CCP Technologies secures funding from existing shareholders for new IoT operations in China
CCP Technologies is looking to establish a wholly-owned China operation with the support of its strategic partners.
Melbourne-based CCP Technologies (ASX: CT1) has inked a set of strategic agreements with three of its existing shareholders to help fund and grow its Internet of Things (IoT) technology in China.
The company secured the agreements following a $3.4 million capital raising in October, which was partially underwritten by the same shareholders.
The agreements will deepen their involvement with CCP at an equity and commercial level.
Shareholder Ray Malone has a proven track record of growing listed companies, most recently as executive chairman of AMA Group (ASX: AMA) and chair of Money3 Corporation (ASX: MNY).
Mr Malone has a strong network of commercial, financial and corporate contacts which CCP believes could add value to its growth.
Shareholders Xiaoniu Bao and Yi Zhang are senior executives involved in China’s environmental technology and utilities sectors.
The businessmen their time between Australia and China investing in companies they consider may offer solutions for their commercial networks in China.
Agreement structure
CCP said the strategic agreements – which were entered into separately – will feature a two-tranche share placement to each associate for a total 243 million shares at $0.007 each to raise approximately $1.7 million.
The first tranche of 120 million shares will be settled by year end.
CCP will initially allocate $1 million for the establishment of wholly-owned China operations, to be funded from the strategic placement.
In addition, each associate may collectively receive up to a maximum of 200 million shares at nil consideration (“consideration shares”) on the achievement of $15 million in cumulative revenue over the next two years.
The associates will receive 50% of their consideration shares on achievement of 66% of their respective allotments of the revenue target, being 42 million shares for Mr Malone and 61 million for Mr Bao and Mr Zhang.
The balance will be issued on achievement of the total revenue target.
Further funds
Chairman Leath Nicholson said the strategic agreements would help further the establishment of a wholly-owned China IoT operation.
“We are very excited to welcome the increased involvement of these existing supporters and their associates,” he said.
“Securing the involvement of incentivised, connected, experienced and invested strategic partners of this calibre is an important pillar of [our] overall growth strategy.”
At mid-afternoon, shares in CCP Technologies were up 20% to $0.018.