CityWalk e-Bike Establishes Variable Interest Entity Structure to Participate in China’s Growing Shared Electric Bicycle Market
Rhea-AI Summary
CityWalk e-Bike (OTC: CWLK) announced that its wholly foreign-owned enterprise in China, Xiao Gui Zhixing Technology, has entered into a 30-year Exclusive Business Cooperation Agreement, with automatic 30-year renewal, with Henan Xiao Gui Technology, a PRC shared electric bicycle operator. Xiao Gui is appointed Henan’s exclusive provider of technical, consulting, management, marketing, technology-development and equipment-leasing services, and will receive service fees based on service scope and Henan’s operating results. Henan granted Xiao Gui an irrevocable, exclusive option, subject to PRC law, to purchase all or part of Henan’s assets and business at the lowest price permitted. Henan currently operates 4,000 vehicles in three cities and plans to exceed 20,000 vehicles across five to eight cities over 36 months, subject to financing, approvals and market conditions. Management projections indicate potential nearly fivefold revenue growth from Year 1 to Year 3, which are forward-looking and not assured.
Positive
- 30-year exclusive cooperation agreement plus automatic 30-year renewal
- Exclusive service rights and fee-based participation in Henan’s operating results
- Irrevocable exclusive purchase option for Henan’s assets subject to PRC law
- 4,000-vehicle fleet currently in three cities with planned expansion beyond 20,000
- Management projects ~5x revenue increase from Year 1 to Year 3 (forward-looking)
Negative
- Fleet expansion to 20,000+ vehicles is contingent on financing and approvals
- Projected ~5x revenue growth is forward-looking and not guaranteed
- Economic participation relies on VIE contract structure, not direct asset ownership
News Explained
The arrangement creates potential operating-linked fees, but no fixed fee or current asset transfer is disclosed.
The agreement has been entered, but it does not transfer Henan’s operating assets to CityWalk; instead, Xiao Gui’s economic participation is through exclusive service rights and fees tied to service scope and Henan’s operating results.
The purchase option is a future contractual right to acquire assets or business, subject to PRC law, rather than a completed acquisition. The release does not state a fixed fee amount or an asset-transfer price, so it does not establish the immediate dollar value of the arrangement or a present ownership change.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Agreement Provides Exclusive Service Rights, Recurring Fee Potential and a Long-Term Platform to Participate in China's Underserved Urban Mobility Market
LAS VEGAS, Aug. 04, 2026 (GLOBE NEWSWIRE) -- CityWalk e-Bike Inc. (OTC: CWLK) (“the Company” or “CityWalk”) today announced that Xiao Gui Zhixing Technology Company Limited (“Xiao Gui”), the Company's wholly foreign-owned enterprise in the People's Republic of China (“PRC”), has entered into an Exclusive Business Cooperation Agreement (the “Agreement”) with Henan Xiao Gui Technology Company Limited (“Henan”), a PRC domestic company engaged in shared electric bicycle operations and related new energy business.
Under the terms of the Agreement, Henan has appointed Xiao Gui as its exclusive provider of technical support, consulting, management, marketing, technology development, equipment leasing and other services relating to Henan's principal business. Xiao Gui will receive service fees based on the scope of services provided and Henan's operating results. Henan has also granted Xiao Gui an irrevocable and exclusive option, to the extent permitted under applicable PRC law, to purchase all or part of Henan's assets and business at the lowest price permitted by PRC law. The Agreement has an initial term of 30 years and will renew automatically for an additional 30-year period.
Market Opportunity
Henan's planned operations are focused primarily on tier-two through tier-four cities, university towns, industrial parks, tourism zones, and newly developed residential and commercial districts in China. The Company believes these markets have historically received comparatively less investment from the largest national shared-mobility operators, which have concentrated resources primarily in tier-one cities and the central districts of major tier-two cities. Henan intends to initially target university students, employees of manufacturing and industrial parks, and residents of tier-two through tier-four cities in the regions in which it operates.
Planned Platform and Technology
Henan's proposed shared electric bicycle platform is intended to include the following features:
- Beidou centimeter-level positioning and electronic geofencing intended to improve parking accuracy
- A smart helmet-lock system intended to support rider safety and regulatory compliance
- Removable batteries with an anticipated range of approximately 75 kilometers
- Modular components intended to reduce repair time and vehicle downtime
- Real-time telemetry, battery monitoring, remote diagnostics and over-the-air software updates
- Artificial-intelligence-supported demand forecasting, fleet rebalancing and predictive maintenance
- Anonymized mobility analytics that may be offered to municipalities and other commercial customers
The business plan projects that AI-assisted scheduling could reduce fleet-rebalancing costs by more than
Revenue Model
Henan's business model contemplates multiple potential revenue sources, including:
- Usage-based ride fees
- Monthly, quarterly and annual memberships
- Enterprise programs for universities, industrial parks and corporate users
- Vehicle and in-app advertising
- Equipment leasing and related services
- Fees associated with parking outside designated operating areas
- Anonymized mobility-data and planning services
- Potential future carbon-credit and new-energy-related revenue
Fleet Expansion Plan
Henan currently operates a fleet of 4,000 vehicles across three cities. The company plans to deploy an additional 500 to 1,000 vehicles in a new city and subsequently expand its fleet to more than 20,000 vehicles across five to eight cities over a 36-month period, subject to available financing, regulatory approvals, market conditions, and other factors. Based on its current business plan, Henan projects that total revenue could increase nearly fivefold from Year 1 to Year 3. These figures are forward-looking projections and are subject to the risks and uncertainties described below.
Strategic Significance
The Agreement provides the Company, through Xiao Gui, with a variable interest entity structure that allows it to participate economically in Henan’s operations through exclusive service fees without directly owning Henan’s operating assets. Its 30-year term, automatic 30-year renewal, and exclusive purchase option establish a long-term commercial relationship and may provide Xiao Gui with future flexibility to acquire all or part of Henan’s assets and business, subject to applicable PRC laws and regulations.
"This agreement represents an important step in expanding the Company’s participation in China’s shared electric mobility and new energy markets," said Zhong Lin, CityWalk’s director. "Henan is targeting a substantial and underserved population across lower-tier cities, university towns, industrial parks, and other high-density mobility zones. Through Xiao Gui’s exclusive service rights, the Company has the opportunity to participate in the development of a potentially scalable and recurring-revenue business."
"We believe this development is meaningful for our investors because it combines a long-term contractual relationship, multiple potential revenue sources, technology-driven differentiation, and exposure to China’s urban mobility market," added Ding Zhao, CityWalk’s CEO. "Our objective is to pursue disciplined growth, demonstrate the economics of the platform through initial pilot operations, and expand only as operating milestones are achieved."
About Henan Xiao Gui Technology Company Limited
Henan is a PRC domestic company developing shared electric bicycle operations and related new energy services, with an initial focus on lower-tier cities, university towns, industrial parks, tourism zones and other concentrated urban mobility markets in China.
About CityWalk e-Bike Inc.
CityWalk e-Bike Inc. (OTC: CWLK) is a publicly traded company focused on electric and hydrogen-powered urban mobility technologies, pursuing opportunities in e-bike manufacturing, rental systems, infrastructure development and sustainable transportation solutions for large-scale urban markets. For more information, visit https://citywalkebike.com/.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the anticipated benefits of the Exclusive Business Cooperation Agreement; Xiao Gui's receipt of service fees; the development and expansion of Henan's shared electric bicycle operations; proposed fleet deployments; customer adoption; revenue growth; operating efficiencies; technology development; regulatory approvals; financing requirements; and the potential exercise of Xiao Gui's option to acquire all or part of Henan's assets and business. Forward-looking statements are identified by words such as “believes,” “expects,” “may,” “plans,” “intends,” “projects,” “anticipates,” and similar expressions, and include statements regarding management's current expectations and projections, which have not been independently verified and are not guarantees of future performance.
These statements are based on current expectations and assumptions and are subject to risks and uncertainties, including but not limited to the availability of financing, regulatory changes in the PRC and the United States, required governmental approvals, competition, market acceptance, fleet utilization, technology performance, operating costs, supply-chain conditions, execution of the business plan, and the risks generally applicable to companies with operations conducted through contractual arrangements with PRC entities. Actual results could differ materially from those anticipated in these forward-looking statements. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.
Company Contact:
Ding Zhao, Chief Executive Officer
CityWalk e-Bike Inc.
Email: ding@citywalkebike.com
