran Interactive, the details of which are disclosed in the paragraph “Transfer of business” in this section. After such transfer, Yangguang United Media is mainly engaged in the business of TV program production services.
Yangguang United Media was established as a limited liability company in the PRC with a registered and paid up capital of RMB15,000,000 on October 25, 2010. As at the commencement of the Track Record Period, Yangguang United Media was owned as to 100% by Mr. Huang Yongwei.
On December 1, 2012, Mr. Huang Yongwei and Ms. Huang Tingting entered into a share transfer agreement, pursuant to which Mr. Huang Yongwei transferred 5% equity interest in Yangguang United Media to Ms. Huang Tingting at the consideration of RMB750,000 determined with reference to its registered capital. The change of registration in the Administration for Industry and Commerce for the share transfer was completed on December 7, 2012. After the completion of such transfer, Yangguang United Media was owned as to 95% by Mr. Huang Yongwei and 5% by Ms. Huang Tingting. Our PRC legal advisors have confirmed that the above share transfer has been properly and legally completed as at the Latest Practicable Date.
Since May 2015 we have operated our business of TV program production services through Yangguang United Media and its subsidiary Walking Forward Media. For details of Walking Forward Media, please refer to the relevant disclosure in the following paragraphs.
Walking Forward Media
Walking Forward Media was established as a limited liability company in the PRC on January 9, 2014 with registered capital of RMB10,000,000 and paid up capital of RMB3,000,000. Upon its establishment, Walking Forward Media was owned as to 78% by Mr. Yang Wenqi (楊汶其) and 22% by Mr. Chen Xiaodong (陳曉冬). Walking Forward Media is principally engaged in the business of TV program production services and is currently one of our principal operating subsidiaries.
Yangguang United Media, Mr. Yang Wenqi, Mr. Chen Xiaodong and Walking Forward Media entered into a share transfer and capital injection agreement on April 1, 2015, pursuant to which Mr. Yang Wenqi and Mr. Chen Xiaodong agreed to establish Tibet Walking Forward Investment Co., Ltd. (西藏衛
風投資有限公司) (“Tibet Walking Forward”) to acquire 100% equity interest in Walking Forward
Media. Subsequently, Yangguang United Media would (i) acquire 27.22% equity interest in Walking Forward Media from Tibet Walking Forward, and (ii) inject further capital into Walking Forward Media to obtain 51% equity interest hereof.
As such, several steps were/will be taken as follows:
Acquisition of equity interest in Walking Forward Media
Tibet Walking Forward was established as a limited liability company in the PRC on April 9, 2015 to acquire 100% equity interest in Walking Forward Media. Upon its establishment, Tibet Walking Forward was owned as to 78% by Mr. Yang Wenqi and 22% by Mr. Chen Xiaodong, then Independent Third Parties.
On May 8, 2015, Yangguang United Media and Tibet Walking Forward entered into a share transfer agreement in respect of the transfer of 27.22% equity interest in Walking Forward Media at the consideration of RMB25,000,000, determined through arm’s length negotiations. The change of registration in the Administration for Industry and Commerce for the above share transfer was completed on May 14, 2015. After completion of such transfer, Walking Forward Media was owned as to 72.78% by Tibet Walking Forward and 27.22% by Yangguang United Media. On June 16, 2015, RMB5,000,000 was paid to Tibet Walking Forward.
Capital injection in Walking Forward Media
Yangguang United Media has also agreed to inject capital of RMB30,000,000 into Walking Forward Media, of which RMB4,853,061 will be credited as registered capital and the remaining RMB25,146,939 will be credited as capital surplus, so that the equity interest held by Yangguang United Media in Walking Forward Media will increase to 51% on a fully diluted basis. The change of registration in the Administration for Industry and Commerce for the capital injection was completed on May 14, 2015. After completion of such capital increase, Walking Forward Media was owned as to 51% by Yangguang United Media and 49% by Tibet Walking Forward. On June 16, 2015, RMB10,000,000 was injected into Walking Forward Media.
As at the Latest Practicable Date, the registered capital of Walking Forward Media is RMB14,853,061. Our PRC legal advisors have confirmed that the transfer of shares and capital injection have been properly and legallycompleted as at the Latest Practicable Date.
Subsidiaries which are in the process of dissolution
Gongchuang Shuangying, Tongsheng Lianmeng, Yangguang Shixian, Hechuang Huihuang, Yangguang Zongheng, Tianjin Guosheng, and Tianjin Guoxuan are in the process of voluntary dissolution as at the Latest Practicable Date, as the businesses engaged by these subsidiaries are not regarded as “restricted” or “prohibited” under the Catalogue, and have been transferred to the newly-established subsidiaries of Fortran Interactive as part of the Reorganization, the details of which are disclosed in the paragraph headed “Transfer of business” in this section.
Gongchuang Shuangying
Gongchuang Shuangying was established as a limited liability company in the PRC on November 21, 2011 with a registered and paid up capital of RMB10,000,000, 100% held by Mr. Bian Zhijie as the registered holder. As confirmed by Mr. Bian Zhijie, he held such equity interest on behalf of Yangguang United Media from November 21, 2011 (being the date of incorporation of Gongchuang Shuangying) to December 1, 2012 and the paid up capital of Gongchuang Shuangying was provided by Mr. Huang Yongwei on behalf of Yangguang United Media. Mr. Bian Zhijie exercised his shareholder’s right under the instruction of Yangguang United Media.
On December 1, 2012, Yangguang United Media instructed Mr. Bian Zhijie to enter into a share transfer agreement with Yangguang United Media, pursuant to which Mr. Bian Zhijie transferred 75% equity interest in Gongchuang Shuangying to Yangguang United Media at the consideration of RMB7,500,000, determined with reference to the then registered capital. Yangguang United Media paid the consideration of RMB7,500,000 to Mr. Bian Zhijie on September 30, 2013 for his onward repayment to Mr. Huang Yongwei.
On December 1, 2012, Yangguang United Media instructed Mr. Bian Zhijie to enter into separate share transfer agreements with three employees of Gongchuang Shuangying, namely Mr. Zhang Huimin, Mr. Chen Xinjia and Mr. Xie Qian, pursuant to which Mr. Bian Zhijie transferred 15%, 5% and 5% equity interest in Gongchuang Shuangying to Mr. Zhang Huimin, Mr. Chen Xinjia and Mr. Xie Qian, respectively. In consideration, Mr. Zhang Huimin, Mr. Chen Xinjia and Mr. Xie Qian shall assume amounts payable from Yangguang United Media to Mr. Huang Yongwei of RMB1,500,000, RMB500,000 and RMB500,000, respectively. The considerations were determined with reference to the then registered capital.
Shortly before the resignation of Mr. Xie Qian, Yangguang United Media and Mr. Xie Qian entered into a share transfer agreement on November 1, 2013, pursuant to which Mr. Xie Qian transferred his 5% interest in Gongchuang Shuangying to Yangguang United Media at the consideration of RMB500,000, determined with reference to the then registered capital. Yangguang United Media paid the consideration of RMB500,000 to Mr. Xie Qian on December 31, 2014 for his onward repayment to Mr. Huang Yongwei. The changes of registration in the Administration for Industry and Commerce for the share transfers were completed on December 7, 2012 and December 3, 2013. After the completion of such transfers, Gongchuang Shuangying was owned as to 80% by Yangguang United Media, 15% by Mr. Zhang Huimin and 5% by Mr. Chen Xinjia. Our PRC legal advisors have confirmed that the above share transfers have been properly and legally completed as at the Latest Practicable Date.
Gongchuang Shuangying was principally engaged in brand advertising services. Tongsheng Lianmeng
Tongsheng Lianmeng was established as a limited liability company in the PRC on February 16, 2012 with a registered and paid up capital of RMB500,000 and was owned as to 100% by Ms. Cai Xueying. The registered capital of Tongsheng Lianmeng was then increased to RMB2,000,000. On the instruction of Yangguang United Media, Ms. Hu Jiaoyan entered into a share transfer agreement with Ms. Cai Xueying in order to obtain airtime resources procured by Tongsheng Lianmeng for the year ended December 31, 2013. Pursuant to the agreement, Ms. Cai Xueying transferred her 100% equity interest in Tongsheng Lianmeng to Ms. Hu Jiaoyan at the consideration of RMB1,900,000, which was determined through arm’s length negotiation and Ms. Hu Jiaoyan confirmed she received the consideration as at January 2014. The change of registration in the Administration for Industry and Commerce for the share transfer was completed on December 5, 2012. Our PRC legal advisors have confirmed that the above share transfer has been properly and legally completed as at the Latest Practicable Date. As confirmed by Ms. Hu Jiaoyan, she held Tongsheng Lianmeng’s 100% equity interest on behalf of Yangguang United Media from December 1, 2012 and the fund for the share transfer of Tongsheng Lianmeng was provided by Mr. Huang Yongwei on behalf of Yangguang United Media. Ms. Hu Jiaoyan exercised her shareholder’s right under the instruction of Yangguang United Media. Yangguang United Media paid the fund for the above share transfer to Mr. Huang Yongwei on May 29, 2015. Ms. Cai Xueying and her associates are Independent Third Parties. Ms. Hu Jiaoyan is an employee of our Group. Our PRC legal advisors confirm that based on the above arrangement, Yangguang United Media was the beneficial owner of Tongsheng Lianmeng since December 2012 and the above arrangement is valid and legal under PRC laws and regulations. Tongsheng Lianmeng was principally engaged in infomercial marketing services.
Yangguang Shixian
Yangguang Shixian was established as a limited liability company in the PRC on October 29, 2012 with a registered and paid up capital of RMB1,000,000, 100% held by Ms. Huang Yuanyuan as the registered holder. As confirmed by Ms. Huang Yuanyuan, she held Yangguang Shixian’s 100% equity interest on behalf of Yangguang United Media from October 29, 2012 to December 1, 2012 and the paid up capital of Yangguang Shixian was provided by Mr. Huang Yongwei on behalf of Yangguang United Media. Ms. Huang Yuanyuan exercised her shareholder’s right under the instruction of Yangguang United Media. On December 1, 2012, Yangguang United Media and Ms. Huang Yuanyuan entered into a share transfer agreement, pursuant to which Ms. Huang Yuanyuan transferred her 100% equity interest in
Yangguang Shixian to Yangguang United Media at the consideration of RMB1,000,000 with reference to the then registered capital. Yangguang United Media paid the consideration to Ms. Huang Yuanyuan on September 12, 2013 for her onward repayment to Mr. Huang Yongwei. The change of registration in the Administration for Industry and Commerce for the share transfer was completed on December 31, 2012. After completion of such transfer, Yangguang Shixian was owned as to 100% by Yangguang United Media. Ms. Huang Yuanyuan is the younger sister of Mr. Huang Yongwei and an employee of our Group. Our PRC legal advisors have confirmed that the above share transfer has been properly and legally completed as at the Latest Practicable Date. Yangguang Shixian was principally engaged in infomercial marketing services.
Hechuang Huihuang
Hechuang Huihuang was established as a limited liability company in the PRC on November 6, 2012 with a registered and paid up capital of RMB1,000,000, 100% held by Ms. Chen Zhen as the registered holder. As confirmed by Ms. Chen Zhen, she held Hechuang Huihuang’s 100% equity interest on behalf of Yangguang United Media from November 6, 2012 (being the date of incorporation of Hechuang Huihuang) to November 28, 2012 and the paid up capital of Hechuang Huihuang was provided by Mr. Huang Yongwei on behalf of Yangguang United Media. Ms. Chen Zhen exercised her shareholder’s right under the instruction of Yangguang United Media. On November 28, 2012, Yangguang United Media and Ms. Chen Zhen entered into a share transfer agreement, pursuant to which Ms. Chen Zhen transferred her 100% equity interest in Hechuang Huihuang to Yangguang United Media at the consideration of RMB1,000,000 with reference to the then registered capital. Yangguang United Media paid the consideration to Ms. Chen Zhen on September 30, 2013 for her onward repayment to Mr. Huang Yongwei. The change of registration in the Administration for Industry and Commerce for the share transfer was completed on December 10, 2012. After completion of such transfer, Hechuang Huihuang was owned as to 100% by Yangguang United Media. Ms. Chen Zhen is an employee of our Group. Our PRC legal advisors have confirmed that the above share transfer has been property and legally completed as at the Latest Practicable Date. Hechuang Huihuang was principally engaged in infomercial marketing services. Reasons behind the entrustment arrangements of Gongchuang Shuangying, Tongsheng Lianmeng, Yangguang Shixian and Hechuang Huihuang
On December 1, 2012, Mr. Huang Yongwei transferred 5% interest of Yangguang United Media to Ms. Huang Tingting. Before that, Yangguang United Media had only one shareholder, and by virtue of the then effective PRC Company Law, a one-person company with limited liabilities established by a natural person shall not establish another one-person company. Accordingly, Yangguang United Media entrusted Mr. Bian Zhijie, Ms. Hu Jiaoyan, Ms. Huang Yuanyuan and Ms. Chen Zhen to hold the interest of Gongchuang Shuangying, Tongsheng Lianmeng, Yangguang Shixian and Hechuang Huihuang on its behalf.
Yangguang Zongheng
Yangguang Zongheng was established as a limited liability company in the PRC on March 28, 2013 with a registered and paid up capital of RMB10,000,000. Since the establishment of Yangguang Zongheng, it has been a wholly-owned subsidiary of Yangguang United Media. Yangguang Zongheng was principally engaged in branding advertising services.
Tianjin Guosheng
Tianjin Guosheng was established as a limited liability company in the PRC on July 22, 2014 with a registered capital of RMB2,000,000 which was paid up on July 31, 2014. Since the establishment of Tianjin Guosheng, it has been a wholly-owned subsidiary of Yangguang United Media. Tianjin Guosheng was principally engaged in franchise promotion services.
Tianjin Guoxuan
Tianjin Guoxuan was established as a limited liability company in the PRC on August 6, 2014 with a registered capital of RMB10,000,000 which was paid up on December 30, 2014. Since the establishment of Tianjin Guoxuan, it has been a wholly-owned subsidiary of Yangguang United Media. Tianjin Guoxuan was principally engaged in TV home shopping business.
As Yangguang United Media had been in good cooperation relationship with the founders of Tianjin Meisheng Meijia and intended to further strengthen the cooperation, Yangguang United Media and Tianjin Meisheng Meijia entered into a share transfer agreement on March 6, 2015, pursuant to which Yangguang United Media transferred its 49% equity interest in Tianjin Guoxuan to Tianjin Meisheng Meijia at the consideration of RMB4,715,466, which was determined based on the appraised value of the subject equity interest, and the consideration has been settled as at April 9, 2015. The change of registration in the Administration for Industry and Commerce for the share transfer was completed on April 30, 2015. Our PRC legal advisors have confirmed that the share transfer above has been properly and legally completed as at the Latest Practicable Date.