Borqs Technologies Teams up With China Health to Develop IoT Products
Under the deal, China Health plans to purchase up to $12 million of Borq's ordinary shares.
Borqs Technologies, Inc. (Nasdaq: BRQS) announced Thursday that it has signed a deal with China Health Industries Holdings, Inc. (OTCQB: CHHE) to develop mobile Internet of Things (IoT) products.
Under the agreement, the California-based company said that China Health plans to purchase up to $12 million of its shares, according to its statement today. The warrants will carry a two-year tenure, exercisable at a premium of 25% more than the price of Borq's ordinary shares.
Borqs plans on using the proceeds to establish a new joint-venture subsidiary with China Health, focusing on developing mobile medical IoT products that are based on QUALCOMM Inc.'s (Nasdaq: QCOM) 5G Technology. According to Borqs, it was selected by Qualcomm in 2016 to collaborate on the development of the world's first 4G Android wearable product.
The move today follows the company's announcement in April when it received $150 million from a financing group to fulfill working capital needs. At the time, the news sent the company's stock soaring to a high of $7.83 per American depositary share. However, Borqs hasn't even come close to that trading price since. By midday Thursday, its stock was trading nearly 3% higher at $1.64 per share.
The company has also been in trouble with Nasdaq for not filing its 2018 full-year financials in time. The stock exchange suspended Borqs from trading from September to March.
Formally headquartered in Beijing, Borqs in addition to its IoT system provides Android-based smart connected devices and E2E cloud-service solutions. With 500 employees globally, the company operates in China, India, the U.S., Japan, and Korea. China Health makes and distributes medical devices, drugs, and health products in China that are licensed by the China Food and Drug Administration.
In the full year 2018, Borqs reported revenue of $128.4 million, up 5% year-over-year with a net loss of $39.45 million.
Borqs said that the agreement is subject to the signing of definitive papers over the coming weeks.