SAN MATEO, CA–(Marketwired – Mar 14, 2016) – Armco Metals Holdings, Inc. (“Armco Metals ” or “the Company”) (NYSE MKT: AMCO), a distributor of imported metal ores and a steel recycler in China, today announced that the first shareholders’ meeting of Shanghai Meng Yi Network Technology Co., Ltd.(“Meng Yi”) was held on March 1, 2016 in Shanghai.
As disclosed previously, Meng Yi is the operating entity for the OTO (Online to Offline) platform established for steel scrap and other commodities trading businesses, which Armco Metals owned 34.3% interest and three other shareholders held 21.9% interest each. So far, Meng Yi has registered and created a website, www.ezhangyu.com, that is still under construction.
According to the resolution of the shareholder meeting, the ownership and capital structure of Meng Yi has been changed. Specifically, after the change, for a total share of 10 million par value determined at CNY 1 per share (“approximately $0.15 per share’), Armco Metals Shanghai subscribes 3 million shares and will own 30% interest, Mr. Kexuan Yao, CEO and Chairman of Armco Metals subscribes 1 million shares and will own 10% interest, and the other three non-affiliated shareholders subscribe 2 million, 2 million and 1 million shares and will own 20%, 20% and 10% interest, respectively. 1 million incentive shares plan was also set up and reserved for Meng Yi’s management upon shareholder meeting. All the subscriptions will be contributed with cash at price CNY 1.11 (“approximately $0.17”) per share.
The subscription contribution should be made before or on September 30, 2016. Mr. Kexuan Yao, Chairman & CEO of Armco metals, will serve as Chairman of Mengyi.
All the shareholders are given options with CNY 2($0.3) per share valid for three years, and board of directors are authorized to grant shares to the management by totally 1 million with CNY 0 per share, 1 million options with CNY 1.5 per share and 2 million options with CNY 3 per share, valid for three years and should be exercised before any investment from new investors or going public.
“As e-commerce has been developing quickly in China and China government is encouraging and promoting the application of internet technology in traditional business, management is pleased with the progress of our OTO platform building which is the application and implementation of e-commerce strategy in our business. Currently, and in the short term, it provides a match and complements our business; for the long term. Creating the OTO platform is an important strategic development which could lead the business transition for the Company from solely selling steel scrap products in traditional methods to providing services through the online platform. Mengyi is setting the rules, matchmaking transactions and acting as intermediary between the suppliers and the customers. Products exchanging on the OTO platform including iron ore, coal, steel scrap and steel products etc.” Commenting on the announcement, Kexuan Yao, Chairman and CEO of Armco Metals Holdings, stated, “Low financing capacity and slow capital turnover are major industry deficiencies and difficult quality control hinder the development of the industry. The OTO platform integrates strategic positioning supplying, distributing, financing and commodities exchange which covers all steel industrial chain, by which achieving conversion from the vertical value chain of self mode to the platform service mode. Once the platform grows to certain scale, we believe the greater sales revenue and profit for our steel and trading business could be expected.”
ABOUT ARMCO METALS HOLDINGS, INC.
Armco Metals Holdings, Inc. is engaged in the sale and distribution of metal ore and non-ferrous metals, wood, and barley throughout China and is in the recycling business in China. Armco Metals’ customers include some of the fastest growing steel producing mills and foundries throughout China. Raw materials are acquired from a global group of suppliers located in various countries, including, but not limited to, Brazil, India, Indonesia, Ukraine and the United States. Armco Metals’ product lines include ferrous and non-ferrous ore, iron ore, chrome ore, nickel ore, magnesium, copper ore, manganese ore, steel billet, recycled scrap metals, raw wood and barley. For more information about Armco Metals, please visit www.armcometals.com.
SAFE HARBOR STATEMENT
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). In connection with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Armco Metals Holdings, Inc., is hereby providing cautionary statements identifying certain important factors that could cause our actual results to differ materially from those projected in forward-looking statements. Any statements that are not historical facts and that express, or involve discussions as to, expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, indicated through the use of words or phrases such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “intends,” “plans,” “believes” and “projects”) are forward-looking and involve estimates and uncertainties which could cause actual results to differ materially from those expressed in the forward-looking statements. These statements include, but are not limited to, our expectations regarding the expected benefits of the corporate restructure, the ability to benefit from the changes in the tax laws in the PRC, our net revenues and production related to our scrap metal recycling operations, including our ability to operate the facility efficiently and profitability, the sufficiency of our working capital, pricing and volatile demand for our product lines, the extent of government imposed energy and monetary policy restrictions and resulting blackouts and associated impact on our trading and recycling operations. We caution that investors should not place undue reliance on any forward-looking statements herein. Further, any forward-looking statement speaks only as of the date on which such statement is made. We qualify all of our forward-looking statements in this press release by these cautionary statements including those made in Part I. Item 1A. Risk Factors appearing in our Annual Report on Form 10-K for the year ended December 31, 2014 and our other filings with the Securities and Exchange Commission. New risk factors emerge from time to time and it is not possible for our management to predict all risk factors, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. Except for our ongoing obligations to disclose material information under the Federal securities laws, we undertake no obligation to release publicly any revisions to any forward-looking statements, to report events or to report the occurrence of unanticipated events.
Link back to original article on NuziNet.com
Link back to Armco Metals Holdings, Inc. on NuziNet.com