Mr. Ohad Haber reports
WATER WAYS ANNOUNCES THE LAUNCH OF A DISTRIBUTION SUBSIDIARY FOR THE HUGE CHINESE IRRIGATION MARKET
Water Ways Technologies Inc. has signed a non-binding letter of intent (LOI) with its Chinese agent and its Israeli agent to establish a new distribution subsidiary for the huge and growing Chinese irrigation market.
According to the terms of the non-binding LOI, Water Ways will together with the agent and the additional holder form a new Chinese subsidiary in which Water Ways will indirectly hold 51 per cent of the equity interest and the agent and the additional holders will together hold a 49-per-cent equity interest. Pursuant to the terms of the LOI the agent, who has been operating in the Chinese irrigation market for many years, will assign to subco: his exiting clients, existing orders and know-how and his existing skilled technical team (with the ability to carry out substantial irrigation projects). The agent will cease to be active in the Chinese irrigation market and will become the chief executive officer of subco pursuant to an employment agreement containing standard employment and non-competition clauses. The LOI also sets additional payment terms to the agent and the additional holder which will be finalized in the final agreement which is expected to be signed before the end of 2019. Completion of the transaction is subject to customary conditions and the approval of the TSX Venture Exchange.
Water Ways has been selling irrigation components to the Chinese markets through the agent's channels and project since 2013 with average annual sales of between $700,000 and $1-million. The agent's annual sales in China ranged between $2.5-million to $6-million.
Ohad Haber, president, chief executive officer and chairman of the board of Water Ways, commented: "We have been active in China for several years selling our precise irrigation technology to the Chinese irrigation market. China has many water pollution challenges and with the combination of our Israeli technology and our agent's know-how and contacts in China we expect to become a substantial player in delivering smart irrigation technologies to Chinese farmers."
About Water Ways Technologies Inc.
Water Ways Technologies is the parent company of Irri-Al-Tal, which is an Israeli-based agriculture technology company that specializes in providing water irrigation solutions to agricultural producers. Irri-Al-Tal competes in the global irrigation water systems market with a focus on developing solutions with commercial applications in the micro and precision irrigation segments of the overall market. At present, Irri-Al-Tal's main revenue streams are derived from the following business units: (i) projects business unit; and (ii) component and equipment sales unit.
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