China Rapid Finance (XRF) Announces Agreements with YBT/SOS and Investors

China Rapid Finance Limited (NYSE: XRF) today announced the execution of a set of agreements on May 5, 2020 with Yong Bao Two Ltd. ("YBT"), the parent company of SOS Information Technology Co., Ltd. ("SOS") via a variable interest entity ("VIE"), the shareholders of YBT ("YBT Shareholders"), eight sophisticated investors introduced by YBT (the "Purchasers," collectively with the YBT Shareholders as the "Investors") and True North Financial, LLC ("True North").

The Agreements will allow the Investors to acquire share amounts previously issued to True North as well as certain additional shares in exchange for the repayment of the Senior Secured Promissory Note issued by True North Financial. YBT shareholders will be contributing the YBT business into XRF. The purchasers will make certain cash investments. The per share purchase price for the transaction is $1.36 which reflects an approximate 25% premium to the 30-day average closing price at signing.

Under the terms of the Agreements, True North will transfer 37,985,293 Class A shares and the Company will issue 3,465,574 Class B ordinary shares to the Investors. To compensate for the price difference between the True North financing ($1.93) and the current market price (30-day average closing price before signing), true-up shares of about 8,066,241 Class A and 9,806,331 Class B ordinary shares shall be issued to the Investors. All of the Class B Shares previously issued to True North will be canceled. Upon closing, the Company will have 131,039,056 total shares outstanding. The Agreements are subject to a number of closing conditions and there is no assurance that such conditions will be met or satisfied.

Upon the closing, YBT will become a wholly owned subsidiary of the Company. YBT, through its consolidated subsidiaries, is a significant player in the emergency rescue business providing emergency healthcare services, emergency roadside assistance, emergency living assistance, and other rescue services in China.

Dr. Zane Wang will be leaving as Chairman, CEO and as a member of the Company's board of directors. He will be focusing on the winding down of the P2P business in China and the "Wealth Sharing" program. The Company will end the previous cooperation agreement with Hongkong Outjoy Education Technology Co., Ltd. ("OET") and cancel the unrealized warrants issued thereunder.

Mr. Yandai Wang, CEO of SOS (no relation to Zane Wang) will be appointed as the Executive Chairman and CEO of the Company. Mr. Wang has over 20 years of industrial experience in emergency rescue, telecom and call center services. He has been a visionary leader in the emergency rescue industry in China which has experienced explosive growth in the past decade.

Mr. Douglas Brown, an independent director of the Company, founder of Dlb Capital and former Vice Chairman-Investment Banking at Morgan Stanley, will be appointed as the Non-Executive Chairman of the Board of XRF.

The XRF Board has also appointed two new independent directors nominated by YBT, Mr. Jonathan Zhang who serves as the Chairman of 5C Group International Asset Management and Mr. Wenbin Wu who serves as the Chairman of Shenzhen Rongde Investments Ltd. and Shenzhen Rongde Enterprise Management Advisory Company. Both new directors will join the Company's Audit and Compensation Committees.

Upon closing, XRF's fin-tech business will drive cross-sell opportunities and leverage funding sources from SOS' portfolio. The Company expects significant growth potential with the combination of SOS' emergency rescue services and XRF's fin-tech services' member base, which represents over 55 million members combined.

Mr. Douglas Brown commented: "We couldn't be more excited about these developments. Since the change in regulations regarding the P2P industry we have been solely focused on conserving cash and making collections on behalf of our platform funders. As a result of these transactions we can now focus on growth. We believe that the addition of the SOS business will give the Company unparalleled opportunities in two areas: it gives us the resources to take advantage of valuable financial services licenses we have, as well as pursue the evolving capital markets opportunities within the portfolio on behalf of our platform investors. In addition, it gives us an entry into the fast-expanding emergency rescue business in China. The SOS customer base expanded 100% in last 6 months of 2019. Cross selling to the 55 million combined customers can create something exciting that will benefit our existing shareholders while giving XRF valuable resources to help transform the fin-tech side of our business. I am also excited to work with the two new independent directors who will bring extensive industry and management experience."

SOS' CEO Mr. Yandai Wang commented, "We are excited about the new opportunity and glad to be a part of XRF. Based on our vast resources in the emergency rescue and related industries, we believe this will provide us with meaningful business synergy and create value for XRF's shareholders. We are also looking forward to joining XRF and will remain committed to maintaining the highest standards of transparency and compliance."

Additional information about these Agreements and the Company's post-closing business will be made available in a subsequent 6-K filing.

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