Material Information

2020-08-13

YFY Inc. announces the Board's resolutions to consolidate two subsidiaries YFY Paradigm Investment Co., Ltd. and Lotus Ecoscings & Engineering Co., Ltd.

1.Type of merger and acquisition (e.g.merger, spin-off, acquisition,
or share transfer):Consolidation.
2.Date of occurrence of the event:2020/08/13
3.Names of companies participating in the merger and acquisition (e.g., name
of the other company participating in the merger, newly established company
in a spin-off, acquired company, or company whose shares are transferred):
Surviving company: YFY Paradigm Investment Co., Ltd. (hereinafter referred
to as “YFY Paradigm”)
Dissolved company: Lotus Ecoscings & Engineering Co., Ltd. (hereinafter
referred to as “Lotus E&E”)
4.Trading counterparty (e.g., name of the other company participating in the
merger, company spinning off, or trading counterparty to the acquisition or
share transfer):
Surviving company: YFY Paradigm
Dissolved company: Lotus E&E
5.Whether the counterparty of the current transaction is a related party:Yes.
6.Relationship between the trading counterparty and the Company (investee
company in which the Company has re-invested and has shareholding of XX%),
explanation of the reasons for the decision to acquire from or transfer
shares to an affiliated enterprise or related party, and whether it will
affect shareholders’ equity:
YFY Paradigm and Lotus E&E are both 100% owned subsidiaries by YFY Inc.
The consolidation of two companies are classified as reorganization within
the group, and it doesn't affect shareholders' equity.
7.Purpose of the merger and acquisition:
In order to improve management efficiency, the consolidation of two
companies would integrate resources and reduce operating costs.
8.Anticipated benefits of the merger and acquisition:
To enhance management efficiency of the Company.
9.Effect of the merger and acquisition on net worth per share and earnings
per share:None.
10.Share exchange ratio and calculation assumptions:
(1) The share exchange ratio is determined to be one common stock of Lotus
E&E for 0.83402014 new issuance shares of YFY Paradigm.
(2) Calculation of the share exchange ratio is based on the financial
statements on 2020/07/31.
11.Whether the CPA, lawyer or securities underwriter issued an unreasonable
opinion regarding the transaction: Not applicable.
12.Name of accounting, law or securities firm: Not applicable.
13.Name of CPA or lawyer: Not applicable.
14.Practice certificate number of the CPA: Not applicable.
15.Estimated date of completion:
The record day of the consolidation is 2020/10/07
16.Matters related to the assumption of corporate rights and obligations of
the dissolving company (or spin-off) by the existing or newly-established
company:
After the consolidation is effected, the accounting books, assets,
liabilities and all rights and obligations of Lotus E&E for (dissolved
Company) that are still valid as of the date of the consolidation will be
assumed generally endorsed by YFY Paradigm (surviving company).
17.Basic information of companies participating in the merger:
YFY Paradigm (surviving company): Investment.
Lotus E&E (dissolved Company): Procurement, design, manufacturing, sales
or other activities of engineering-related materials and equipment.
18.Matters related to the spin-off (including estimated value of the
business and assets planned to be transferred to the existing company or new
company.The total number of shares to be acquired by the spun-off company
or its shareholders, and their respective types and no.Matters related to
the reduction, if any, in capital of the spun-off company)(note: not
applicable for announcements unrelated to spin-offs):Not applicable.
19.Conditions and restrictions for future transfer of shares resulting from
the merger and acquisition:None.
20.Other important terms and conditions:None.
21.Any objections from directors to the transaction:None.
22.Whether the transaction involved in change of business model:None.
23.Details on change of business model:Not applicable.
24.Details on transactions with the counterparty for the past year and the
expected coming year:None.
25.Source of funds:New shares to be issued by YFY Paradigm.
26.Any other matters that need to be specified:None.