LeTV main notice in the list of the following risks:
The actual controller of the company may change the risk
Up to now, Jiayue Ting holds 102,426.66 million shares of the company, accounting for 25.67% of the total share capital, of which 1,019,539,800 shares have been pledged to financial institutions and 1,024,266,600 shares have been frozen by the judiciary such as the Third Intermediate People's Court of Beijing.
Jiayue Ting equity pledges exist because of the additional security can not be disposed of by the relevant agency risks, which may result in changes in the actual controller of the company.
(2) There is a risk of recovery of some related party receivables
Since 2016, the Company has formed a large amount of related receivables and prepayments by way of capital transactions such as sales of goods, provision of services and other prepaid expenses to related parties controlled by Jiayuting, as of November 30, 2017, The related party arrears balance of listed companies reached 753,141.08 ten thousand yuan.
Although the Company is actively collecting the above-mentioned related party arrears, there is still a risk of repossession.Up to now, some of the Company's related accounts receivables have not yet been recovered, and the Company has formed a large amount of debts to upstream suppliers, unable to pay a large amount of debts Breach of contract and litigation and other issues.
If the above receivables have large-scale recovery difficulties, the Company's cash flow will be extremely tense and the corporate credit system will be endangered. As a result, the financing channels will be sluggish which will adversely affect the operation of the Company.
The management of the company has realized the seriousness and urgency of the problem. If there is no new capital entering, the company will face the difficult operation problem.
Based on the above, the shareholder of the Company, Tianjin Kairui Huixin Enterprise Management Co., Ltd. (hereinafter referred to as 'Tianjin Jia Rui') injected 1.79 billion yuan of funds into the listed company by means of borrowing, to a certain extent, relieved the pressure on capital needs of the Company and its subsidiaries .
(3) Jiayuenting, Jia Yuefang risk of the company's cash flow is not fulfilled due to the failure to fulfill the loan commitment
At the end of 2014 and May 25, 2015, the Company received Notice of Share Reducing Plan sent by Ms. Jia Yuefang and Mr. Jia Yunting respectively, all of which promised to lend the Company all or part of the funds they obtained from the Lotte Shares The working capital shall be used for the daily operation of the company, and the company may withdraw it according to the liquidity requirement within the prescribed time limit, and the term of the loan shall not be less than 60 months and shall be exempt from interest.
In December 2014 and February 2015, Ms. Jia Yuefang and the listed company respectively signed the "Loan Contract", with a total committed loan of not less than RMB1.678 billion. In June and November 2015, Mr. Jia Yunting and the listed company respectively signed the "Loan Contract ", A total commitment of not less than 5700000000 yuan of loans.Up to now, Mr.Jia Yunting, the balance of loans to the company is 0 yuan; Ms. Jia Yuefang loan balance of the company is 11.0095 million yuan.
This breach of promise directly or indirectly led to a serious shortage of working capital arrangements for the Company. The Company's cash flow was tight and its business deteriorated continuously, which in turn triggered a series of debt default and litigation risks.
(4) the company's existing debt matures lead to the company's cash flow further tense risk
The main cash source of the Company's operation was the financing channels of corporate members, TV sales and advertising businesses, bank loans and external borrowings, etc. The changes in the market environment and the impact of unlisted businesses resulted in the Company's business scale adjustment and business income decline, At the same time, the declining business scale led to the tightening of bank credit line and the risk of further tightening of cash flow due to maturity of debt.
As of December 31, 2017, the Company had a total of RMB9,288 million of financing loans and loan-type liabilities, of which RMB6,519 million will expire in 2018. If the Company's business scale can not be returned to a higher level and the credit limit is restored, the Company will The company is under pressure to pay debts due to further cash flow.
(5) There is a risk of material uncertainty in some of the company's business performance
As of December 31, 2016, the company's advertising business accounts receivable 478,428.39 million, some of which is expected to recover the accounts receivable uncertainty.If after the audit of this part of the receivables bad debt, will be The company's advertising business performance caused a certain impact.
In addition, due to the rapid increase in business volume demand of LeTV Cloud Computing Co., Ltd. (hereinafter referred to as "Cloud Computing") in the past, there is a substantial increase in costs.With the rapid changes in the current business scale, the cloud computing costs can not be timely and accurately analyzed Confirmation and adjustment, will form a greater pressure on cloud computing business performance.
The above factors lead to significant uncertainties in the performance of the Company's related businesses.
(6) the company's foreign investment risk
In March 2016, the board of directors of the Company considered and passed the proposal of setting up the Shenzhen Lexinxingen M & A Fund Investment Management Enterprise (Limited Partnership) (the "LeTV M & A Fund" or the "Fund"). The purpose of setting up this fund is to focus on the Eco-Industrial Chain Investment opportunities related to the underlying company, is committed to serving the growth of LeTV ecology, promoting the value of LeTV ecology to create, layout and music as eco-related content industries and fields.
On April 12, 2016, the 2015 Annual Shareholders' General Meeting of the Company considered and approved the "Proposal on Providing Repurchase Guarantee for the First Fund Raised for LeTV M & A Fund", and the LeTV M & A Fund initiated the establishment of M & A fund with a total scale of RMB 10 billion. The first phase About 4.8 billion yuan, of which less than the share of about 1 billion yuan, the sub-share of about 600 million yuan, the priority share of about 32 billion yuan, in order to ensure the successful acquisition of music and M & A funds and follow-up business, the company, Mr. joint joint venture for the music acquisition fund a raised funds principal and expected proceeds to provide repo joint guarantee is expected to assume responsibility for the guarantee of 50 billion yuan, which includes the middle level and priority 15% yield commitment.
As of now, the fund total investment of 4.349 billion yuan, of which less than the level of 1 billion yuan share, the subordinate share 600 million yuan, the priority share of 2.749 billion yuan .2016 so far, the fund has invested TCL Multimedia Technology Holdings Limited, Cool Group Limited Ltd., Shenzhen Super Multi-dimensional Technology Co., Ltd., Shenzhen Huixin Bridge Internet Financial Technology Service Co., Ltd. and other projects, with a total investment amount of 3.425 billion yuan.At present, the investment projects respectively have book losses, Project shut down and other issues, the risk of loss of funds.
The Fund is under the responsibility of Gu Yueting and LeTV Holdings Co., Ltd., and LeTV Co., Ltd. shall assume the joint and several liabilities for guarantee. If there is a serious loss in the fund as a whole, the Company may face a substantial loss of profit level and cash flow due to its joint and several liability. On the 30th, the actual guarantee amount of the Company was 50.0680 billion yuan.
(7) the use of raised funds to change the risk
During the period from August 2016 to November 2016, when the Company purchased the copyright from the seller of copyright through the use of funds raised by Tibet LeTV, some of the film and television productions that are subject to the purchase of copyright have been deferred or partially contractually terminated for regulatory reasons, actor changes, etc. To be changed and re-entered the negotiation period, resulting in delays in payment.The above-mentioned raised funds have not been immediately transferred back to the Ping An Bank account by the music in Tibet will be gradually transferred to LeTV account, used to pay staff salaries, Tax collection and other listed companies to replenish the use of liquid funds.The above issues involved a total of 881,020,000 yuan of raised funds before the end of 2016, due to the above copyright negotiations to determine the short term can not be purchased, Tibet LeTV total of 881,020,000 yuan will be transferred back to Ping An Bank Special account.
After disclosure of the matter on April 20, 2017, the Company promptly communicated with the regulatory authorities and took active remedial measures: The 37th meeting of the 3rd Board of Directors of the Company was convened to discuss and approve the proposal of "Temporarily Supplementary Mobility by Using Idle Raised Funds" Funds Proposal ", supplemented and fulfilled the procedures of raising funds to replenish working capital, submitted the aforesaid use of idle raised funds for temporary replenishment of working capital to the Board of Directors for consideration, and the independent directors, the board of supervisors and the sponsor express their firm opinions.
Although the Company promptly reversed the funds raised and took remedial and corrective measures, and educated the Company's internal staff, there is a risk that the Company may face penalties because the Company will raise funds to replenish its liquidity after failing to fulfill the corresponding review procedure .
(8) The risk of pledging the equity of a subsidiary and guaranteeing it externally
On November 21, 2017, the Company released the Announcement on the 50th Meeting of the 3rd Board of Directors. The board of directors of the Company unanimously approved and passed the "Proposal of LeTV Network Information Technology (Beijing) Co., Ltd. to Tianjin Jia Rui Huixin Enterprise Management Co., Ltd. to apply for a loan of 1.29 billion yuan and the Proposal on Providing Debt Guarantee and Related Guarantee for the Company's Borrowings. Related Directors Sun Hongbin and Liu Shuqing abstained from voting and independent directors issued prior approval opinions and agreed Independent opinion.
The aforesaid borrowings and counter-guarantee proposals were made by the Board of Directors and the management of the Company based on the fact that the company's current capital condition has been unable to support daily operating expenses. Currently, a large number of related-party accounts receivable have not been recovered and the major shareholder promised not to borrow from the Company Inadequate business operations outside the system, brand impact led to the company is difficult to apply for new financial institutions loans and the extension of the original loans and other issues, the company's financial situation has led to the daily operating expenses have been unable to support business operations unsustainable. Subprime loans, anti-guarantee agreement reached, in order to extend the company's business.
The Company holds the guarantee of the subsidiary's shares or counter-guarantee. At the same time, the subsidiary of the Company, as the subsidiary of the Company, provides counter-guarantee for the equity of its subsidiary for LeTV. If the debt can not be repaid due, The repayment of debts on time, the repayment of debts by the company or the insolvency of the guaranty assets results in the risk of being disposed of according to law.
In the meantime, the Company will also try to handle relevant debts or guarantees through disposing of other assets such as fund-raising and repayment, loan renewal and debt restructuring. However, if the Company can not raise funds by other means or reach the repayment delay and debt restructuring, the Company will face The actual controller of a subsidiary is subject to change.