XcelMobility Inc. (OTCMKTS:XCLL) Files An 8-K Termination of a Material Definitive Agreement
Item 1.02. Termination of Material Definitive Agreement.
On May 19, 2017, the Board of Directors (the Board) of
XcelMobility Inc. (the Company) unanimously approved the
termination of the legal relations and contractual agreements to
which the Company, through its wholly-owned subsidiary, Shenzhen
CC Power Investment Consulting Co. Ltd. (CC Investment), acquired
contractual control over the business operations and affairs of
Shenzhen CC Power Corporation, a company organized under the laws
of the Peoples Republic of China (CC Power).
On August 22, 2011, CC Investment entered into the following
contractual agreements with CC Power and Xili Wang, the sole
shareholder of CC Power at the time and a former executive
officer of the Company: (1) an Entrusted Management Service
Agreement, to which CC Investment agreed to provide, and CC Power
agreed to accept, exclusive management services for the business
and operations of CC Power, (2) a Technical Services Agreement,
to which CC Investment agreed to provide, and CC Power agreed to
accept, exclusive technical services for the business and
operations of CC Power, (3) an Exclusive Purchase Option
Agreement, to which Ms. Wang granted CC Investment an irrevocable
and exclusive option to purchase the equity and/or assets of CC
Power for nominal consideration, (4) a Loan Agreement, to which
CC Investment agreed to lend 10,000,000 RMB to Ms. Wang to use
solely for the business and operations of CC Power, and (5) an
Equity Pledge Agreement, to which Ms. Wang pledged all the equity
interests in CC Power to guarantee the obligations of Ms. Wang
and CC Power (and the rights and benefits of CC Investment) under
the Entrusted Management Service Agreement, the Technical
Services Agreement, the Exclusive Purchase Option Agreement and
the Loan Agreement.
On August 25, 2016, Zhixiong Wei, the Chairman of the Board and
Chief Executive Officer of the Company, acquired 100% of the
equity interest in CC Power from Xili Wang to an Agreement on
Equity Transfer. In connection with the change in ownership of CC
Power, CC Investment entered into a new set of controlling
agreements with CC Power and Mr. Wei, as the sole shareholder of
CC Power, including an Entrusted Management Service Agreement, a
Technical Services Agreement, an Exclusive Purchase Option
Agreement, a Loan Agreement, and an Equity Pledge Agreement, on
substantially the same terms and conditions set forth in the
original controlling agreements. to an Assignment and Novation
Agreement dated August 25, 2016, by and among CC Power, CC
Investment, Ms. Wang and Mr. Wei, the parties acknowledged that
the new CC Power controlling agreements replaced the original
controlling agreements in their entirety, meaning that as of
August 25, 2016, Ms. Wang assigned to Mr. Wei all of her rights
as the CC Power shareholder under the controlling agreements, and
Mr. Wei assumed all of the obligations of the CC Power
shareholder under such agreements. As a result of the Assignment
and Novation Agreement, the original controlling agreements were
terminated and replaced in their entirety by the new set of
controlling agreements among CC Investment, CC Power and Mr. Wei.
The Boards decision to terminate the controlling agreements and
legal relations among CC Investment, CC Power, and Ms. Wang and
Mr. Wei, as the former and current shareholders of CC Power, was
a result of CC Powers continuing operational losses and lack of
working capital to maintain and grow its business. As a result of
the Boards decision, the Company will no longer have contractual
control over, or legal relations with, CC Power. Mr. Wei, as the
sole shareholder of CC Power, will have control over the business
and affairs of CC Power, and will be solely responsible for
determining whether to maintain or terminate the business and
operations of CC Power, including any related expenses. In
connection with the termination of these agreements, the parties
have agreed that all outstanding loans and obligations among the
Company, its subsidiaries, CC Power, Mr. Wei and Ms. Wang have
been waived, and that no party will make any claim against any
other party for any amount owed under the 2011 controlling
agreements or the 2016 controlling agreements.
SECTION 8 OTHER EVENTS
Item 8.01. Other Events.
Termination of Subsidiaries Business
On May 19, 2017, in connection with the decision to terminate the
contractual agreements and relationship between CC Investment and
CC Power, the Board unanimously decided to terminate the business
and operations of the Companys two wholly-owned subsidiaries, CC
Mobility Limited, a limited liability company organized under the
laws of Hong Kong (CC Mobility), and CC Investment, a limited
liability company organized under the laws of the Peoples
Republic of China.
The Boards decision was a result of the unpredictability of the
online lottery authorization from Chinas Ministry of Finance, as
well as the continued operational losses and lack of working
capital of CC Power, the main operating entity under the
contractual control of CC Investment (as described in Item 1.02
above). In connection with the Boards decision, the Board and Mr.
Renyan Ge, a member of the Board and former executive officer of
the Company, agreed that Mr. Ge will be solely responsible for
undertaking the termination of the business and operations of CC
Mobility and CC Investment, including all related expenses.
About XcelMobility Inc. (OTCMKTS:XCLL)
XcelMobility Inc. (Xcel) is engaged in lottery business, which aggregates and processes lottery purchase orders, deriving revenue from service fees paid by local sports lottery administration centers for the purchase orders of sports lottery products directed to such centers. The Company offers a suite of online lottery services in China. It has developed an integrated fulfillment platform that enables it to service and support multi- provincial contracts for the fulfillment of welfare and sports lottery tickets through a single interface. Its mobile platform enables it to deliver white-label mobile application solutions to interested companies seeking to leverage their client bases. The mobile platform allows users to connect through its mobile cloud network. Its services include Individual Lottery Purchase, Lottery Pool Purchase, Automatic Tag-along Purchase and Recurring Purchase. It provides online purchase services for sports lottery products and welfare lottery products. XcelMobility Inc. (OTCMKTS:XCLL) Recent Trading Information
XcelMobility Inc. (OTCMKTS:XCLL) closed its last trading session down -0.00020 at 0.00060 with shares trading hands.