BEIJING, May 22 /Xinhua-PRNewswire-FirstCall/ -- NextMart, Inc. (OTC Bulletin Board: NXMR), currently a China-based direct sales and apparel OEM company, today announced that it plans to change its main business to the area of financial advisory and direct investment in Mainland China. The Company's plans to change its main business is a result of ongoing challenges with its core OEM apparel operations, including (a) A drop in export apparel sales due to international market conditions; (b) A continually appreciating Chinese yuan, which makes Chinese exports more expensive to foreign buyers; and (c) An inability to raise additional financing under the current share price level in order to expand the Company's domestic direct sales operations. By adopting a new business in financial advisory and direct investment, NextMart's management believes that the Company can reduce its need for working capital, incentive key management and position itself to profit from the next wave of domestic and global financial transactions involving Chinese companies. About NextMart's New Business NextMart's new business will consist of financial advisory services and direct investment activities. For its financial advisory services, the Company intends to become a niche financial advisor for the privatization of Chinese state-owned enterprises ("SOEs"). The Company plans to develop and provide a suite of strategic advisory services for corporate restructuring, business strategy, valuation and financing to Chinese companies wishing to privatize their businesses and expand their operations globally. For its direct investment services, NextMart intends to focus on China's high growth TMT area, particularly the payment sector. The Company already has a base in the payment sector where it previously developed a land-line telephone-based payment platform called "NextPay." NextMart plans to receive strong support for its business transition from Sun Media Investment Holdings ("Sun Media"), the Company's leading shareholder. It also plans to receive support from Sun Media's sister investment firm, Redrock Capital Group. Redrock Capital Group is a set of venture investment and financial advisory firms spun off from Sun Media in 2007. The firm boasts a network of global investment partners including Softbank China Venture Capital (SCVC). Its investment banking division, Morgen Evan Redrock, is a member of M&A International Inc. ( http://www.mergers.net/ ), the world's largest alliance of privately-owned M&A investment banking firms. M&A International has 41 members in 39 countries. In 2007, its members closed over 370 transactions worth US$21 billion. NextMart has already received a tentative commitment from Sun Media/Redrock Capital Groups to provide NextMart with two advisory projects that will help jump start the Company's new financial advisory and investment consulting business. The details of these two projects are still being finalized. However, NextMart expects to receive cash and equity-based compensation in the client companies in exchange for its services. For equity compensation received, NextMart plans to implement a share dividend plan that will distribute part of its equity shares in the client companies to NextMart shareholders. Such a dividend plan would be entirely subject to NextMart's obtainment of all necessary approvals from its board of directors, its shareholders and the relevant listing authorities/regulatory bodies. Plans for NextMart's Existing Business In addition to changing its business direction, NextMart plans to spin off its existing apparel OEM business and certain marketing/direct sales assets in an attempt to enhance shareholder value in the short to medium term. The Company has signed a binding MOU with China Brands Direct, Ltd and Golden Stone Investments, Ltd, two other China-based direct sales companies, to create "Shanghai Fashion City Management Co., Ltd" ("SFC" or the "merged enterprise"), a large-scale home shopping/direct sales company for fashion products in China. Among NextMart's contribution to the merged enterprise, according to the signed MOU, will be its existing apparel OEM business and certain direct sales/marketing assets. Although no formal valuations of the merged enterprise have been conducted yet, NextMart management expects that the total value of its contribution to be greater than US$15 million. Such a valuation would be significantly higher than the total market value of NextMart, Inc., which was approximately US$6.88 million on May 22, 2008 (based on a closing share price of US$0.08). The Company and its business partners will attempt to list the merged enterprise on an international stock exchange in the next twelve months. The parties are in discussions with advisors and bankers of international stock exchanges in China (HK), Germany and the United Kingdom. Assuming the merged enterprise achieves a successful public listing, NextMart plans to implement a share dividend plan-similar to the one described above to distribute all or part of its ownership in the merged enterprise to NextMart shareholders. Such a dividend plan would be subject to the approvals listed above, as well as the terms of the shareholders' agreement by which NextMart and its partners establish the merged enterprise, and the terms and conditions of all future agreements with investors of the merged enterprise. Mr. Ren Huiliang, CEO of NextMart commented, "We believe that our planned new business direction in financial advisory and direct investment will reposition NextMart for steady long-term growth, under the strong support of the Sun Media/Redrock Capital Groups. We remain committed to our shareholders' cause and appreciate their support throughout this transition." NextMart reminds investors that its plans to spin off of the Company's existing apparel OEM business and to adopt a new business in financial advisory/direct investment will be subject to certain asset valuations, fairness opinions, and various approvals including, but not limited to, shareholder approval, debt holder approval, auditor approval, and other regulatory approval. As a result of NextMart's recent business developments, the Company will no longer be able meet its previously-disclosed earnings guidance of US$4-6 million for the fiscal year ending September 30, 2008. However, management intends to work hard towards achieving equal, if not higher, profits through its new business in financial advisory and investment consulting for the first 12-month period of operations following the completion of restructuring. This press release includes statements that may constitute 'forward- looking' statements, usually containing the word 'believe,' 'estimate,' 'project,' 'expect,' 'plan,' 'anticipate' or similar expressions. Forward- looking statements inherently involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Factors that would cause or contribute to such differences include, but are not limited to, continued acceptance of NextMart's product and services in the marketplace, competitive factors and changes in regulatory environments. These and other risks relating to NextMart's business are set forth in NextMart's Annual Report on Form 10-KSB for the period ended September 30, 2007 filed with the Securities and Exchange Commission on December 31, 2007, and other reports filed from time to time with the Securities and Exchange Commission. By making these forward-looking statements, NextMart disclaims any obligation to update these statements for revisions or changes after the date of this release. DATASOURCE: NextMart, Inc. CONTACT: Phoebe Wang of NextMart, Inc., +86-10-8518-9669

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