China Xuefeng Environmental Engineering, Inc. (OTCMKTS:CXEE) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
On January 11, 2016, China Xuefeng Environmental Engineering,
Inc. (the “Company“) effectively terminated its existing
variable interest entity agreements, or VIEs, as permitted by the
laws of the People’s Republic of China (the “VIE
Termination“), to certain Equity Transfer Agreements dated
January 11, 2016 (the “Equity Transfer Agreements“),
entered into by and among Mr. Li Yuan, Mr. Yi Yuan (each a
shareholder of Jiangsu Xuefeng Environmental Protection Science
and Technology Co., Ltd., together the “Shareholders“)
and Baichuang Information Consulting (Shenzhen) Co. Ltd., a
wholly-owned subsidiary of the Company (the “WFOE“). to
the Equity Transfer Agreement, the Shareholders collectively
transferred 100% of their equity interest in Jiangsu Xuefeng to
the WFOE, effectively terminating Company’s contractual control
of Jiangsu Xuefeng and providing Company with direct ownership of
Jiangsu Xuefeng (the “VIE Termination“). Upon the VIE
Termination, Jiangsu Xuefeng became a wholly-owned subsidiary of
the Company.
The above description of the Equity Transfer Agreements does not
purport to be complete and is qualified in its entirety by
reference to such agreements, the English translations of which
are attached hereto as Exhibits 10.1 and 10.2 to this Current
Report on Form 8-K.
Item 1.02 Termination of a Material Definitive Agreement.
The second paragraph of Item 1.01 is incorporated herein.
Item 2.01 Completion of Acquisition or Disposition of Assets.
Acquisition of Linyi Xuefeng
As previously disclosed in the Quarterly Report for the three
months ended on August 31, 2016 on Form 10-Q, on August 4,
2016, Company entered into an agreement with Mr. Li Yuan, the
sole shareholder of Linyi County Xuefeng Renewable Resources
Utilization Technology Co., Ltd (“Linyi Xuefeng”), a company
organized under the laws of the People’s Republic of China, to
purchase his 100% ownership of Linyi Xuefeng. Mr. Li Yuan is
the Chief Executive Officer and main shareholder of the
Company. The purchase price is determined by the audited net
assets of Linyi Xuefeng as of May 31, 2016, with payment of
RMB10,000,000 in cash and the rest to be paid in common shares
of China Xuefeng depending on the 75% closing price of the last
trading day. On October 7, 2016, a supplementary agreement was
entered between both parties to finalized in accordance to the
audited net asset value $ 23,462,612 on May 31, 2016. The
transfer price was $3 per share and 7,820,871 shares in total
to Mr. Li Yuan without cash consideration. Linyi Xuefeng is
primarily engaged in garbage recycling processing and currently
still in development stage without any production.
Upon acquisition, Linyi Xuefeng became a wholly-owned
subsidiary. The acquisition will be accounted for as a business
combination.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
|
Exhibit Number |
Description |
|
10.1 |
English translation of the Equity Transfer Agreement dated January 11, 2016, by and between Li Yuan and Baichuang Information Consulting (Shenzhen) Co. Ltd. |
|
10.2 |
English translation of the Equity Transfer Agreement dated January 11, 2016, by and between Yi Yuan and Baichuang Information Consulting (Shenzhen) Co. Ltd. |
99.1 |
Audited Financial Statements for the years ended May 31, 2016 and 2015 |
99.2 |
Pro forma financial statements. |
About China Xuefeng Environmental Engineering, Inc. (OTCMKTS:CXEE)
China Xuefeng Environmental Engineering Inc. is engaged in providing services to optimize garbage-recycling processes. The Company utilizes its technology of comprehensive and harmless garbage-processing equipment to upgrade software systems and reconstruct hardware for its clients. The comprehensive and harmless garbage processing equipment consists of a waste digestion pretreatment system, methane gas power generation system, sorting processing system, bricklaying building system, leachate treatment system, distribution control system (DCS), XFET-5 ecological and water-saving toilets and excrement comprehensive processing system and various material collection systems. The Company provides equipment improvement and upgrading service and licenses the technology to its customers. The Company also sells or leases garbage-processing units equipped with its technology. It incorporates and installs the technology into garbage-processing equipment’s internal control and operation systems. China Xuefeng Environmental Engineering, Inc. (OTCMKTS:CXEE) Recent Trading Information
China Xuefeng Environmental Engineering, Inc. (OTCMKTS:CXEE) closed its last trading session up +0.03 at 3.79 with 440 shares trading hands.