TORONTO, ON--(Marketwired - March 15, 2017) - Internet of Things Inc. (TSX VENTURE: ITT) ("IoT Inc." or the "Company") an IoT software and solutions provider, announced today that it has signed a Letter of Intent to form a joint venture partnership with New Hope Data Technology Co., Ltd. a New Hope Group (collectively "New Hope") affiliated and invested company. New Hope is one of China's largest privately-owned enterprises and in the Top 500 Enterprises for 14 consecutive years. With more than 600 subsidiaries and nearly 70,000 employees and annual revenues of nearly 80 Billion Yuan or $15.5 Billion, New Hope is involved in a wide range of sectors, from agriculture and real estate to infrastructure, chemical engineering, finance and insurance.
The partnership will position IoT Inc. to sell Internet of Things ("IoT") solutions and services to New Hope's network of factories and businesses, in addition to other customers across mainland China. New Hope aims to use Industrial IoT technologies to improve the operational efficiency and transparency of New Hope owned factories as well as other manufacturing facilities in China.
"This is a great opportunity to transform and modernize New Hope's expansive network of more than 600 businesses across China with measurable and effective IoT solutions," said IoT Inc. CEO Michael Frank. "We are now on our way to implementing IoT Inc.'s strategy to enter the vast and profitable marketplace across China, which needs industrial IoT solutions."
Chinese industries are rapidly modernizing to remain competitive globally. Broad adoption of IoT technologies to improve industrial efficiency could produce cumulative growth for China's GDP of US$1.8 Trillion by 2030, analysts from Accenture recently reported.
New Hope will hold a 49% interest in the new joint venture and will invest initially $2 Million as an operating and working capital loan while IoT Inc. will hold a 51% interest. Initially, upon signing the definitive joint venture agreements, New Hope will also invest $300,000 by way of a convertible debenture into IoT Inc. for general corporate purposes.
As consideration for New Hope entering into a joint venture partnership and providing priority for all IoT products and services to be provided by the joint venture for its more than 600 group companies, IoT Inc. will issue 28 million common shares to New Hope. These shares will be subject to performance milestones based upon the joint venture generating $3.5 million in aggregate net income over the first three years with annual releases from escrow as milestones are achieved. Revenues over the three-year term are expected to be in the $20 to $30 million range.