Officials Reach a Breakthrough in the U.S. - China Trade Dispute
NEW YORK, Jan. 16, 2020 /PRNewswire/ -- U.S. stock indexes touched record highs but ended up ambling into the close Wednesday after President Donald Trump signed the first phase of a trade deal with Chinese Vice Premier Liu He, deescalating an 18-month conflict between the world's two largest economies. The first phase of the trade agreement includes promises by the Chinese government to increase their purchases of U.S. agricultural, manufacturing, and energy products by more than USD 200 Billion over the next two years. Additionally, changes to Chinese regulation and criminal codes regarding intellectual property theft and counterfeiting were also included. "This is a very important and remarkable occasion. Today, we take a momentous step, one that has never been taken before with China, toward a future with a fair and reciprocal trade as we sign Phase 1 of the historic trade deal between the United States and China," the President said during the White House press conference. CTI Industries Corporation (NASDAQ: CTIB), Pinduoduo Inc. (NASDAQ: PDD), Alibaba Group (NYSE: BABA), Baidu, Inc. (NASDAQ: BIDU), JD.com, Inc. (NASDAQ: JD)
The first phase of the trade deal has already received its fair share of criticism. According to a report by Politico, critics have warned that the 86-page agreement fails to resolve the enduring U.S. concerns about China's industrial policy, specifically how to restrain the billions of dollars in government subsidies Beijing grants to its state-owned corporations. "That's a giant hole in the phase one deal, and there's no way to get around it," said Chad Bown, a senior fellow at the Peterson Institute for International Economics. "We're no closer today to resolving any of those fundamental frictions than we were before the trade war started," Bown added. Negotiations regarding the second phase of the trade deal are set to begin in the near future, with uncertainties abound on how long it will take for the deal to materialize. But in the meantime, phase one is expected to somewhat stabilize the relationship between two nations as well as provide relief to farmers and manufacturers bearing the impact of the Trump's tariffs.
CTI Industries Corporation (NASDAQ: CTIB) announced today, "the first closing of a previously announced stock purchase agreement (the 'Offering') on January 13, 2020, for total gross proceeds of $2,500,000. On January 3, 2020, the Company disclosed that it had entered into a stock purchase agreement ('The Purchase Agreement'), with LF International Pte. Ltd., a Singapore private limited company (the 'Investor'), for a strategic investment, which the Company expects to resolve the over advance circumstance with its primary lender and provide a confident first step in reconstructing a healthy capital structure.
This initial closing is part of a larger Offering of 500,000 shares of the Company's newly created Series A Convertible Preferred Stock, no par value per share ('Series A Preferred'), with each share of Series A Preferred initially convertible into ten shares of the Company's common stock, at a purchase price of $10.00 per share, for aggregate gross proceeds of $5,000,000 (the 'Offering'). The gross proceeds from the Offering of $5,000,000 were held in escrow; the first closing resulted in the release of $2,500,000 in cash from the funds held in escrow, with a remaining $2,500,000 still held in escrow, which will be released upon completion of specific events. The Company's management team considers the Offering and strategic partner representative of a shift and plans to utilize the cash influx to continue to steer CTI into a new more focused direction on behalf of their shareholders.
'This is the sort of strong financial partner that CTI determined would be a key element to our future business operations,' said Frank Cesario, President and CEO. 'With deals such as the Offering with LF International, and the impending sale of our subsidiary in Mexico, we will reduce our debt by nearly $6 million. The second closing with LF International will provide funds for us to further invest in executing our blueprint for a significantly renewed CTI. We look forward to creating value together.'
CTI entered into a Loan Agreement with its primary lender on December 14, 2017, and had been operating under a Forbearance Agreement due to certain events of default. The Forbearance was scheduled to terminate on January 10, 2020.
On January 13, 2020, a new Forbearance between CTI and its lender became effective, for a period ending no later than December 31, 2020 and the Company incorporated the proceeds from the first closing of the Offering into an ongoing credit facility, including new loan covenants. CTI expects to proceed shortly with the second closing of the Offering.
About CTI: CTI Industries Corporation is one of the leading manufacturers and marketers of foil and latex balloons, and produces laminated and printed films for commercial uses. CTI also distributes Candy Blossoms and other gift items. CTI markets its products throughout the United States and in several other countries."
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Pinduoduo Inc. (NASDAQ: PDD) is a technology platform and one of the leading Chinese e-commerce players. In their third quarter earnings from earlier last year, Pinduoduo announced total revenues in the quarter were RMB7,513.9 million (US$1,051.2 million), an increase of 123% from RMB3,372.4 million in the same quarter of 2018. "We celebrated our fourth anniversary in early October with an annual active buyer base exceeding half a billion for the twelve-month period ended September 30, 2019," said Mr. Zheng Huang, Chairman and Chief Executive Officer of Pinduoduo. "We continued to invest in our users throughout the third quarter, and stepped our marketing up a notch from the second half of September for the launch of our anniversary sale. This has added to our steady momentum of user growth as our average monthly active users grew by 64 million from the prior quarter to reach 430 million. Coupled with greater user engagement and frequency of visit, annual spending per active buyer has grown 75% year-over-year, driving our last-twelve-month GMV up 144% to reach RMB840.2 billion. We will work even harder to deliver a consistently improving user experience and build up our users' trust and familiarity with our platform."
Alibaba Group (NYSE: BABA), a Chinese based company and e-commerce, shared recently the results of its brand new "Alibaba.com U.S. Small and Medium Business (SMB) Confidence Survey" and introduced "B2B Tuesday," a major new awareness initiative to spotlight, celebrate and support B2B-focused U.S. SMBs, highlight their contributions to the U.S. economy and help them capture the global ecommerce opportunity. "Strong SMB confidence among American business owners and entrepreneurs, plus the growth from digitizing of their business and doing business globally means the future is bright for U.S. SMBs," said John Caplan, head of North America B2B at Alibaba Group. "Less than one third of businesses we surveyed have been doing business online for more than five years. That means there is an enormous opportunity for U.S. SMBs to digitize and grow their businesses globally with ease. And B2B Tuesday is one more example of how Alibaba.com is here to help." The first B2B Tuesday will be celebrated with an "Alibaba.com Build Up" event, featuring a turbocharged line-up of SMBs and industry experts held at Alibaba.com's NYC office in the Meatpacking District.
Baidu, Inc. (NASDAQ: BIDU) a Chinese-language internet search provider, and Samsung Electronics Co., Ltd., a world leader in advanced semiconductor technology, announced recently that Baidu's first cloud-to-edge AI accelerator, Baidu KUNLUN, has completed its development and will be mass-produced early next year. Baidu KUNLUN chip is built on the company's advanced XPU, a home-grown neural processor architecture for cloud, edge, and AI, as well as Samsung's 14-nanometer (nm) process technology with its I-CubeTM (Interposer-Cube) package solution. "We are excited to lead the HPC industry together with Samsung Foundry," said OuYang Jian, Distinguished Architect of Baidu. "Baidu KUNLUN is a very challenging project since it requires not only high level of reliability and performance at the same time, but is also a compilation of the most advanced technologies in the semiconductor industry. Thanks to Samsung's state of the art process technologies and competent foundry services, we were able to meet and surpass our goal to offer superior AI user experience."
JD.com, Inc. (NASDAQ: JD), a Chinese based technology driven e-commerce company and retail infrastructure service provider, reported earlier in November their financial results for the quarter ended September 30, 2019. Net revenues for the third quarter of 2019 were RMB134.8 billion (US$118.9 billion), an increase of 28.7% from the third quarter of 2018. Net service revenues for the third quarter of 2019 were RMB16.0 billion (US$2.2 billion), an increase of 47.0% from the third quarter of 2018. "JD's commitment to providing consumers with the best possible online shopping experience drove another strong quarter of growth," said Richard Liu, Chairman and Chief Executive Officer of JD.com. "In particular, more and more consumers in China's fast-growing lower-tier cities are turning to JD for our superior value and service. We will continue to invest in technology and innovation to meet the growing needs of Chinese consumers and businesses for fast and reliable e-commerce and supply chain solutions."
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