Loctek Ergonomic Technology Corp(300729) : Announcement on the sale of some overseas warehouses by overseas subsidiaries

Securities code: Loctek Ergonomic Technology Corp(300729) securities abbreviation: Loctek Ergonomic Technology Corp(300729) Announcement No.: 2022011 bond Code: 123072 bond abbreviation: lege convertible bond

Loctek Ergonomic Technology Corp(300729)

Announcement on the sale of some overseas warehouses by overseas subsidiaries

The company and all members of the board of directors guarantee that the information disclosed is true, accurate and complete without false records, misleading statements or major omissions.

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1151commerce, LLC, an overseas subsidiary of Loctek Ergonomic Technology Corp(300729) (hereinafter referred to as “the company”), intends to sell its 1151 commerce Blvd. Located in New Jersey, USA, to Cabot industrial value fund VI operating partner ship, L.P, Overseas warehouse of Logan Town, New Jersey (block 2803, lot 1.02)

This transaction does not constitute a connected transaction.

This transaction has been deliberated and approved at the 38th meeting of the Fourth Board of directors of the company and does not need to be submitted to the general meeting of shareholders of the company for deliberation.

There is still a 30 day due diligence period after the buyer and the seller sign the sales agreement, and there is still some uncertainty about the delivery of the underlying assets.

1、 Transaction overview

From 2013 to 2020, lege purchased seven overseas warehouses in the core hub port area of the United States, and from early 2019 to 2020, began to systematically plan and fully promote the innovative service complex project of lege’s cross-border e-commerce public overseas warehouse. The project has developed well since its opening. By the end of 2021, in addition to the overseas warehouses and rental warehouses purchased by itself in the core hub port area of the United States, Lego also has overseas warehouses in Germany, Japan and other places, with a total of 15 warehouses worldwide, with a delivered area of 260000 square meters. In the first half of 2021, lege cross-border e-commerce public overseas warehouse innovation service complex project achieved an operating revenue of 681102 million yuan and a good profit.

Overseas warehouse is a necessary infrastructure for carrying out cross-border e-commerce, especially for medium and large products, for multi-channel operation and independent channel station operation, and for supporting small and medium-sized enterprise brands to go to sea. In order to adapt to the further development trend of cross-border e-commerce, improve the operation efficiency of warehouses and increase the output per unit area, the company “combines small warehouses and builds large warehouses” to reduce the fixed input loss of multi place and small-area warehouses, so as to reduce the operation cost of overseas warehouse clusters, optimize the capital structure, improve the management efficiency and meet the needs of more small and medium-sized foreign trade enterprises for overseas warehousing and logistics. In September 2021, the company leased 500000 square feet of large warehouse in Pennsylvania, east of the United States, and completed the “transfer from small warehouse to large warehouse” in the same area. Therefore, the company agreed to sell 1151 commerce Blvd., New Jersey, Logan Town, New Jersey (block 2803, lot 1.02) has an overseas warehouse with a construction area of about 95872 square feet (hereinafter referred to as the “underlying asset”). The funds obtained from the sale of the underlying assets will be used to lease and build a larger area of overseas warehouses, further improve the company’s overseas warehousing and logistics system, and deepen the scale operation barriers of the company’s cross-border e-commerce public overseas warehouse innovation service complex project.

Loctek Ergonomic Technology Corp(300729) at the 38th meeting of the 4th board of directors held on February 25, 2022, the proposal on approving overseas subsidiaries to sell some overseas warehouses was deliberated and adopted. 1151 commerce, LLC, a subsidiary of the company, intends to be located in 1151 commerce Blvd., New Jersey, The overseas warehouse of logantownship, New Jersey (block 2803, lot 1.02) is for sale. The transaction price of this asset transaction is determined to be US $23 million through negotiation.

This transaction does not constitute a connected transaction, nor does it constitute a major asset reorganization stipulated in the administrative measures for major asset reorganization of listed companies. The subject assets sold this time are within the approval authority of the board of directors of the company and do not need to be submitted to the general meeting of shareholders for deliberation.

2、 Introduction of counterparty

(I) basic information

1. Name: Cabot industrial value fund VI operating partner ship, L.P

2. Nature: foreign limited partnership

3. Main business: real estate development

4. Date of establishment: August 20, 2019

(II) Cabot industrial value fund VI operating partner ship, L.P. is not associated with the company.

(III) as of the disclosure date of this announcement, Cabot industrial value fund VI operating

Partner ship, L.P. is not listed as a dishonest executee.

3、 Basic information of transaction object

Underlying assets: the company’s subsidiary intends to sell 1151 commerce Blvd., New Jersey, The building area of Jersey, new town, is 872 square feet.

Up to now, the original value of the above subject assets is 1247018666 US dollars. By the end of January 2022, the depreciation has been accrued to 23035207 US dollars, with a net value of 1223983459 US dollars. There are no major matters such as pledge, mortgage, litigation, arbitration or judicial enforcement involving the asset, or other matters that hinder the transfer of ownership.

4、 Main contents of the transaction agreement

(I) contract subject

Seller: 1151 commerce, LLC

Buyer: Cabot industrial value fund VI operating partner ship, L.P. (Ⅱ) transaction amount

Through negotiation between the buyer and the seller, the total transaction consideration of the subject asset is US $23 million.

(III) pricing policy and basis

The price shall be negotiated and determined by our entrusted agent and local lawyer, the seller’s agent and the buyer and the seller.

(IV) payment arrangement

1. Deposit: the buyer shall pay 500000 US dollars within 3 days after signing this Agreement;

2. Balance payment: the balance payment shall be paid after the end of the buyer’s due diligence period (within 30 days after signing the contract).

5、 Other arrangements involving sale

The sale of assets does not involve personnel resettlement and land leasing, and there is no related party transaction after the completion of the transaction.

6、 Opinions of independent directors

1. 1151 commerce, LLC, an overseas subsidiary, transfers its 1151 commerce Blvd. In New Jersey to Cabot industrial value fund operating partner ship, L.P, The overseas warehouse of logantownship, New Jersey (block 2803, lot 1.02) is conducive to maximizing the interests of the company. The pricing is fair and reasonable, in line with business logic and general market conditions, and there is no damage to the interests of the company and shareholders, especially small and medium-sized shareholders.

2. This overseas warehouse sale does not involve related party transactions and does not constitute a major asset reorganization specified in the administrative measures for major asset reorganization of listed companies. The deliberation and voting procedures of the board of directors of the company are legal and compliant.

In conclusion, the independent directors believe that this transaction complies with the company law of the people’s Republic of China, the securities law of the people’s Republic of China and other relevant laws, regulations, normative documents and the articles of association, and is in line with the interests of the company and all shareholders. There is no harm to the interests of minority shareholders. The independent directors agree to this transaction.

7、 The purpose of selling the overseas warehouse and its impact on the company

The sale of overseas warehouses is mainly for subsequent leasing and self construction of larger overseas warehouses, further improve the company’s overseas warehousing and logistics system, and deepen the barriers of the company’s cross-border e-commerce public overseas warehouse innovation service complex project. The sale of the underlying assets is based on the company’s overall strategic planning and overseas warehouse layout, which will not affect the company’s business development and sustainable profitability, nor bring risks to the company; It is conducive to improve the operation efficiency of the warehouse, increase the output per unit area, reduce the loss of fixed input of multiple warehouses, and then reduce the operation cost of overseas warehouses, optimize the capital structure and improve the management efficiency. The proceeds from the sale of assets will be deposited into the custody account for the funds required for the subsequent self construction of large-scale overseas warehouses, which will have a positive impact on the financial situation of the company. According to the company’s calculation, if the asset transfer is completed, the company’s current pre tax asset transfer income will be increased by about US $10.76 million.

8、 Documents for future reference

1. Resolutions of the 38th meeting of the 4th board of directors;

2. Independent opinions of independent directors on matters related to the 38th meeting of the Fourth Board of directors of the company; 3. Sales contract.

Loctek Ergonomic Technology Corp(300729) board of directors February 27, 2022

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