BEIJING, Oct. 29, 2019 /PRNewswire/ -- Origin Agritech Ltd. (NASDAQ: SEED) (the "Company" or "Origin"), an agriculture technology and rural e-commerce company, updates the progress of Biotech Commercialization joint venture with Beijing Changping Technology Innodevelop Group (BC-TID). On June 5, 2019, the Company announced that the Company entered into a Cooperation Framework Agreement with BC-TID to form a new joint venture to focus on the commercialization of genetically modified (GM) corn seed technologies.
Under the agreement, Origin and BC-TID will establish a new entity with approximately equal partnership. The Company will contribute the Origin Life Science Center building in Beijing and two biotech corn traits to the new joint venture, and BC-TID will fund the joint venture with a total of RMB204 million. The two biotech traits are the glyphosate tolerance (Gt) trait and the double stacked traits of insect resistance (Bt) and Gt genes. These two traits have completed multi-year production tests, and we have submitted the application for the final stage of biosafety approval in April to China's Ministry of Agriculture.
Since the Cooperation Framework Agreement was signed, both parties are actively involved to complete the formation of joint venture. However, the process took longer than we originally expected mainly due to the complicated tax related issues with the Origin Life Science Center building in Beijing. Both parties now agreed to use Beijing Origin Seed Limited (Beijing Origin) as the joint venture entity in order to expediate the process. The original term remains the same and both parties are cooperating to complete the process as soon as possible. Due diligence has been completed and BC-TID has deposited RMB15 million (US$2.1 million) in an escrow account.
Beijing Origin has been the operating company for the Company's Chinese seed business and is controlled by the Company through a series of stock consignment agreements. The Company will transfer the seed business from Beijing Origin to Beijing Origin State Harvest Biotechnology Limited (State Harvest), which is the Company's wholly owned entity in China. After the changes and investment from BC-TID, Beijing Origin will become a joint venture of the Company and BC-TID, and will have the assets of the Origin Life Science Center building and two biotech corn traits discussed above.
BC-TID is wholly owned by the local government of Changping District in Beijing and was setup as an industrial investment platform. With over RMB10 billion asset, BC-TID mainly invests in the companies in the industrial parks of Changping District, where Origin Life Science Center building is located.
About Origin Agritech Limited
Origin Agritech Limited, founded in 1997 and headquartered in Zhong-Guan-Cun (ZGC) Life Science Park in Beijing, is China's leading agricultural technology and a rural social e-commerce company, expanding in mid-2018 from crop seed breeding and genetic improvement business to be a leading technology developer in new rural e-commerce platform and Blockchain technologies. In crop seed biotechnologies, Origin Agritech's phytase corn was the first transgenic corn to receive the Bio-Safety Certificate from China's Ministry of Agriculture. Over the years, Origin has established a robust biotechnology seed pipeline including products with glyphosate tolerance and pest resistance (Bt) traits. For further information, please visit the Company's website at: http://www.originseed.com.cn or http://www.originseed.com.cn/en/.
Forward-Looking Statements
This communication contains "forward-looking statements" as defined in the federal securities laws, including Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements address expected future business and financial performance and financial condition, and contain words like "expect," "anticipate," "intend," "plan," "believe," "seek," "will," "would," "target," and similar expressions and variations. Forward-looking statements address matters that are uncertain. Forward-looking statements are not guarantees of future performance and are based on assumptions and expectations which may not be realized. They are based on management's current expectations, assumptions, estimates and projections about the Company and the industry in which the Company operates but involve a number of risks and uncertainties, many of which are beyond the company's control. Some of the important factors that could cause the company's actual results to differ materially from those discussed in forward-looking statements are: failure to develop and market new products and optimally manage product life cycles; ability to respond to market acceptance, rules, regulations and policies affecting our products; failure to appropriately manage process safety and product stewardship issues; changes in laws and regulations or political conditions; global economic and capital markets conditions, such as inflation, interest and currency exchange rates; business or supply disruptions; natural disasters and weather events and patterns; ability to protect and enforce the company's intellectual property rights; and separation of underperforming or non-strategic assets or businesses. The company undertakes no duty or obligation to publicly revise or update any forward-looking statements as a result of future developments, or new information or otherwise, should circumstances change, except as otherwise required by securities and other applicable laws. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and actual results may differ materially from the anticipated results. You are urged to consider these factors carefully in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking statements, which are qualified in their entirety by these cautionary statements.
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SOURCE Origin Agritech Limited