The Board of Directors of D & O Green Technologies Berhad (“D&O” or “the Company”) are pleased to announce that Dominant Opto Technologies Sdn Bhd (“Dominant”), a 89.79% owned subsidiary of D&O, had on 30 January 2019 invested seven hundred and fifty thousand (750,000) shares, which represents seventy five percentage (75%) of the total share capital in DOT SEMICONDUCTOR INC. (“DOT”) at a total consideration of USD1,000,000 or RM4,107,000 equivalent (“Proposed Investment”).
2. DETAILS OF THE PROPOSED INVESTMENT
2.1 Information of DOT
DOT was incorporated on 5 November 2018 under the laws of United States of America in the States of California as a private limited company.
The issued share capital of DOT is 1,000,000 upon the completion of the Proposed Investment, whereas Dominant owns 75% of the equity shareholding of DOT.
The principal activity of DOT is design, develop and sell integrated circuit (“IC”) chips that works with LEDs directly or LED application.
2.2 Settlement of Proposed Investment
(i) Dominant requested to pay USD263,330, equivalent to RM1,081,496, as first call for funding by DOT; and
(ii) The remaining USD736,670, equivalent to RM3,025,504, as and when to be called by DOT.
3. RATIONALE FOR THE PROPOSED INVESTMENT
The Proposed Investment will be able to strengthen Dominant’s supply chain by design and develop Dominant own IC chips.
Dominant’s LEDs continued to gain wider acceptance by global automotive customers in terms of service standards, product quality, reliability and price. The Proposed Investment is expected to increase customer penetration by offering customized value-added services and products that meet customers’ ever changing demands.
5. SOURCE OF FUNDS
The proposed investment is USD1,000,000 equivalent to approximately RM4,107,000, which will be funded via internally generated funds.
6. RISK FACTORS
General Business Risks
DOT’s revenue and operating results are exposed to general business risk as well as certain risk inherent in the semiconductor industry. These may include, amongst others, intensity of competition, changes in technology and changes in general economic, business and credit conditions.
There can be no assurance that the anticipated benefits of the Investment will be realized, or DOT will be able to generate sufficient revenue in future to offset the investment cost incurred by Dominant.
7. EFFECTS OF THE PROPOSED INVESTMENT
(i) Share Capital and Substantial Shareholdings
The Proposed Investment will have no effect on the issued and paid-up share capital of D&O or the shareholdings of D&O’s substantial shareholders.
(ii) Earnings, Net Assets and Gearing
The Proposed Investment is not expected to have any material effect on the earnings, net assets and gearing of D&O Group for the financial year ending 31 December 2019, but it is expected to contribute to the future earnings of the D&O Group.
8. INTERESTS OF THE DIRECTORS, MAJOR SHAREHOLDERS AND/ OR PERSONS CONNECTED TO THEM
None of the Directors and/or major shareholders of D&O and/or any persons connected to them have any interest, direct or indirect, in the Proposed Investment.
9. DIRECTORS’ STATEMENT
Having considered all aspects of the Proposed Investment, the Board of D&O is of the opinion that the Proposed Investment is in the best interest of D&O.
10. APPROVAL REQUIRED
The Proposed Investment does not require approval from the shareholders of D&O or regulatory authorities.
11. ESTIMATED TIME FRAME FOR COMPLETION
Barring any unforeseen circumstances, the full settlement is expected to complete by end of 2019.
12. PARAGRAPH 10.02(G) OF THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD
The highest percentage ratio pursuant to Paragraph 10.02(g) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad for the Proposed Investment is 1.69%.
Announcement dated 30 day of January 2019