Embracing Future Holdings Limited Announces Major Milestone in Shenzhen Xiaozhao Acquisition

Key Highlights

• NPAT Target Substantially Exceeded: Shenzhen Xiaozhao Network Technology Co., Ltd, now an indirect wholly-owned subsidiary of Embracing Future Holdings Limited (formerly Biolidics Limited), has reported a Net Profit After Tax (NPAT) of approximately RMB 1.91 million for the 12-month Earn-Out Period from 22 October 2024 to 21 October 2025.
• Earn-Out Target Surpassed by 154.7%: The NPAT target for the Earn-Out Period was RMB 0.75 million. The reported NPAT represents a surplus of around RMB 1.16 million, far exceeding expectations.
• Special Audit Confirmation: The NPAT achievement was verified by an external auditor appointed by the Company, ensuring transparency and credibility of the reported results.
• Release of Earn-Out Consideration Shares: Following the successful achievement of the NPAT target, 135,600,000 Earn-Out Consideration Shares, which were held in escrow, will be released to the Vendor’s Nominees, Mr. Yuan and Mr. Wu, as stipulated in the Sale and Purchase Agreement (SPA).
• Strong Financial Performance: This significant overachievement demonstrates robust operational performance by the newly acquired subsidiary, suggesting positive future prospects for the Group.

Implications for Shareholders

• Potential Share Price Impact: The substantial outperformance of the NPAT target and the release of a large block of Earn-Out Consideration Shares are noteworthy events. This milestone may positively influence investor sentiment and potentially drive share price appreciation, given the demonstrated profitability and successful execution of the acquisition’s earn-out mechanism.
• Share Dilution Considerations: With the release of 135,600,000 new shares to the Vendor’s Nominees, shareholders should be aware of potential dilution effects. The market may respond to the increased float and the entrance of new significant shareholders.
• Validation of Acquisition Strategy: The achievement of the earn-out target validates the Company’s acquisition rationale and may bolster confidence in the management’s growth strategy and execution capabilities.
• Transparency and Governance: The engagement of an external auditor to verify NPAT performance underscores the Group’s commitment to transparency and good governance, which is typically viewed favorably by institutional investors.

Detailed Report

Embracing Future Holdings Limited (Singapore Company Registration No. 200913076M), formerly known as Biolidics Limited, has reached a significant milestone in its strategic acquisition of Shenzhen Xiaozhao Network Technology Co., Ltd. The subsidiary’s financial performance over the earn-out period has been impressive, with reported NPAT of approximately RMB 1.91 million, significantly surpassing the earn-out target of RMB 0.75 million.

This achievement, representing a 154.7% surplus (about RMB 1.16 million above target), was confirmed by a special audit conducted by an external auditor appointed by the Company, adding credibility to the reported results. In accordance with the SPA, 135,600,000 Earn-Out Consideration Shares, previously held in escrow, will be released to the Vendor’s Nominees, Mr. Yuan and Mr. Wu.

This development marks a critical phase in the integration and growth strategy of Embracing Future Holdings Limited. The strong profit performance of the new subsidiary reinforces the Group’s acquisition strategy and signals robust earnings potential going forward. However, shareholders should be aware that the release of the Earn-Out Shares will increase the total number of shares outstanding, which could have dilution effects. The entrance of Mr. Yuan and Mr. Wu as significant shareholders may also influence future corporate decisions and governance.

The Board, led by Executive Director and Chairman Zhu Hua, has expressed confidence in the successful completion of this phase of the acquisition.

Conclusion

This announcement is a pivotal event for Embracing Future Holdings Limited. The substantial overachievement of NPAT targets and the release of escrowed shares are price-sensitive developments that could influence share price performance. Investors are encouraged to monitor trading activity and forthcoming disclosures related to the integration and future performance of Shenzhen Xiaozhao Network Technology Co., Ltd.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or an offer to buy or sell any securities. Investors should consult with their financial advisors and review official Company announcements and audited financial reports before making any investment decisions. Past performance is not indicative of future results.

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