Item 1.01 Entry into a Material Definitive Agreement.
On December 23, 2021, Tengjun Biotechnology Corp., a Nevada company (the
"Company"), entered into a Share Purchase/Exchange Agreement (the "Share
Exchange Agreement") with Tengjunxiang Biotechnology Ltd. (the "Target"), a
Cayman Islands corporation, and the Target's eleven shareholders (the "Selling
Shareholders"): Min Xing Biotechnolgy Ltd, Pastoral Technology Co., Ltd., Shu
Zhilin Trading Co., Ltd., Teng Rui Xiang Bio-Tech Ltd., Aihua Trading Co., Ltd,
Rock Climbing Technology, Langtaosha Trading Co., Ltd., Min Cheng Biotechnology
Ltd, Kangfan Technology Co., Ltd., Chaorong Technology Co., Ltd., and Shengrui
Biotechnology Co., Ltd. In accordance with the Share Exchange Agreement, on
December 23, 2021, the Selling Shareholders collectively sold and transferred
500,000,000 ordinary shares of the Target, constituting one hundred percent
(100%) of the issued and outstanding share capital of the Target, to the Company
in exchange for 19,285,714 shares of Company's common stock, par value $0.001
per share (the "Tengjun Shares"), at an agreed price of $0.19 per share of the
Company's common stock (the "Common Stock") for a total valuation of $3,675,000
of the Target.
In connection with the acquisition of the Target pursuant to the Share Exchange
Agreement, the Company is entering into the Chinese tea and water purifier
business through its newly acquired subsidiary the Target Company, which owns
four corporate entities: (i) Tengjunxiang Biotechnology HK Limited ("Tengjun
HK"), a company formed in Hong Kong and wholly owned by the Target, (ii)
Shandong Minfu Biotechnology Co., Ltd. ("WFOE"), a wholly foreign owned entity
formed under the laws of China and wholly owned by Tengjun HK, (iii) Shandong
Tengjunxiang Biotechnology Co., Ltd. ("Shangdong Tengjunxiang"), a company
formed under the laws of China and 94.95% owned by WFOE, and (iv) Jinxiang
County Kanglong Water Purification Equipment Co. Ltd. ("Kanglong"), a company
formed under the laws of China and wholly-owned subsidiary of Shandong
Tengjunxiang. The parties to this Agreement closed the transaction contemplated
therein on December 23, 2021.
Item 2.01 Completion of Acquisition or Disposition of Assets.
Information in response to this Item 2.01 is keyed to the Item numbers of Form
10.
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DESCRIPTION OF BUSINESS
Overview
Effective on December 23, 2021 (the "Closing Date"), pursuant to the Share
Exchange Agreement, the Target became a wholly-owned subsidiary of the Company.
The acquisition of the Target Company (the "Acquisition") is treated as a
reverse acquisition (the "Reverse Merger"), and the business of the Target
Company became the business of the Company. At the time of the Reverse Merger,
the Company was not engaged in any active business.
As a result, we are now, through the Target Company, engaged in the growing,
producing and distributing Chinese herbal teas with a side business line of
designing and manufacturing water purifiers.
Our executive offices are located at East Jinze Road and South Huimin Road, Food
Industry Economic and Technology Development District, Jinxiang County, Jining
City, Shandong Province, China.
Corporate History and Structure
China Herb Group Holdings Corporation (the "Company") was incorporated under the
name "Island Radio, Inc." under the laws of the State of Nevada on June 28,
2010. On December 9, 2019, the Company changed its corporate name to "Tengjun
Biotechnology Corp."
On June 27, 2012, Eric R. Boyer and Nina Edstrom (collectively, the "Sellers"),
who were then the major shareholders of the Company, entered into a Share
Purchase Agreement with Chin Yung Kong, Qiuping Lu and Fumin Feng (collectively,
the "Purchasers"), pursuant to which the Sellers sold to the Purchasers an
aggregate 4,000,000 shares of the common stock of the Company, which represented
approximately 93% of the then total issued and outstanding stock of the Company,
for a total purchase price of $159,970 (the "Change in Control"). As result of
this share purchase transaction, Chin Yung Kong, Qiuping Lu and Fumin Feng
became the controlling shareholders of the Company.
The Company's original business plan was to become a commercial FM radio
broadcaster. Subsequently, following the Change in Control, the Company changed
its business plan and intended to become a medical and spa company with a focus
on Asia. However, after consultation with its professional and business advisors
in the United States and the People's Republic of China, the Company's
management decided during the third quarter of 2014 that this would no longer be
its plan of operations. The Company's plan of operations is to evaluate various
industries, geographic and market opportunities. This may take the form of
acquiring a business, being acquired by an existing business or developing a
business organically. Any such efforts may require significant capital, which
the Company currently lacks. There is no assurance that any such opportunity
will become available. There is also no assurance that, if any opportunity
becomes available, the Company will have the financial and other resources
available to take advantage of such opportunity, since the Company has extremely
limited liquidity. Through September 30, 2021, the Company has no revenues or
operation.
As a result of the consummation of the Acquisition on December 23, 2021 as
discussed above, the Target Company became a wholly-owned subsidiary of the
Company and the business of the Target Company became the business of the
Company.
The Target Company was incorporated on July 19, 2021 under the laws of the
Cayman Islands. The authorized capital stock of the Target is 500,000,000
ordinary shares, all of which were issued and outstanding prior to the closing
of the Acquisition. Shangdong Tengjunxiang, our operating company, was formed on
June 27, 2014, under the laws of China. Promptly after the Closing, the Target
Company shall update the shareholder registration of the Target to effect the
Share Exchange Agreement. The Share Exchange Agreement was signed and agreed by
and among all of the shareholders and/or beneficial owners of the Target, the
Target and the Company.
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The diagram below illustrates our corporate structure following the Acquisition:
[[Image Removed]]
Business Strategy
Compared with other teas, dandelion teas enjoy the reputation of having health
benefits in China. It is a household concept in China that drinking dandelion
teas may clean the consumers' livers and purifying their digestion system.
Target intends to leverage that deep-rooted concept to market its products to
the Chinese consumers.
As of September 30, 2021, Target produced only two types of teas, green
dandelion tea and black dandelion tea with another line of business of
manufacturing and selling consumer water purifiers. Target's tea products are
focused on not only their taste but also their aesthetic presentation and health
benefits. We have not started official marketing and distribution of our
products. We plan to offer Target's products in certain flagship stores in China
through regional representatives, online stores and wechat marketing.
The Target has devoted substantial resources to establish the entire dandelion
production chain, from research and development, plant cultivation, tea leaves
. . .
Item 3.02 Unregistered Sales of Equity Securities.
Reference is made to the disclosure set forth under Item 2.01 of this report,
which disclosure is incorporated herein by reference.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangement of Certain Officers.
Reference is made to the disclosure set forth under Item 2.01 of this report,
which disclosure is incorporated herein by reference.
Item 5.06 Change in Shell Company Status.
The disclosure set forth in Item 2.01 to this Current Report is incorporated
into this item by reference. As a result of the completion of the Stock
Exchange, we believe that we are no longer a shell company, as defined in Rule
405 of the Securities Act and Rule 12b-2 of the Exchange Act.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of the Target Company are included following the
signature page.
Filed herewith as Exhibit 99.1 and incorporated herein by reference are the
audited consolidated financial statements of Target for the years ended December
31, 2019 and 2020 as well as Exhibit 99.2 unaudited consolidated financial
statements of Target for the nine-month periods ended September 30, 2020 and
2021.
(b) Pro forma financial information.
Filed herewith as Exhibit 99.3 and incorporated herein by reference are the
unaudited pro forma combined financial statements of the Target and Company as
of September 30, 2021 and for the nine months ended September 30, 2021 and year
ended December 31, 2020.
(c) Exhibits
Exhibit
Number Description
3.1 Amendment of Articles of Incorporation of the Company dated November
25, 2019 (incorporated by reference to our current report on Form 8-K
filed with the SEC on December 12, 2019)
3.2 Bylaws of the Company (incorporated by reference to Exhibit 3.2 to our
Registration Statement on Form S-1/A filed with the SEC on October 12,
2010)
10.1 Share Exchange Agreement dated December 23, 2021*
99.1 Audited consolidated financial statements of Tengjunxiang
Biotechnology Ltd. for the fiscal years ended December 31, 2020 and
2019*
99.2 Unaudited consolidated financial statements of Tengjunxiang
Biotechnology Ltd. as of September 30, 2021 and for the nine months
ended September 30, 2021 and 2020*
99.3 Unaudited pro forma combined financial statements of Tengjunxiang
Biotechnology Ltd. and Tengjun Biotechnology Corp. as of September 30,
2021 and for the nine months ended September 30, 2021 and year ended
December 31, 2020*
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
* Filed herewith.
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