Cango receives letter of intent from EWCL, forms special committee

Cango (CANG) announced that its board of directors recently received a preliminary non-binding letter of intent from Enduring Wealth Capital expressing its non-binding intent to obtain control of the company through the following proposed transactions: EWCL proposes to acquire 10,000,000 Class B ordinary shares of the company from the company’s co-founders, Xiaojun Zhang and Jiayuan Lin at a purchase price in cash to be agreed among the parties, the company is proposed to take necessary corporate actions to ensure that the shares to be acquired by EWCL will continue to be entitled to 20 votes per share, the founders are proposed to voluntarily convert all of the remaining Class B ordinary shares held by them into Class A ordinary shares with one vote per share and to resign from the board and all senior management positions at the company, and the board and management team of the company are proposed to be restructured in such manner as requested by EWCL. EWCL also proposed that the company should dispose of its existing business in the PRC, and EWCL would introduce a potential buyer, to facilitate the growth of the company’s business outside China, in particular, the company’s new crypto mining business, and should make a filing with the China Securities Regulatory Commission for the termination of the company’s status as a “China Concept Stock” subject to CSRC’s jurisdiction. The transactions proposed in the letter of intent are collectively referred to as the “proposed transactions.” According to the letter of intent and information provided by EWCL, Andrea Dal Mas, Peng Yu and Anggun Mulia Fortunata are the directors of EWCL; Dal Mas and Yu are the key decision makers of EWCL in connection with the proposed transactions; Dal Mas has vast experiences in and deep knowledge of the blockchain ecosystem, as well as bitcoin and other crypto-related investments; and Yu is a finance professional with extensive experience in investment management and asset management. On March 14, the board resolved to form a special committee consisting of its three independent directors, Chi Ming Lee, Dongsheng Zhou and Rong Liu, to assess and consider the letter of intent and the proposed transactions and, if the special committee decides to pursue any of the potential transactions, to negotiate the terms and conditions thereof. The special committee is expected to retain independent legal and financial advisors in due course to assist it in evaluating the proposed transactions. The board cautions the company’s shareholders and others considering trading the company’s securities that the board has not had an opportunity to carefully review or evaluate the proposals set forth in the letter of intent or perform sufficient due diligence on EWCL and its directors, or make any decision with respect to the company’s response to the proposals. There can be no assurance that any definitive action will be taken, that any definitive agreement will be executed relating to the proposed transactions, or that these or any other transactions will be approved or consummated. The company does not undertake any obligation to provide any updates with respect to these or any other transactions, except as required under applicable law.