Kiwa Bio-Tech Products Group Corporation (OTCMKTS:KWBT) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement.
Previously, on October 12, 2018, Kiwa Bio-Tech Products Group Corporation announced that it had received an approval from relevant authorities to obtain a land purchase discount from the Yangling Free Trade Zone to construct a new manufacturing facility to help meet the growing demand in China for bio-fertilizers. The Yangling Free Trade Zone is located in Shaanxi Province in Central China. to the Company’s communications with Yangling Free Trade Zone, the Yangling Government and project investors have sent an official letter requiring that the Company restructure its operations in China and to relocate its activities previously located in Shenzen, Beijing and Shandong to Yangling in order to focus its manufacturing and operating activities in the Yangling Free Trade Zone. Yangling Free Trade Zone has agreed, among other subsidies, to offer Kiwa Bio-Tech approximately US$432,975 (3,000,000 RMB) in incentives for the purchase of land, provide tax preferences for the first three years of production on all income derived from the facility and to promote and market Kiwa’s products to its 326 demonstration planting parks.
In order to take advantage of the valuable incentives agreed by the Yangling Free Trade Zone, Kiwa Bio-Tech has agreed to restructure its operations in China to relocate its activities previously located in Shenzen, Beijing and Shandong to Yangling and focus its manufacturing activities in the Yangling Free Trade Zone. In order to accomplish this, the Company will streamline its corporate structure in China to conduct its business through its wholly-owned subsidiary, Kiwa Bio-Tech (Yangling) Co. Ltd (“Yangling”) and will divest its interest in Kiwa Bio-Tech Asia Holdings (Shenzen) Ltd (“Shenzen”) and all of Shenzen’s subsidiaries except for Kangdu Bio-Tech Hebei Ltd (“Hebei”) and the Institute of Kiwa-Yangling Ecological Agriculture and Environment Research Center Co. Ltd (“Kiwa-Yangling Institute”). Hebei and Kiwa-Yangling Institute will become subsidiaries of Yangling. The Company expects to complete this restructuring and divestiture in early 2019.
The new manufacturing facility in Yangling will specialize in developing and producing Kiwa Bio-Tech’s core microbes, the fundamental components for making high-quality bio-fertilizers. The total facility construction area is approximately 8.77 acres, and will include fermentation and production terminals, agricultural produce sorting facilities and storage, a research and development institute and corresponding ancillary facilities. The construction of the manufacturing facility is expected to be completed in 2020 and have a production capacity of 60,000 tons of Kiwa Bio-Tech’s core microbes. The annual production value is expected to be over US$65 million (approximately 462 million RMB).
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
None
About Kiwa Bio-Tech Products Group Corporation (OTCMKTS:KWBT)
Kiwa Bio-Tech Products Group Corporation develops, manufactures, distributes and markets bio-technological products for agriculture. The Company has acquired technologies to produce and market bio-fertilizer. The Company has developed over six bio-fertilizer products with bacillus spp and/or photosynthetic bacteria as its ingredients. The Company’s products contain ingredients of both photosynthesis and bacillus bacteria. The Company’s products include KiwaBiological Organic Fertilizer, Kiwa Yi Mu Ling, Kiwa Di Fu Kang, Kiwa Microbial Specific Fertilizer For Rice, Kiwa Microbial Specific Fertilizer For Corn, Kiwa Microbial Specific Fertilizer For Potato, Kiwa Microbial Specific Fertilizer For Soybean, Kiwa Microbial Specific Fertilizer For Tea Tree, Kiwa Microbial Specific Fertilizer For Tobacco, Kiwa Microbial Specific Fertilizer For Fruit Trees, Kiwa Microbial Specific Fertilizer For Vegetables and Kiwa Full Effect Type Foliar For Golf Turf.
