Jiuzi Holdings, Inc. ( JZXN ) entered into a non-binding letter of intent to acquire Shenzhen Maigesong Electric Technology Co. The specific financial terms of the transaction were not disclosed. The deal has been signed by Jiuzi’s subsidiary Shenzhen Jiuzi New Energy Holding Group.

Pursuant to the terms of the LOI, Shenzhen Jiuzi will acquire 100% of the equity of Shenzhen Maigesong in exchange for certain restricted share compensation.

The company shall invest RMB30 million ($4.15 million) to fund the construction of Shenzhen Maigesong’s rechargeable lithium battery production line. 

This investment will be divided into two stages, with RMB 15 million to be invested by the end of April 2024 and another RMB 15 million by the end of November 2024.

The LOI includes an earnout provision which provides that Shenzhen Maigesong shall achieve a revenue target of RMB 119.81 million by the end of December 2025 and a revenue target of RMB 504.22 million by the end of December 2026. 

“Both parties will work together to achieve the revenue targets and promote the sustained development and growth of the enterprise,” per a press release.

Price Action: JZXN shares are trading higher by 10.9% to $4.16 on the last check Wednesday.