Big Data Group plans to list on Nasdaq. The China Securities Regulatory Commission requires an explanation on the compliance of the return journey and mergers and acquisitions.

Zhitong
2024.02.23 11:22

Big Data Group plans to list on the Nasdaq. The China Securities Regulatory Commission has requested further clarification on the compliance of its equity structure and the legality of its return and acquisition mergers. Big Data Group has submitted materials for overseas issuance and listing, planning to issue no more than 2,300,000 common shares. The Commission requires Big Data Group to provide additional details on the compliance of its equity structure, return and acquisition mergers, as well as its main business operations. Domestic operating entities like Xiamen Kuangshi Alliance are involved in advertising production, internet information services, etc., and need to clarify whether they are actually engaged in these activities and have obtained the necessary qualifications and licenses. Xiamen Jiuzi Purple Technology Co., Ltd. has acquired all the equity of Xiamen Kuangshi Alliance, and must explain the tax payment situation. Additionally, it is necessary to explain the relevant regulatory procedures involved in setting up offshore structures and return investments overseas.

Zhitong App learned that on February 23, the China Securities Regulatory Commission announced the requirements for supplementary materials for overseas issuance and listing filing (February 2, 2024 - February 22, 2024). It was mentioned in the disclosure that Big Data Group (which has already obtained a filing notice) needs to provide additional explanations on the compliance of its equity structure construction and reverse mergers. Recently, Big Data Group's overseas issuance and listing filing materials submitted by its domestic operating entity, Xiamen Kuangshi Alliance Network Technology Co., Ltd., have been received by the CSRC. The company plans to issue no more than 2,300,000 common shares and list on the NASDAQ Stock Exchange in the United States.

Specifically, the CSRC disclosure pointed out that Big Data Group is required to provide supplementary explanations on the following matters and have lawyers verify and provide clear legal opinions:

  1. Regarding the compliance of the equity structure construction and reverse mergers:

    • On April 21, 2021, Wang Huiqin, a Taiwanese national, subscribed to 4.4% of the equity of Xiamen Kuangshi Alliance Network Technology Co., Ltd. through capital increase. Please explain whether this complies with the relevant provisions of the "Regulations on the Acquisition of Domestic Enterprises by Foreign Investors" regarding the acquisition of domestic enterprises by capital increase.
    • On September 28, 2023, Xiamen Jiuzi Purple Technology Co., Ltd. acquired all the equity of Xiamen Kuangshi Alliance at zero cost. Please explain the tax payment situation.
    • Conclusive opinions on the legality and compliance of offshore structure construction and reverse investments involving foreign exchange registration, overseas investment, foreign investment, tax payment, and other regulatory procedures.
    • Specific situation of the shareholder Accel Partners Group Ltd's upstream penetration.

  2. Regarding the main business situation:

    • The operating scope of domestic entities such as Xiamen Kuangshi Alliance includes advertising production, advertising distribution, internet information services, online cultural operations, data processing and storage support services, which may involve areas restricted or prohibited for foreign investment. Please explain whether the company is actually engaged in the above-mentioned businesses and whether it has obtained the corresponding qualifications and licenses.
    • Major contracts of Xiamen Xinqianhui Network Technology Co., Ltd. and Xiamen Qingxiangxing Network Technology Co., Ltd. include "Data Analysis Processing Service Agreement" and "Data Analysis and Promotion Service Framework Contract," mainly involving medical big data mining, data comparison and verification. Please explain the specific situation of data collection, storage, and use.

  3. Regarding the situation of domestic operating entities:

    • Xiamen Kuangshi Alliance is involved in a copyright dispute lawsuit with an amount of 8 million yuan. Please explain the progress of the case and the reason why Shanghai Jianwan Network Technology Co., Ltd. has committed to pay the relevant amount on behalf of Xiamen Kuangshi Alliance.
    • Conclusive opinions on the legality and compliance of all previous equity changes of the main domestic operating entities.

  4. Regarding the current issuance and listing plan, please explain the number of shares to be issued, the percentage of total share capital after issuance, the expected amount of funds to be raised (if any), and list the changes in the equity structure before and after the issuance.

It is understood that Xiamen Kuangshi Alliance Network Technology Co., Ltd. was established in December 2015, with business scope including technology promotion and application services, software development, and information technology consulting services. Kuangshi Alliance, as introduced on its official website, is dedicated to mobile advertising promotion business, positioning itself as a "big data AI intelligent advertising delivery service provider" and a developer of "simulation management and development" games. Currently, the company has accumulated over 200,000 corporate clients, with typical clients including Tencent, Huawei, NetEase, Bilibili, Ailiao, Vipshop, BOSS Zhipin, and others.

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