V2Y Corporation, which is in the business of providing third party administration and value-added services to help companies in the computer, communication and consumer electronics sector manage and execute their extended warranty and accidental damage protection programmes, has entered into an exclusive distribution agreement with Shouguang Leyi Vegetable Technology Development Co., Ltd to supply Chinese cabbage and other products produced by the latter to countries in Southeast Asia.
The agreement was entered into by V2Y’s newly-incorporated subsidiary, Evertrust Distribution (EDPL). EDPL was incorporated on Nov 22. Its principal activity is the wholesale of fruits and vegetables, says V2Y in its Nov 22 statement.
A joint venture agreement (JVA) was entered between V2Y and EDPL to regulate the relationship of the shareholders of EDPL, which is V2Y’s wholly-owned subsidiary, V2Y Pte Ltd (V2YPL) and Green Grapes Pte Ltd (GGPL). Under the JVA, V2YPL will subscribe for 51,000 shares (or a 51% stake in the JV) at $1 apiece while GGPL will subscribe for 49,000 shares (or a 49% stake) at $1 each. GGPL was identified as a JV partner due to its business connections in the industry, including Shouguang Leyi, says V2Y Corp.
Under the distribution agreement, EDPL will be the distributor of Shouguang Leyi’s products for three years starting from Dec 1. The agreement will automatically be renewed on the same terms and conditions once the initial three years are up.
EDPL will have to purchase a projected target of $10 million from Shouguang Leyi from Dec 1, 2024, to Dec 31, 2025. The projected target for subsequent years will be subject to further review. A failure to meet the sales target will not constitute a breach of the distribution agreement. There will be no penalties or compensation should the target not be met for each year during the term of the agreement.
In its Nov 30 statement, V2Y Corp says it intends to sell the products by identifying and engaging potential partners who are interested in carrying and reselling them. It adds that it has already obtained the required certifications and licences in China for the sale and export. The group will also work with third parties to obtain the necessary certifications to distribute the products in Singapore.
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V2Y Corp, which was previously known as Synagie Corporation, obtained the mandate to diversify its business from its shareholders on Oct 8.
Prior to that, the company acquired a hot-pot chain on Aug 28 for $250,000, saying that it was exploring opportunities in the food and beverage (F&B) industry to diversify its business and reduce its reliance on its existing core business. The seller, Culinary Creation, operates a restaurant and two food outlets located at the Jalan Besar Sports Centre, 201 Kim Tian Road and 134 Tagore Lane.
On Oct 10, the company entered into a sale and purchase agreement (SPA) to acquire Urban Exchange for $580,000. V2Y Corp also paid a rental security deposit to use Urban Exchange’s coffeeshop at Block 603 Clementi West Street 1, #01-43.
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During the 3QFY2024 ended Sept 30, V2Y Corp reported a loss of $384,000, 73% deeper than the $222,000 loss it incurred in the 3QFY2023. For the 9MFY2024, the company reported a loss of $823,000, 12.4% more than the $732,000 loss in the 9MFY2023.
Shares in V2Y Corp closed 0.2 cents higher or 14.29% up at 1.6 cents on Nov 29.
