UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C 20549
SCHEDULE 14A
(Rule 14a-101)
Proxy Statement Pursuant To Section 14(A)
of the Securities
Exchange Act of 1934
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Check the appropriate box: |
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Preliminary Proxy Statement |
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Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to §240.14a-12 |
KIWA BIO-TECH PRODUCTS GROUP CORPORATION
(Name of Registrant As Specified In Its
Charter)
Payment of Filing Fee (Check the appropriate box):
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
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KIWA
BIO-TECH PRODUCTS GROUP CORPORATION.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 20, 2015
TO THE STOCKHOLDERS OF KIWA BIO-TECH PRODUCTS
GROUP CORPORATION.
You are cordially
invited to attend the Annual Meeting of Stockholders of Kiwa Bio-Tech Products Group Corporation, a Delaware corporation (“Kiwa”
or the “Company”), to be held at the Company’s offices at Room 1702, Building A, Global Trade Center, 36 North
Third Ring Road East, Dongcheng District, Beijing, People’s Republic of China, on November 20, 2015, at _____ local time
(the “Annual Meeting of Stockholders”), for the following purposes:
| 1. | To elect five directors nominated by the Board of Directors to serve a one-year term on the Board
of Directors until the 2016 annual meeting of stockholders and until their respective successors are elected and qualified, or
until their earlier resignation or removal; |
| 2. | To approve a proposal to grant the Board of Directors discretionary authority to amend the Company’s
Certificate of Incorporation, as amended, (“Certificate of Incorporation”) to effectuate a reverse stock split of the
Company’s Common Stock, $0.001 par value per share (“Common Stock”), by a ratio of one-for- two hundred (1:200)
(the “Reverse Split”) and with such Reverse Split to be effective at such time and date, if at all, as determined by
the Board in its sole discretion (the “Certificate of Amendment”); |
| 3. | To ratify the appointment of Paritz & Company, P.A., an independent registered public accounting
firm, as the Company’s independent auditors for fiscal year 2015; and |
| 4. | To transact such other business as may properly come before
the Annual Meeting of Stockholders and any adjournments or postponements thereof. |
On October 2, 2015
we approved the following corporate actions by unanimous written consent of our Board of Directors: (1) Proposal No. 1: The nomination
of our director nominees, (2) Proposal No. 2: The amendment of our Certificate of Incorporation, and (3) Proposal No. 3: The appointment
of Paritz & Company, P.A., as our independent registered public accounting firm.
The Certificate of
Amendment will not be effective until it is filed with the Secretary of State of the State of Delaware. The date of filing of the
Certificate of Amendment will be determined by our Board of Directors.
The Board of Directors
will not consummate the Reverse Split in the event that (i) we fail to receive approval from the stockholders holding a majority
of the outstanding shares of our Common Stock as of the Record Date (defined below) present in person or by proxy at the Annual
Meeting of Stockholders and voting on such matters or (ii) we fail to receive requisite approval of the Reverse Split from the
Financial Industry Regulatory Authority, Inc. (“FINRA”). Subject to the foregoing, such Reverse Split will be consummated,
if at all, as soon as practicable and at such time to be determined by the Board of Directors.
This Proxy Statement
is being issued by the Company and is intended to be mailed on or about October 20, 2015. The Company’s Board of Directors
has fixed the close of business on October 12, 2015, as the record date (“Record Date”) for the Annual Meeting of Stockholders.
This means that only holders of record of the Company’s Common Stock at the close of business on the Record Date will be
entitled to notice of, and to vote at, the Annual Meeting of Stockholders or at any adjournment or postponement of the Annual Meeting
of Stockholders.
Your vote is important.
Whether or not you expect to attend the Annual Meeting of Stockholders, please read the accompanying proxy statement and promptly
vote your proxy by telephone or, if you received a printed form of proxy in the mail, by completing, dating, signing and returning
the enclosed proxy so that your shares may be represented at the Annual Meeting of Stockholders. You may revoke your proxy in the
manner described in the accompanying proxy statement. If you attend the Annual Meeting of Stockholders, you may vote in person
even if you have previously returned your proxy.
By Order of the Board of Directors |
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/s/ Yvonne Wang |
Yvonne Wang |
Secretary |
KIWA BIO-TECH
PRODUCTS GROUP CORPORATION
310 North Indian Hill Blvd, Suite 702
Claremont, California 91711-4611
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
NOVEMBER 20, 2015
This Proxy Statement
is furnished to the holders of Common Stock of Kiwa Bio-Tech Products Group Corporation (“Kiwa” or the “Company”)
in connection with the solicitation of proxies on behalf of the Board of Directors for use at the Company’s Annual Meeting
of Stockholders (the “Annual Meeting of Stockholders”) to be held on November 20, 2015, at ______ local time, at our
offices at Room 1702, Building A, Global Trade Center, 36 North Third Ring Road East, Dongcheng District, Beijing, People’s
Republic of China, or for use at any adjournment or postponement thereof, for the purposes set forth herein and in the accompanying
notice of the Annual Meeting of Stockholders. Only stockholders of record at the close of business on the Record Date are entitled
to notice of and to vote at the Annual Meeting of Stockholders.
The Company’s
Board of Directors has fixed the close of business on October 12, 2015, as the record date (“Record Date”) for the
Annual Meeting of Stockholders. As of the Record Date, there were 400,000,000 issued and outstanding shares of our Common Stock.
Each holder of our Common Stock is entitled to one vote for each share held as of the Record Date with respect to all matters that
may be considered at the Annual Meeting of Stockholders. Stockholder votes will be tabulated by the person(s) appointed by the
Board of Directors to act as inspector(s) of election for the Annual Meeting of Stockholders.
This solicitation
of proxies is made by the Company. We bear the expense of soliciting proxies. Our directors, officers and employees may solicit
proxies personally or by telephone, facsimile, email or other means of communication, and we do not intend to pay additional compensation
for doing so. In addition, we may reimburse banks, brokerage firms, and other custodians, nominees and fiduciaries representing
beneficial owners of our Common Stock for their expenses in forwarding soliciting materials to those beneficial owners.
Our annual report
on Form 10-K for the fiscal year ended December 31, 2014 is enclosed with this proxy statement. The Company’s annual
report on Form 10-K for the fiscal year ended December 31, 2014, as filed with the Securities and Exchange Commission, is also
available from the Company, without charge, upon request made in writing to the Company’s Secretary, Yvonne Wang, at
our principal executive office located at 310 North Indian Hill Blvd, Suite 702, Claremont, California 91711-4611. We
will also furnish any exhibit to the 2014 Annual Report on Form 10-K if specifically requested in writing. A copy of our 2014
Annual Report on Form 10-K is also available on the website of the Securities and Exchange Commission. Your attention is directed
to the financial statements and Management’s Discussion and Analysis in such annual report, which provides additional important
information concerning the Company. This notice of Annual Meeting of Stockholders and proxy statement and form of proxy are being
mailed to our stockholders on or about October 20, 2015.
QUESTIONS
AND ANSWERS ABOUT THE 2015 ANNUAL MEETING OF STOCKHOLDERS
Q:
Who may vote at the Annual Meeting of Stockholders?
A: The
Board of Directors has established October 12, 2015 as the Record Date for the Annual Meeting of Stockholders. If you owned our
Common Stock at the close of business on the Record Date, you may attend and vote at the Annual Meeting of Stockholders. Each stockholder
is entitled to one vote for each share of our Common Stock held on all matters to be voted on. As of the Record Date, there were
400,000,000 shares of our Common Stock outstanding and entitled to vote at the Annual Meeting of Stockholders.
Q:
What is the difference between holding shares as a stockholder of record and as a beneficial owner?
A:
If your shares are registered directly in your name with our transfer agent, Fidelity Transfer Company, you are considered,
with respect to those shares, a “stockholder of record.” If you are a stockholder of record, we have sent these proxy
materials to you directly.
If your
shares are held in a stock brokerage account or by a bank or other holder of record, you are considered the “beneficial owner”
of shares held in street name. In that case, these proxy materials have been forwarded to you by your broker, bank or other holder
of record who is considered, with respect to those shares, the stockholder of record. As the beneficial owner, you have the right
to direct your broker, bank or other holder of record on how to vote your shares by using the voting instruction card included
in the mailing.
Q:
What is the quorum requirement for the Annual Meeting of Stockholders?
A:
The holders of a majority of our outstanding shares of capital stock entitled to vote as of the Record Date must be present
at the Annual Meeting of Stockholders in order for us to hold the meeting and conduct business. This is called a quorum. Your shares
will be counted as present at the meeting if you:
•
Are present and entitled to vote in person at the Annual Meeting of Stockholders; or
•
Have properly submitted a proxy card or voter instruction card in advance of or at the Annual Meeting of Stockholders.
If you
are present in person or by proxy at the meeting, but abstain from voting on any or all proposals, your shares are still counted
as present and entitled to vote. Abstentions and broker non-votes are counted as present at the Annual Meeting of Stockholders
for determining whether we have a quorum. A broker non-vote occurs when a broker returns a proxy but does not vote on a particular
proposal because the broker does not have discretionary voting power for that particular item and has not received voting instructions
from the beneficial owner. With respect to broker non-votes, the shares will not be considered entitled to vote at the Annual Meeting
of Stockholders on non-routine matters, such as (i) the election of directors, (ii) the Reverse Split Proposal, (iii) the proposal
to ratify the appointment of Paritz & Company, P.A., as our independent auditors for fiscal year 2015, which means your broker
may not vote your shares on Items 1, 2 or 3 if you have not given your broker specific instructions as to how to vote. Please be
sure to give specific voting instructions to your broker so that your vote can be counted.
Q:
What proposals will be voted on at the Annual Meeting of Stockholders?
A:
The proposals to be voted on at the Annual Meeting of Stockholders are as follows:
•
Item 1 – To elect five directors nominated by the Board of Directors to serve a one-year term on the Board of Directors set
to expire at the 2016 annual meeting of stockholders and until their respective successors are elected and qualified, or until
their earlier resignation or removal;
•
Item 2 – To approve a proposal to grant our Board of Directors discretionary authority to amend the our Certificate of Incorporation
to effectuate the Reverse Split of the Company’s Common Stock by a ratio one-for- two hundred (1:200) (the “Reverse
Split”) and with such Reverse Split to be effective at such time and date, if at all, as determined by the Board in its sole
discretion (the “Reverse Split Proposal”); and
•
Item 3 – To ratify the appointment of Paritz & Company, P.A., an independent registered public accounting firm, as the
Company’s independent auditors for fiscal year 2015;
We will
also consider any other business that properly comes before the Annual Meeting of Stockholders. As of the Record Date, we are not
aware of any other matters to be submitted for consideration at the Annual Meeting of Stockholders. If any other matters are properly
brought before the Annual Meeting of Stockholders, the persons named in the enclosed proxy card or voter instruction card will
vote the shares they represent using their best judgment.
Q: Is there a deadline to propose actions
for consideration or to nominate individuals to serve as directors?
For a stockholder
proposal to be considered for inclusion in the Company’s proxy statement for the 2015 Annual Meeting of Stockholders, the
written proposal must be received by the Company’s Corporate Secretary at the address below no later than October 14, 2015.
This deadline for inclusion of proposals in the Company’s proxy statement for the Annual Meeting of Stockholders is, we believe,
a reasonable time before the Company begins to print and mail its proxy materials for the Annual Meeting of Stockholders. Such
proposals also will need to comply with Securities and Exchange Commission regulations under Rule 14a-8 regarding the inclusion
of stockholder proposals in company-sponsored proxy materials. Proposals should be addressed to:
Kiwa Bio-Tech Products Group Corporation
ATTN: Corporate Secretary
310 North Indian Hill Blvd Suite 702
Claremont, California 91711-4611
Fax: (909) 992-330
Stockholders
may present proposals that are proper subjects for consideration at the Annual Meeting of Stockholders, even if the proposal is
not submitted by the deadline for inclusion in the proxy statement under Rule 14a-8. To do so, the shareholder must comply with
the procedures specified in the Company's bylaws which have been filed as Exhibit 3.2 to our Current Report on Form 8-K filed with
the Securities and Exchange Commission on July 23, 2004 and are available in print upon request from the Corporate Secretary. Our
bylaws require all stockholders who intend to make proposals at an Annual Meeting of Stockholders to submit their proposals to
the Secretary not less than 60 and not more than 180 days before such Annual Meeting of Stockholders, provided, however, that in
the event that less than 70 days’ notice or prior public disclosure of the date of the meeting is given or made to the stockholders,
notice by the stockholder to be timely must be received not later than the close of business on the 10th day following
the day on which such notice of the date the Annual Meeting of Stockholders was mailed or such public disclosure was made. The
bylaws also provide that nominations for director may only be made by the Board of Directors or by a stockholder entitled to vote
who sends notice to the Corporate Secretary not less than 60 and not more than 180 days before such Annual Meeting of Stockholders,
provided, however, that in the event that less than 70 days’ notice or prior public disclosure of the date of the meeting
is given or made to the stockholders, notice by the stockholder to be timely must be received not later than the close of business
on the 10th day following the day on which such notice of the date the Annual Meeting of Stockholders was mailed
or such public disclosure was made. Any nomination by a stockholder must comply with the procedures specified in the Company's
bylaws.
The Board
of Directors will consider recommendations for candidates to the Board from the Company’s stockholders. A stockholder that
desires to recommend a candidate for election to the Board must direct the recommendation in writing to the address above, including
the candidate’s name, age, home and business contact information, detailed biographical data and qualifications, information
regarding any relationships between the candidate and the Company, written evidence that the candidate is willing to serve as a
director of the Company if nominated and elected and evidence of the nominating person’s ownership of Company Common Stock.
You may
contact the Company’s Corporate Secretary at our principal executive offices for a copy of the relevant provisions regarding
the requirements for making recommendations of director candidates.
Q:
What vote is required to approve each item to be voted on at the Annual Meeting of Stockholders?
A:
Election of directors will be determined by a plurality vote of the combined voting power of all shares of our Common Stock
present in person or by proxy and voting at the Annual Meeting of Stockholders. Accordingly, votes “withheld” from
director-nominee(s), abstentions and broker non-votes will not count against the election of such nominee(s).
With respect
to the Reverse Split Proposal, approval will be determined by the vote of a majority of the shares of our Common Stock issued and
outstanding. With respect to an abstention, the shares will be considered present and entitled to vote at the Annual Meeting of
Stockholders and they will have the same effect as a vote against the matters. With respect to broker non-votes, the shares will
not be considered entitled to vote at the Annual Meeting of Stockholders for such matter and they are not counted in the vote.
Approval
of the proposal to ratify the appointment of Paritz & Company, P.A., as our independent auditors for 2015 fiscal year or any
other matter that may come before the Annual Meeting of Stockholders, will be determined by the vote of a majority of the shares
of our Common Stock present in person or by proxy at the Annual Meeting of Stockholders and voting on such matters. With respect
to an abstention, the shares will be considered present and entitled to vote at the Annual Meeting of Stockholders and they will
have the same effect as votes against the matter.
Our Board
of Directors has not received timely notice (and does not know) of any matters that are to be brought before the Annual Meeting
of Stockholders other than as set forth in the Notice of Annual Meeting of Stockholders.
Q:
How does the Board recommend that I vote?
A:
Our board of directors recommends that you vote as follows:
•
FOR each of the nominees for director named in this Proxy Statement;
•
FOR the approval of the Reverse Split Proposal;
•
FOR the ratification of the appointment of Paritz & Company, P.A., as our independent auditors for fiscal year 2015.
Q:
How may I vote my shares in person at the Annual Meeting of Stockholders?
A:
As the stockholder of record, you have the right to vote in person at the Annual Meeting of Stockholders. As the beneficial
owner, you are also invited to attend the Annual Meeting of Stockholders. Because a beneficial owner is not the stockholder of
record, you may not vote these shares in person at the meeting unless you obtain a “legal proxy” from your broker,
nominee or trustee that holds your shares, giving you the right to vote the shares at the Annual Meeting of Stockholders.
Q:
How can I vote my shares without attending the Annual Meeting of Stockholders?
A:
Whether you hold shares directly as a registered stockholder of record or beneficially in street name, you may vote without
attending the Annual Meeting of Stockholders. If you are the stockholder of record, you may submit your proxy by mail by signing
and dating your proxy card and submitting it in the postage-paid envelope enclosed with this proxy statement. If you are the beneficial
owner of the shares, you have the right to direct your broker, bank or other holder of record on how to vote your shares by using
the voting instruction card included in the mailing.
Q:
How can I change my vote after submitting it?
A:
If you are a stockholder of record, you can revoke your proxy before your shares are voted at the Annual Meeting of Stockholders
by:
•
Filing a written notice of revocation bearing a later date than the proxy with our corporate secretary either before the Annual
Meeting of Stockholders, at our principal executive office located at 310 North Indian Hill Blvd, Suite 702, Claremont, California
91711-4611 or at the Annual Meeting of Stockholders;
•
Duly executing a later-dated proxy relating to the same shares and delivering it to our corporate secretary at our principal executive
office located at 310 North Indian Hill Blvd, Suite 702, Claremont, California 91711-4611 either before the Annual Meeting of Stockholders
or at the meeting and before the taking of the vote; or
• Attending the Annual Meeting of Stockholders and voting in person (although attendance at the Annual Meeting of Stockholders will
not in and of itself constitute a revocation of a proxy).
If you
are a beneficial owner of shares, you may submit new voting instructions by contacting your bank, broker or other holder of record.
You may also vote in person at the meeting if you obtain a legal proxy from your bank, broker or other holder of record as described
in the answer to a previous question.
Q: Can I Require the Company to Purchaser
My Stock?
A: No. Under the General Corporations
Law of the State of Delaware (the “DGCL”), you are not entitled to appraisal and purchase of your stock as a result
of the Reverse Split or any of the other proposals set forth herein.
Q:
Who will solicit proxies on behalf of the Company?
A:
This proxy solicitation is being made on our Company’s behalf by our Board of Directors. We will bear the costs of solicitations
of proxies for the Annual Meeting of Stockholders. We will solicit stockholders by mail through our regular employees, and will
request banks and brokers, and other custodians, nominees and fiduciaries, to solicit their customers who have stock of the Company
registered in the names of such persons and will reimburse them for their reasonable, out-of-pocket costs. In addition
to solicitation by mail, our directors, officers and regular employees may solicit proxies from stockholders by telephone, personal
interview or otherwise. Such directors, officers and employees will not receive additional compensation, but may be reimbursed
for out-of-pocket expenses in connection with such solicitation.
Q:
Where can I find the voting results of the Annual Meeting of Stockholders?
A:
We will announce the voting results at the Annual Meeting of Stockholders. We will also disclose the results in a Current Report
on Form 8-K that will be filed with the United States Securities and Exchange Commission, or Securities and Exchange Commission,
within four business days after the date of the meeting.
ELECTION
OF DIRECTORS
(Item 1)
Five directors are
to be elected at the Annual Meeting of Stockholders, to hold office until the next annual meeting of stockholders and until their
successors are elected and qualified, or until their earlier resignation or removal. The accompanying proxy will be voted in favor
of the following persons to serve as directors unless the stockholder indicates to the contrary on the proxy. We expect
that each of the nominees will be available for election, but if any of them is not a candidate at the time the election occurs,
it is intended that the proxy will be voted for the election of another nominee to be designated by the Board of Directors to fill
any such vacancy. There is no indication at present that any nominee will be unable to accept nomination.
The business address
for each nominee for matters regarding the Company is 310 North Indian Hill Blvd, Suite 702, Claremont, California 91711-4611.
Director- Nominees
The following persons
have been nominated to be elected as directors at the Annual Meeting of Stockholders or until their respective successors are duly
elected and qualified:
Name |
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Age |
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Position |
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Director Since |
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Yvonne Wang |
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37 |
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Secretary |
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Jimmy Ji Zhou |
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48 |
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President, Chief Executive Officer and interim Chief Financial
Officer |
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Lucy Li |
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27 |
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Qi Wang |
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48 |
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Director and Vice President – Technical |
|
2007 |
Yong Chang Wu |
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45 |
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The following biographical
information is provided with respect to each director:
Yvonne Wang – Secretary
Ms. Wang became
our Secretary in September 2005. From April 2003 to September 2005, served as an executive assistant and a manager of the
Company’s U.S. office. Ms. Wang served as a consultant for Mid-America Seeds & Agri-Services in 2014. Mr. Li holds
a Bachelor of Science degree in business administration from the University of PhoenixMr. Li has a wealth of experience in running
businesses, with broad management expertise and a knowledge and understanding of business issues, and is able to provide the Board
of Directors with his insights in running businesses in China.
Jimmy Ji Zhou – Chief Executive
Officer, President and Interim Chief Financial Officer
Mr. Zhou became
our Chief Executive Officer, President and Interim Chief Financial Officer on July 1, 2015. In 1992 Mr. Zhou
served as a manager of an exclusive distributor of one of US products in China. From 2000- 2004, Mr. Zhou served as a financial
advisors in AXA Advisors LLC. In 2007, Mr. Zhou travelled between China and USA as an investment banking consultant to coordinate
processes between Chinese entrepreneurs and Wall-street investment bankers. In 2013, he led a professional team to develop an internet
mall in USA for worldwide members. Mr. Zhou holds a degree from Shanghai International Studies University in China and is a Certified
Estate Planner (CEP) and a Registered Financial Consultant (RFC) Mr. Zhou’s expertise in business consulting, management
and investment banking will provide the Board of Directors with broad expertise in navigating international business transactions.
Lucy Li
From 2011- 2012, Ms.
Li has served as an assistant project manager for SCHSAsia, a boutique business consulting firm specializing in events and project
management for overseas company wishing to expand into the Asia Pacific arena. From 2012 until 2014, Ms. Li served as a campaigner
for WildAid China Office, a non-profit organization with focus on raising public awareness on wildlife and climate change related
issues. Mr. Hu graduated with a bachelor degree in commerce and economics from the University of Toronto in 2011.
Qi Wang – Director and Vice President-Technical
Mr. Wang became
our Vice President - Technical on July 19, 2005 and was elected as one of our directors of the Company on July 18, 2007. Mr. Wang
has also acted as director of Kiwa-CAU R&D Center since July 2006. Mr. Wang served as a Professor and Advisor for Ph.D. students
in the Department of Plant Pathology, China Agricultural University (“CAU”) since January 2005. Prior to that, he served
as an assistant professor and lecturer of CAU since June 1997. He obtained his master degree and Ph.D. in agricultural science
from CAU in July 1994 and July 1997, respectively. Mr. Wang received his bachelor’s degree of science from Inner Mongolia
Agricultural University in July 1989. He is a committee member of various scientific institutes in China, including the National
Research and Application Center for Increasing-Yield Bacteria, Chinese Society of Plant Pathology, Chinese Association of Animal
Science and Veterinary Medicine. Mr. Wang’s unique expertise in the field of agriculture offers significant knowledge and
experience to the Board of Directors when making critical operational decisions.
Yong Chang Wu
Mr. Wu has served
in positions for the Doctor of Agriculture, Ministry of Science and rural information, the National Agricultural Science and Technology
Park and the National Sustainable Development Experimental Zone, Hainan Technology 110 senior government adviser, Chinese Society
for Sustainable Development of sustainable agriculture Professional Committee of the Secretary-General and China Agricultural Research
Association. Mr. Wu has undertaken positions in sustainable agriculture and rural development (Sustainable Agriculture and
Rural Development, SARD), food security and food safety, farming systems and other expert systems design and development work,
research focuses on urban and rural planning and rural information technology projects. Mr. Wu has presided over 16 items
of major national scientific and technological cooperation, research, support, “Spark Program” topics, won 4 of the
provincial awards and provided design for over 20 of the modern agricultural park and regional development planning.
Required Vote
At the Annual Meeting
of Stockholders, the Company’s stockholders will elect as directors the nominees those who receive the highest number of
stockholder votes. The persons elected as directors will serve until the following annual election of directors by the Company’s
stockholders. In accordance with DGCL, abstentions will be counted for purposes of determining the presence or absence of a quorum,
but broker non-votes will not. Abstentions and broker non-votes will not be counted for purposes of determining the number of shares
represented and voted in the election of directors and, accordingly, will not effect the election of directors.
The Board of
Directors recommends a vote FOR each Director Nominee to serve on the Board of Directors. Proxies received by the Board of Directors
will be so voted unless stockholders specify in their proxy a contrary choice.
CORPORATE GOVERNANCE
Information Regarding the Board of Directors
During 2014, the Board
of Directors was composed of four members, limited to, Wei Li, Lianjun Luo, Xucheng Hu and Qi Wang. All corporate actions
undertaken by the Board of Directors require the approval of a majority of the directors in attendance at a meeting at which a
quorum is present.
Our Board of Directors
did not have a meeting during 2014. We do not have a standing audit, nominating or compensation committee. As a small,
development-stage company, we believe that all of our directors acting together, as opposed to a subset of them acting by means
of a committee, is the most efficient and effective framework for us to perform the functions otherwise associated with audit,
nominating and compensation committees.
Each member of our
Board of Directors is expected to participate, either in person or via teleconference, in meetings of the Board of Directors, and
to spend the time necessary to properly discharge such director’s respective duties and responsibilities.
Audit Committee Functions
Since we do not have
an audit committee, the entire Board of Directors acts as the audit committee. The Board has determined that at least
one person on the Board, Lianjun Luo, qualifies as a “financial expert” as defined by Securities and Exchange Commission
rules implementing Section 407 of the Sarbanes-Oxley Act. We do not currently have a written audit committee charter or similar
document.
Based on the review
and discussions the entire Board of Directors, acting as the audit committee, determined that the audited financial statements
be included in the company's annual report on Form 10-K for the twelve months ended December 31, 2014.
Annual Meeting Attendance
All members of the
Board of Directors are required to attend the Annual Meeting of Stockholders.
Family Relationships
Ms. Li, a current
nominee to the Board of Directors, is the daughter of Mr. Wei Li, the former chief executive officer and current chairman of the
board of the Company. Ms. Li has been nominated by the Board of Directors to serve as a member of the Board of Directors, subject
to a plurality vote of the shareholders of the Company as of the Record Date at the Annual Meeting of the Stockholders. Except
for Ms. Li, there are no family relationships among our directors or executive officers.
Involvement in Certain Legal Proceedings
None of our directors
or executive officers has, during the past ten years:
| (a) | Had any bankruptcy petition filed by or against any business of which such person was a general
partner or executive officer either at the time of the bankruptcy or within two years prior to that time; |
| (b) | Been convicted in a criminal proceeding or subject to a pending criminal proceeding; |
| (c) | Been subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated,
of any court of competent jurisdiction or any federal or state authority, permanently or temporarily enjoining, barring, suspending
or otherwise limiting his involvement in any type of business, securities, futures, commodities or banking activities; and |
| (d) | Been found by a court of competent jurisdiction (in a civil action), the Securities and Exchange
Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the
judgment has not been reversed, suspended, or vacated. |
Process for Identifying and Evaluating
Nominees for the Board of Directors
Since we do not have
a nominating committee our Board of Directors acts as the nominating committee. Our Board of Directors may employ a variety of
methods for identifying and evaluating Director Nominees. If vacancies are anticipated or arise, our Board of Directors
considers various potential candidates which may come to our attention through current board members, professional search firms,
stockholders or other persons. These candidates may be evaluated by our Board of Directors at any time during the year.
Our Board of Directors
considers candidates recommended by stockholders when the nominations are properly submitted as described in “Consideration
of Stockholder Recommendations” below. Following verification of the stockholder status of persons proposing
candidates, our Board of Directors will make an initial analysis of the qualifications of any candidate recommended by stockholders
or others pursuant to the criteria summarized herein to determine whether the candidate is qualified for service on the Board of
Directors, before deciding to undertake a complete evaluation of the candidate. If our Board of Directors determines
that additional consideration is warranted, it may use a third-party search firm to gather additional information about the prospective
nominee’s background and experience. Other than the verification of compliance with procedures and stockholder
status, and the initial analysis performed before undertaking a complete evaluation, our Board of Directors will treat a potential
candidate nominated by a stockholder like any other potential candidate.
In evaluating a director
candidate, our Board of Directors will review his or her qualifications including capability, availability to serve, conflicts
of interest, general understanding of business, understanding of the Company’s business and technology, educational and professional
background, personal accomplishment and other relevant factors. Our Board of Directors has not established any specific qualification
standards for director nominees, although from time to time the Board of Directors may identify certain skills or attributes as
being particularly desirable to help meet specific needs that have arisen. Our Board of Directors may also interview prospective
nominees in person or by telephone. After completing this evaluation, the Board of Directors will determine the nominees.
Consideration of Stockholder Recommendations
Our Board of Directors
will consider director candidates recommended by stockholders. Any stockholder wishing to recommend a candidate for
nomination by the Board of Directors should provide the following information in a letter addressed to the Board in care of our
Corporate Secretary: (i) the name and address of the stockholder recommending the person to be nominated; (ii) a representation
that the stockholder is a holder of record of our stock, including the number of shares held and the period of holding; (iii) a
description of all arrangements or understandings between the stockholder and the recommended nominee; (iv) information as to any
plans or proposals of the type required to be disclosed in Schedule 13D and any proposals that the nominee proposes to bring to
the Board of Directors if elected; (v) any other information regarding the recommended nominee that would be required to be included
in a proxy statement filed pursuant to Regulation 14A pursuant to the Securities Exchange Act of 1934 and (vi) the consent of the
recommended nominee to serve as a director if elected. Additional information may be requested to assist our Board of Directors
in determining the eligibility of a proposed candidate to serve as a director. In addition, the notice must meet any other requirements
contained in our bylaws. Stockholders may nominate candidates directly by complying with our bylaws and applicable law,
including the deadlines described under “Stockholder Proposals”, below.
Independence of the Board of Directors
Our Board of Directors
is currently comprised of four members. Wei Li, Lianjun Luo and Qi Wang do not qualify as independent directors in accordance with
the director independence standards set forth in Rule 4200(a)(15) of the Market Place Rules of the Nasdaq Stock Market.
Stockholder Communications with Board
of Directors
Any stockholder or
interested party who wishes to communicate with our Board of Directors or any specific directors may write to Kiwa Bio-Tech Products
Group Corporation, Board of Directors, 310 North Indian Hill Blvd., Suite 702, Claremont, California 91711-4611.
The mailing envelope
must contain a clear notation indicating that the enclosed letter is a “Stockholder-Board Communication” or
“Stockholder-Director Communication”. All such letters must identify the author as a stockholder
and clearly state whether the intended recipients are all members of the Board of Directors or certain specified individual directors. We
will receive and make copies of all such letters and circulate them to the appropriate director or directors.
Compensation of Directors
We currently have
no policy in effect for providing compensation to our directors for their services on our Board of Directors. In fiscal 2014, we
did not provide any compensation to our directors for their service on our Board of Directors. In 2014 Mr. Wei, at the time serving
as an executive officer of the Company, received compensation for his service as an employee of the Company.
Role in Risk Oversight
We administer our
risk oversight function through our Board of Directors. Our Board of Directors is empowered to appoint and oversee our independent
registered public accounting firm, monitor the integrity of our financial reporting processes and systems of internal controls
and provide an avenue of communication among our independent auditors, management and our Board of Directors.
Board Leadership Structure and Departure
of Directors and Officers
The Board has determined
that, at least through the date of our Annual Meeting, the most effective leadership structure for our Company is for Mr. Li
to serve and remain as our Chairman.
On October 2, 2015
the Board determined that at such time that either, (i) the nominated directors, set forth in Proposal 2, or (ii) any individuals
proposed by the Company stockholders for nomination and inclusion in the Company’s proxy statement are elected by a plurality
vote at the Annual Meeting of Stockholders to serve on the Company Board, Mr. Wei Li, Xucheng Hu and Lianjun Luo will formally
tender their resignations and resign from the Board of Directors.
On July 1, 2015, Mr.
Li, formally our President, Chief Executive Officer and Chief Operating Officer, and Mr. Steven Ning Ma, formally our Chief Financial
Officer, resigned from their respective executive positions. Coinciding with the foregoing resignations, the Board of Directors
hired and appointed Jimmy Ji Zhou to serve as the Company’s President, Chief Executive Officer and interim Chief Financial
Officer.
Mr. Zhou is ultimately
responsible for the day-to-day operations of our Company and for execution of our business strategy. Accordingly, the Board believes
that Mr. Zhou’s in-depth knowledge of Company operations and performance, as well as the challenges faced by our Company,
best positions him to identify the strategic issues and risks to be considered by the Board of Directors. The Board retains the
authority to modify this structure to best address our Company’s needs, as and when appropriate.
Related Person Transaction Approval Policy
While we have no written
policy regarding approval of transactions between us and a related person, our Board of Directors, as matter of appropriate corporate
governance, reviews and approves all such transactions to the extent required by applicable rules and regulations. Generally, management
would present any related person transactions proposed to be entered into by us to the Board of Directors for approval. The Board
of Directors may approve the transaction if it is deemed to be in the best interests of our stockholders and the Company.
Code of Ethics
We have adopted a
Code of Business Conduct and Ethics that is applicable to all employees, consultants and members of the Board of Directors, including
the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and Secretary. This code embodies our
commitment to conduct business in accordance with the highest ethical standards and applicable laws, rules and regulations. We
will provide any stockholder a copy of the code, without charge, upon written request to our Secretary.
GRANT
THE BOARD OF DIRECTORS DISCRETIONARY AUTHORITY TO AMEND
THE COMPANY’S CERTIFICATE OF INCORPORATION TO EFFECT A REVERSE SPLIT OF THE COMPANY’S COMMON STOCK
(Item 2)
General
On October 2, 2015
our Board approved the amendment to Article 4 of our Certificate of Incorporation to effect a Reverse Split of our Common Stock
at a ratio of one-for-two hundred (1:200) with such Reverse Split to be effected at such time and date, if at all, as determined
by the Board in its sole discretion. The Board has directed that the Certificate of Amendment be presented to the stockholders
for their approval at the Annual Meeting of Stockholders.
Pursuant to the Reverse
Split, our outstanding shares of Common Stock at the Effective Time of the Reverse Split will be converted at a reverse stock split
ratio of one-for-two hundred (1:200), pursuant to which the 400,000,000 outstanding shares of our Common Stock will be reduced
to and converted into 2,000,000 shares of outstanding Common Stock at the Effective Time (defined below) of the Reverse Split.
As permitted under DGCL, shares of Common Stock that would be converted into less than one share in the Reverse Split will instead,
at the Company’s election, be converted into either of the following: (i) the right to receive a cash payment equal to the
product of such fraction multiplied by the fair market value (as determined by the Board of Directors) of one share of Common Stock,
as of the Effective Time (after giving effect to the foregoing Reverse Stock Split), or (ii) the right to receive a scrip or warrant
in registered form to purchase our Common Stock which shall enable the holder thereof to receive a full share upon the surrender
of such scrip or warrants aggregating a full share.
Our Board of Directors
has the discretion to determine if and when to effect the Reverse Split and may abandon the Reverse Split even if approved by our
stockholders. We expect to consummate the Reverse Split and as soon as practicable, after (i) receiving the vote of a majority
of the shares of our Common Stock issued and outstanding as of the Annual Meeting of Shareholders, and (ii) receiving approval
of the Reverse Split from FINRA.
The Reverse Split
will only become effective upon the accepted filing date of the Certificate of Amendment with the Delaware Secretary of State and
the Company’s receipt of the requisite approval of the Reverse Split from FINRA (the “Effective Time”). The form
of the proposed Certificate of Amendment to effect the Reverse Split is included as Appendix A to this Proxy Statement.
The following discussion is qualified in its entirety by the full text of the Certificate of Amendment.
The Reverse Split
shall be effected for Common Stock on a stock certificate by stock certificate basis, such that any fractional shares of Common
Stock, resulting from the Reverse Split and held by a single record holder shall be aggregated. No fractional shares of Common
Stock shall be issued upon the combination of any such shares in the Reverse Split. If the Reverse Split would result in the issuance
of any fractional share, the Company shall, in lieu of issuing any fractional share, at the Company’s election, be converted
into either of the following: (i) the right to receive a cash payment equal to the product of such fraction multiplied by the fair
market value (as determined by the Board of Directors) of one share of Common Stock, as of the Effective Time (after giving effect
to the foregoing Reverse Stock Split), rounded up to the nearest whole cent or one share of Common Stock, or (ii) the right to
receive a scrip or warrant in registered form to purchase our Common Stock which shall enable the holder thereof to receive a full
share upon the surrender of such scrip or warrants aggregating a full share.
The
Reverse Split shall occur whether or not the certificates representing such shares of Common Stock are surrendered to the Company
or its transfer agent.
The
400,000,000 authorized shares of our common stock, $0.001 par value per share (the “Common Stock”) and 20,000,000 authorized
shares of our preferred stock, $0.001 par value per share (the “Preferred Stock”), and the $0.001 par value of each
share of our Common Stock and Preferred Stock will not be effected as a result of the Reverse Split.
Purpose of the Reverse Split
The principal effect
of the Reverse Split would be to decrease the number of outstanding shares of our Common Stock. See “Potential Disadvantage
of Reverse Split” below. Except for de minimus adjustments that may result from the treatment of fractional shares as
described below, the Reverse Split will not have any dilutive effect on our stockholders since each stockholder would hold the
same percentage of our Common Stock outstanding immediately following the Reverse Split as such stockholder held immediately prior
to the Reverse Split. The relative voting and other rights that accompany the shares of Common Stock would not be effected by the
Reverse Split. The table below sets forth the number of shares of our Common Stock outstanding before and after the Reverse Split
based on 400,000,000 shares of Common Stock outstanding as of the Record Date.
| |
Prior to a Reverse Split | | |
Assuming a one- for-two hundred Reverse Split | |
Aggregate outstanding Number of Shares of Common Stock | |
| 400,000,000 | | |
| 2,000,000 | |
Although the Reverse
Split will not have any dilutive effect on our stockholders, the proportion of shares owned by our stockholders relative to the
number of shares authorized for issuance will decrease because the Reverse Split does not change the current authorized number
of shares of capital stock from 420,000,000 shares, consisting of 400,000,000 shares of Common Stock and 20,000,000 shares of Preferred
Stock. There are currently no shares of Preferred Stock issued and outstanding. The authorized shares of Preferred Stock may be
used for various purposes, including, without limitation, raising capital, providing equity incentives to employees, officers or
directors, effecting stock dividends, establishing strategic relationships with other companies and expanding our business through
the acquisition of other businesses or products. Pursuant to the Reverse Split and the subsequent reduction in the number of outstanding
shares of our Common Stock, our Board of Directors believe that the availability of authorized capital stock as a result of the
Certificate of Amendment will support our projected capital requirements and provide flexibility in raising capital, providing
equity incentives to employees, officers or directors, effecting stock dividends and expanding our business through the acquisition
of other businesses or products. As a result, the number of shares of authorized Common Stock should be maintained at 400,000,000
shares and the number of shares of authorized Preferred Shares should remain at 20,000,000 shares.
Reasons for the Reverse Split
The Board’s
primary objectives in proposing the Reverse Split is to decrease the number of outstanding shares of our Common Stock and provide
the Board with the availability of authorized Common Stock to provide flexibility to effect, among other transactions, public or
private refinancings, acquisitions, stock dividends, stock splits and the granting of equity incentive awards, if necessary or
upon action of the Board. Neither our Board nor the Company currently has intentions of going private. The Reverse Split
is not intended to be a first step in a going private transaction, and will not have the effect of a going private transaction
covered by Rule 13e-3 under the Exchange Act. As of the Record Date we have 435 shareholders of record of our Common Stock. We
are seeking authority to effect the Reverse Split at a ratio of one-for- two hundred (1:200), to be effected at such time and date,
if at all, as determined by the Board in its sole discretion.
Upon receiving stockholder
approval by a majority of the shares of our Common Stock issued and outstanding as of the Record Date, the Board may, in its sole
discretion, file the Certificate of Amendment with the Secretary of State of the State of Delaware and submit an issuer notification
form with FINRA requesting approval of the Reverse Split.
Our Board also has
confidence that the Reverse Split and any resulting increase in the per share price of our Common Stock should enhance the acceptability
and marketability of our Common Stock to the financial community and investing public. Many institutional investors have policies
prohibiting them from holding lower-priced stocks in their portfolios, which reduces the number of potential buyers of our Common
Stock. Additionally, analysts at many brokerage firms are reluctant to recommend lower-priced stocks to their clients or monitor
the activity of lower-priced stocks. Brokerage houses frequently have internal practices and policies that discourage individual
brokers from dealing in lower-priced stocks. Further, because brokers’ commissions on lower-priced stock generally represent
a higher percentage of the stock price than commissions on higher priced stock, investors in lower-priced stocks pay transaction
costs which are a higher percentage of their total share value, which may limit the willingness of individual investors and institutions
to purchase our Common Stock.
Potential Disadvantages of the Reverse Split
We cannot assure you
that the Board of Directors will ultimately determine to effect the Reverse Split or, if effected, that the Reverse Split will
have any of the desired effects described in “Reasons for the Reverse Split” or “Purpose of the Reverse
Split” above. More specifically, we cannot assure you that after the Reverse Split the market price of our Common Stock
will increase proportionately to reflect the ratio for the Reverse Split, that the market price of our Common Stock will not decrease
to its pre-split level, or that our market capitalization will be equal to the market capitalization before the Reverse Split.
As noted above, the
primary purpose of the Reverse Split is to decrease the number of outstanding shares of our Common Stock and provide the Board
of Directors with the availability of authorized Common Stock to provide flexibility to effect, among other transactions, public
or private refinancings, acquisitions, stock dividends, stock splits and the granting of equity incentive awards, if necessary.
While we expect that the reduction in the number of outstanding shares of Common Stock will increase the market price of our Common
Stock, we cannot assure you that the Reverse Split will increase the market price of our Common Stock by an equivalent multiple,
or result in any permanent increase in the market price of our Common Stock. In the event that the Board of Directors issues shares
of Common Stock in the future, we cannot assure you that any such issuances of our Common Stock will not reduce the per share price
of our Common Stock.
The price of our Common
Stock is dependent upon many factors, including our business and financial performance, general market conditions and prospects
for future success. If the per share market price does not increase proportionately as a result of the Reverse Split, then the
value of our Company as measured by our market capitalization will be reduced, perhaps significantly.
Effecting the Reverse Split
Upon receipt of stockholder
approval for the Certificate of Amendment, if our Board of Directors conclude that it is in the best interests of our Company and
our stockholders to effect the Reverse Split, the Certificate of Amendment will be filed with the Secretary of State of the State
of Delaware and the Company will submit an issuer notification form with FINRA requesting approval of the Reverse Split. The actual
timing of the filing of the Amendment with the Secretary of State of the State of Delaware to effect the Reverse Split with the
State of Delaware and the submission of an issuer notification form with FINRA requesting approval of the Reverse Split to effect
the Reverse Split on the OTC Capital Markets will be determined by our Board of Directors. In addition, if for any reason our Board
deems it advisable to do so, the Reverse Split may be abandoned at any time prior to the filing of the Certificate of Amendment
or the submitting the issuer notification form with FINRA, without further action by our stockholders. The Reverse Split will be
effective as of the Effective Time (defined above).
At the Effective Time
and, without further action on our part or our stockholders, the outstanding shares of Common Stock held by stockholders of record
as of the Effective Time would be converted into a lesser number of shares of Common Stock based on a Reverse Split ratio.
Effect on Outstanding Shares, Options and Certain Other Securities
Common Stock
Our Common Stock is
currently registered under Section 12(g) of the Exchange Act, and we are subject to the periodic reporting and other requirements
of the Exchange Act. We do not expect the Reverse Split to effect the registration of our Common Stock under the Exchange Act.
Our Common Stock is currently quoted under the symbol “KWBT” in the over-the-counter markets, including the OTC Markets
Group Pink Limited Information Tier. The Reverse Split will not be implemented until we receive the requisite approval from FINRA.
If the Reverse Split
is implemented, the number of shares our Common Stock owned by each stockholder will be reduced in the same proportion as the reduction
in the total number of shares outstanding, such that the percentage of our Common Stock owned by each stockholder will remain unchanged
except for any de minimus change resulting from cash in lieu of any fractional shares that such stockholder would have received
as a result of the Reverse Split. The number of shares of our Common Stock that may be purchased upon exercise of outstanding options
or other securities convertible into, or exercisable or exchangeable for, shares of our Common Stock, and the exercise or conversion
prices for these securities, will also be ratably adjusted in accordance with their terms as of the Effective Time.
The following table
depicts the prospective effects of the Reverse Split on the number of shares of our Common Stock outstanding, the number of shares
of our Common Stock reserved for future issuance and the number of authorized but unissued and unreserved shares of our Common
Stock that would be available for issuance after the Reverse Split. As discussed above, the number of shares of our Common Stock
authorized for issuance under our Certificate of Incorporation would remain uneffected by the Reverse Split.
| |
Common Stock Outstanding (1) | | |
Shares Reserved for Issuance | | |
Shares Available for Issuance (4) | |
Prior to the Reverse Split | |
| 400,000,000 | | |
| 140,777,074 | (2) | |
| 0 | |
Pro-forma the Reverse Split | |
| 2,000,000 | | |
| 703,886 | (3) | |
| 397,296,115 | |
(1) |
|
Does not give effect to any changes resulting from the payment of cash in lieu of issuing fractional shares pursuant to the Reverse Split. |
|
|
|
(2) |
|
Represents the following: (i) 3,047,907 shares of Common Stock reserved for issuance pursuant to the Plan; (ii) 137,729,167 shares of Common Stock reserved for issuance upon conversion of the 6% Notes convertible securities described below. |
|
|
|
(3) |
|
Represents shares reserved for issuance
after giving effect to adjustments resulting from the Reverse Split: (i) 15,239.535 shares of Common Stock reserved for issuance
pursuant to the Plan; (ii) 688,645.835 shares of Common Stock reserved for issuance upon conversion of the 6% Notes convertible
securities described below.
|
|
|
|
(4) |
|
Represents the total number of shares of authorized Common Stock that will be neither outstanding nor reserved for issuance, but without giving effect to any changes resulting from the payment of cash in lieu of fractional shares. |
Convertible Securities
On
June 29, 2006, we entered into a securities purchase agreement with six institutional investors (the “Securities Purchase
Agreement”) for the issuance and sale of 6% secured convertible notes, due three years from the date of issuance, in the
aggregate principal amount of $2,450,000 (the “6% Notes”), convertible into shares of the Company’s common stock.
The
conversion price of the 6% Notes is based on a 40% discount to the average of the trading price of our Common Stock over a 20-day
trading period. The conversion price is also adjusted for certain subsequent issuances of equity securities of the Company at prices
below the conversion price then in effect. The 6% Notes contain a volume limitation that prohibits the holder from further converting
the 6% Notes if doing so would cause the holder and its affiliates to hold more than 4.99% of the Company’s outstanding common
stock. In addition, each holder of the 6% Notes agrees that they may not convert more than their pro-rata share (based on original
principal amount) of the greater of $120,000 principal amount of the 6% Notes per calendar month or the average daily dollar volume
calculated during the 10 business days prior to a conversion, per conversion. This conversion limit has since been eliminated pursuant
to an agreement by the Company and the purchasers.
Pursuant
to the 6% Notes, the Company entered into a settlement agreement and release with four of the purchasers of the Company’s
6% Notes and outstanding 2% Notes. Pursuant to the terms of the Release, the Company paid four of the Purchasers $75,000 for a
full release, including the forgiveness of past defaults of unpaid principal amounts, interest and penalties.
As
of December 31, 2014, 2% Notes have been fully settled. As of December 31, 2014, principal amount of 6% Notes outstanding was $150,250;
interest amount outstanding was $138,224; amount of standard liquidation damages was $332,600.
The 6% Notes shall
be subject to equitable adjustments for the Reverse Split, if applicable, whereby the conversion price shall be calculated at a
variable conversion price by applying the market price, as determined by the average of the lowest three (3) trading prices for
our Common Stock during a twenty (20) trading day period ending one trading day prior to the date the conversion notice. While
it is expected that the reduction in the number of outstanding shares of Common Stock will increase the market price of our Common
Stock, as stated in “Purpose of the Reverse Split” above, thereby impacting the variable conversion price of
the 6% Notes, we cannot assure that the Reverse Split will have such effect or subsequently increase the market price of our Common
Stock by an equivalent multiple, result in any permanent increase in the market price of our Common Stock, or adjust the variable
conversion price of the 6% Notes.
Options and Warrants
We currently have
outstanding options to purchase an aggregate of 1,232,600 shares of our Common Stock at an exercise price of $0.175 per share,
subject to adjustments.
There are 3,047,907
underlying shares of our Common Stock required to be reserved for issuance upon the exercise of options and other stock awards
under the Plan. See “2004 Stock Incentive Plan” below.
If the Reverse Split
is implemented, the number of shares of Common Stock reserved for issuance of options and other stock awards under the Plan will
be reduced from 3,047,907 to approximately 15,240 shares reserved for issuance of options and other stock awards under the Plan.
We currently have
no warrants outstanding.
Exchange of Stock Certificates
As of the Record Date,
we had 435 holders of record of our Common Stock (although we have significantly more beneficial holders). We do not expect the
Reverse Split to result in a significant reduction in the number of record holders. We presently do not intend to seek any change
in our status as a reporting company for federal securities law purposes, either before or after the Reverse Split, except to have
our Common Stock moved from a registration pursuant to Section 12(g) to Section 12(b) under the Exchange Act.
On or after the Effective
Time, we will mail a letter of transmittal to each stockholder. Each stockholder will be able to obtain a certificate evidencing
his, her or its post-Reverse Split shares only by sending Fidelity Transfer Company, as our transfer agent, the stockholder’s
old stock certificate(s), together with the properly executed and completed letter of transmittal and such evidence of ownership
of the shares as we may require. Stockholders will not receive certificates for post-Reverse Split shares unless and until their
old certificates are surrendered. Stockholders should not forward their certificates to the exchange agent until they receive the
letter of transmittal, and they should only send in their certificates with the letter of transmittal. The exchange agent will
send each stockholder a new stock certificate after receipt of that stockholder’s properly completed letter of transmittal
and old stock certificate(s).
Stockholders who hold
shares in street name through a nominee (such as a bank or broker) will be treated in the same manner as stockholders whose shares
are registered in their names, and nominees will be instructed to effect the Reverse Split for their beneficial holders. However,
nominees may have different procedures and stockholders holding shares in street name should contact their nominees. Stockholders
will not have to pay any service charges in connection with the exchange of their certificates.
Authorized Shares
If and when our Board
elects to effect the Reverse Split, the authorized number of shares of our Common Stock will remain at 400,000,000. Accordingly,
there will be no reduction in the number of authorized shares of our Common Stock in proportion to the Reverse Split ratio. As
a result, the proportion of shares owned by our stockholders relative to the number of shares authorized for issuance will decrease
and the additional authorized shares of Common Stock will be available for issuance at such times and for such purposes as our
Board may deem advisable without further action by our stockholders, except as required by applicable laws and regulations.
The Reverse Split
will have no effect on our authorized Preferred Stock because there are no shares of Preferred Stock currently outstanding.
Anti-Takeover and Dilutive Effects
The purpose of maintaining
our authorized Common Stock at 400,000,000 after the Reverse Split is to facilitate our ability to raise additional capital to
support our operations, not to establish any barriers to a change of control or acquisition of our Company. The shares of Common
Stock that are authorized but unissued provide our Board with flexibility to effect, among other transactions, public or private
refinancings, acquisitions, stock dividends, stock splits and the granting of equity incentive awards. However, these authorized
but unissued shares may also be used by our Board, consistent with and subject to its fiduciary duties, to deter future attempts
to gain control of us or make such actions more expensive and less desirable. The Reverse Split would give our Board authority
to issue additional shares from time to time without delay or further action by the stockholders except as may be required by applicable
law or the rules of the applicable Exchange. The Reverse Split is not being recommended in response to any specific effort of which
we are aware to obtain control of us, nor does our Board have any present intent to use the authorized but unissued Common Stock
to impede a takeover attempt. There are no plans or proposals to adopt other provisions or enter into any arrangements that have
material anti-takeover effects.
In addition, the issuance
of additional shares of Common Stock for any of the corporate purposes listed above could have a dilutive effect on earnings per
share and the book or market value of our outstanding Common Stock, depending on the circumstances, and would likely dilute a stockholder’s
percentage voting power in us. Holders of our Common Stock are not entitled to preemptive rights or other protections against dilution.
Our Board intends to take these factors into account before authorizing any new issuance of shares.
Accounting Consequences
As of the Effective
Time, the stated capital attributable to Common Stock on our balance sheet will be reduced proportionately based on the Reverse
Split ratio (including a retroactive adjustment of prior periods), and the additional paid-in capital account will be credited
with the amount by which the stated capital is reduced. Reported per share net income or loss will be higher because there will
be fewer shares of our Common Stock outstanding.
Federal Income Tax Consequences
The following summary
describes certain material U.S. federal income tax consequences of the Reverse Split to holders of our Common Stock. This summary
addresses the tax consequences only to a beneficial owner of our Common Stock that is a citizen or individual resident of the United
States, a corporation organized in or under the laws of the United States or any state thereof or the District of Columbia or otherwise
subject to U.S. federal income taxation on a net income basis in respect of our Common Stock (a “U.S. holder”). This
summary does not address all of the tax consequences that may be relevant to any particular stockholder, including tax considerations
that arise from rules of general application to all taxpayers or to certain classes of taxpayers or that are generally assumed
to be known by investors. This summary also does not address the tax consequences to persons that may be subject to special treatment
under U.S. federal income tax law or persons that do not hold our Common Stock as “capital assets” (generally, property
held for investment). This summary is based on the provisions of the Internal Revenue Code of 1986, as amended, U.S. Treasury regulations,
administrative rulings and judicial authority, all as in effect as of the date hereof. Subsequent developments in U.S. federal
income tax law, including changes in law or differing interpretations, which may be applied retroactively, could have a material
effect on the U.S. federal income tax consequences of the Reverse Split.
If a partnership (or
other entity classified as a partnership for U.S. federal income tax purposes) is the beneficial owner of our Common Stock, the
U.S. federal income tax treatment of a partner in the partnership will generally depend on the status of the partner and the activities
of the partnership. Partnerships that hold our Common Stock, and partners in such partnerships, should consult their own tax advisors
regarding the U.S. federal income tax consequences of the Reverse Split.
Each stockholder should
consult his, her or its own tax advisor regarding the U.S. federal, state, local and foreign income and other tax consequences
of the Reverse Split.
The Reverse Split
should be treated as a recapitalization for U.S. federal income tax purposes. Therefore, no gain or loss should be recognized by
a U.S. holder upon the Reverse Split. Accordingly, the aggregate tax basis in the Common Stock received pursuant to the Reverse
Split should equal the aggregate tax basis in the Common Stock surrendered and the holding period for the Common Stock received
should include the holding period for the Common Stock surrendered.
No Appraisal Rights
Under the DGCL, our
stockholders are not entitled to appraisal rights with respect to the Reverse Split, and we will not independently provide our
stockholders with any such rights.
Text of Proposed Amendment; Effectiveness
The text of the proposed
Certificate of Amendment is set forth in Appendix A to this Proxy Statement. If and when effected by our Board of Directors, will
become effective at the Effective Time.
Required Vote
Approval of the Certificate
of Amendment requires the affirmative vote of a majority of the issued and outstanding shares of Common Stock voting as one class.
Abstentions are considered present for purposes of establishing a quorum but will count as a vote against the Certificate of Amendment.
Financial Information
Our audited consolidated
financial statements and accompanying notes filed with our Annual Report on Form 10-K for the year ended December 31, 2014, as
amended (our “Annual Report”), are incorporated herein by reference.
Our unaudited condensed
consolidated interim financial statements and accompanying notes filed with our Quarterly Report on Form 10-Q for the period ended
March 31, 2015 (our “Quarterly Report”), are incorporated herein by reference.
Item 7 of Part II
of our Annual Report “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
is incorporated herein by reference.
Item 2 of Part I of
our Quarterly Report “Management’s Discussion and Analysis of Financial Condition and Results of Operations”
is incorporated herein by reference.
The Board of
Directors unanimously recommends a vote “FOR” the approval, of the Certificate of Amendment, as disclosed in this proxy
statement.
RATIFICATION
OF APPOINTMENT OF INDEPENDENT AUDITORS
(Item 3)
The Board of Directors
have selected Paritz & Company, P.A., as our independent registered public accounting firm for the fiscal year ending December
31, 2015 and has further directed that the appointment of Paritz & Company, P.A., as our independent registered public accounting
firm be submitted to our stockholders for ratification at the Annual Meeting of Stockholders.
The appointment of
Paritz & Company, P.A., to serve as our independent registered public accounting firm for the fiscal year ending December 31,
2015 was approved in August 2015 by unanimous written consent of the Board of Directors.
Neither our by-laws nor any other governing
document or law require stockholder ratification of the appointment of Paritz & Company, P.A., as our independent registered
public accounting firm. However, the appointment of Paritz & Company, P.A., is being submitted to our stockholders for ratification
as a matter of good corporate practice. If the stockholders fail to ratify the appointment, the Board of Directors will reconsider
whether or not to retain Paritz & Company, P.A. Even if the appointment is ratified, the Board of Directors, in its discretion,
may direct the appointment of a different independent registered public accounting firm at any time during the year if they determine
that such a change would be in the best interests of our stockholders.
Principal Accounting Audit Fees and Services
Paritz & Company,
P.A., audited our financial statements for year-end 2014, and reviewed our quarterly reports on Form 10-Q. Since we do not have
a formal audit committee, our Board of Directors approved the engagement of Paritz & Company, P.A., before engaging its services.
All of the services described below were approved by our Board prior to performance of such services.
The aggregate audit
fees for 2014 and 2013 paid and payable to Paritz & Company, P.A., were approximately $32,000 and $40,000, respectively. The
amounts include fees for professional services rendered by Paritz & Company, P.A., in connection with: (1) the audit of our
consolidated financial statements; and (2) reviews of our quarterly reports on the Form 10-Q.
The following table shows the fees billed
by Paritz & Company, P.A., for audit and other services provided for the fiscal year ended December 31, 2014. All of the services
described in the following fee table were approved in conformity with the audit committee’s pre-approval process.
Type of Fee | |
2014 | |
Audit Fees(1) | |
$ | 32,000 | |
Audit Related Fees(2) | |
| — | |
Tax Fees(3) | |
| 2,750 | |
All Other Fees(4) | |
| — | |
Total | |
$ | 34,750 | |
Type of Fee | |
2013 | |
Audit Fees(1) | |
$ | 40,000 | |
Audit Related Fees(2) | |
| — | |
Tax Fees(3) | |
| — | |
All Other Fees(4) | |
| — | |
Total | |
$ | 40,000 | |
(1)
Audit Services – This category includes the audit of the Company’s annual financial statements and services that are
normally provided by independent auditors in connection with the engagement for fiscal years.
(2)
Audit Related Services – This category consists of fees reasonably related to the performance of the audit or review of the
Company’s financial statements that are not reported as “Audit Fees.”
(3)
Tax Services – This category consists of tax compliance, tax advice and tax planning work.
(4)
All Other Fees – This category consists of fees for other miscellaneous items.
Required Vote
Ratification of the
appointment of the independent auditors requires the affirmative vote of the holders of a majority of the shares of Common Stock
present or represented by proxy and entitled to vote on such matter at the Annual Meeting of Stockholders.
Auditors’ Attendance at the Annual
Meeting
A representative of
Paritz & Company, P.A., the independent auditor of the Company for the year ending December 31, 2015, is expected to be present
at the Annual Meeting of the Stockholders. The representative will be given the opportunity to make a statement at the Annual Meeting
of Stockholders and is expected to be available to respond to appropriate questions.
The Board of
Directors recommends a vote FOR this proposal. Proxies received by the Board of Directors will be so voted unless stockholders
specify in their proxy a contrary choice.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section 16(a) of the
Exchange Act requires our directors, executive officers and ten percent stockholders to file initial reports of ownership and reports
of changes in ownership of our Common Stock with the SEC. Directors, executive officers and ten percent stockholders are also required
to furnish us with copies of all Section 16(a) forms that they file. To the best of the Company’s knowledge, based solely
upon a review of the copies of such reports, the Company believes that all Section 16(a) filing requirements applicable to its
officers, directors and certain other shareholders were complied with during the fiscal year ended December 31, 2014.
EXECUTIVE
COMPENSATION AND OTHER MATTERS
We currently have
no Compensation Committee. The Board of Directors is currently performing the duties and responsibilities of Compensation Committee.
In addition, we have no formal compensation policy. We decide on our executives’ compensation based on average compensation
levels of similar companies in the U.S. or China, depending on consideration of many factors such as where the executive works.
Our Chief Executive Officer’s compensation is approved by the Board of Directors. Other named executive officers’ compensation
are proposed by our Chief Executive Officer and approved by the Board of Directors.
Our Stock Incentive
Plan is administered by the Board of Directors. Any amendment to our Stock Incentive Plan requires majority approval of the stockholders
of the Company.
The Company had no
officers or directors whose total compensation during either 2014 or 2013 exceeded $100,000.
Currently, the main
forms of compensation provided to each of our executive officers are: (1) annual salary; (2) non-equity Incentive Plan; and (3)
the granting of incentive stock options subject to approval by our Board of Directors.
SUMMARY COMPENSATION TABLE
FOR 2013 AND 2014
Name and Principal Position | |
Year | |
Salary ($) | | |
Bonus ($) | | |
All Other Compensation ($) | | |
Total ($) | |
Wei Li, CEO | |
2014 | |
| 72,000 | | |
| - | | |
| - | | |
| 72,000 | |
| |
2013 | |
| 72,000 | | |
| - | | |
| - | | |
| 72,000 | |
Steven Ning Ma, CFO | |
2014 | |
| 74,400 | | |
| - | | |
| - | | |
| 74,400 | |
| |
2013 | |
| 74,400 | | |
| - | | |
| - | | |
| 74,400 | |
Outstanding Equity Awards at 2014 Fiscal Year-End
The following table sets forth the status of all outstanding
equity awards of the Company as of December 31, 2014.
Option Awards | |
Stock Awards | |
Name | |
Number of
Securities Underlying
Unexercised Options
(#) Exercisable | | |
Number of
Securities Underlying
Unexercised Options
(#) Unexercisable | | |
Equity
Incentive Plan
Awards: Number
of Securities Underlying
Unexercised Unearned
Options (#) | | |
Option
Exercise Price
($) | | |
Option
Expiration Date | | |
Number
of Shares
or Units of
Stock That
Have Not
Vested (#) | | |
Value
of Shares
or Units
of Stock
That Have
Not Vested
($) | | |
Equity
Incentive Plan
Awards: Number
of Unearned
Shares, Units
or Other Rights
That Have
Not Vested (#) | | |
Equity
Incentive Plan
Awards: Market
or Payout Value
of Unearned Shares,
Units or Other
Rights That
Have Not Vested
(#) | |
(a) | |
| (b) | | |
| (c) | | |
| (d) | | |
| (e) | | |
| (f) | | |
(g) | | | |
(h) | | |
| (i) | | |
| (j) | |
Wei Li | |
| 182,800 | | |
| Nil | | |
| 182,800 | | |
| 0.175 | | |
| 12/04/16 | |
| Nil | | |
| Nil | | |
| Nil | | |
| Nil | |
Steven Ning Ma | |
| Nil | | |
| Nil | | |
| Nil | | |
| Nil | | |
| N/A | | |
Nil | | | |
Nil | | | |
Nil | | | |
Nil | | |
Option Exercises and Stock Vested
No stock options were exercised by any officers or directors
during 2014 and 2013. We did not adjust or amend the exercise price of any stock options previously awarded to any named executive
officers during 2014 and 2013.
Option Awards |
| Stock Awards | |
Name | |
| Number of Shares Acquired on Exercise (#) | | |
| Value Realized on Exercise ($) | | |
| Number of Shares Acquired on Vesting (#) | | |
| Value Realized on Vesting ($)
| |
(a) | |
| (b) | | |
| (c) | | |
| (d) | | |
| (e) | |
Wei Li | |
| - | | |
| - | | |
| - | | |
| - | |
Steven Ning Ma | |
| - | | |
| - | | |
| - | | |
| - | |
Equity Compensation Plan Information
The following table sets forth certain information as of December
31, 2014 about our equity compensation plans under which our equity securities are authorized for issuance.
Plan category | |
Number of securities to be issued upon exercise of outstanding options, warrants and rights | | |
Weighted-average exercise price of outstanding options, warrants and rights | | |
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) | |
| |
(a) | | |
(b) | | |
(c) | |
Equity compensation plans approved by security holders | |
| 1,232,600 | | |
$ | 0.175 | | |
| 767,400 | |
Equity compensation plans not approved by security holders | |
| - | | |
| - | | |
| | |
Total | |
| 1,232,600 | | |
| - | | |
| 767,400 | |
Stock Incentive Plan
On May 10, 2004, our
Board of Directors approved equity incentive awards to our certain directors, officers and employees and/or consultants and adopted,
subject to stockholder approval, our 2004 Stock Incentive Plan (the “2004 Plan”). Our stockholders approved the 2004
Plan on June 3, 2004, and an amendment to the Plan on September 12, 2006 (together with the 2004 Plan, the “Plan”).
There are 3,047,907 shares reserved for issuance of options and other stock awards under the Plan. The number of shares that may
be granted to any participant in a fiscal year is 500,000. Options issued under the Plan will expire not more than ten years from
the date of grant.
The Plan is a key
aspect of our compensation program, designed to attract, retain, and motivate the highly qualified individuals required for our
long-term success.
Stock Option Grant
On December 12, 2006,
our Board of Directors granted 2,000,000 options under the Plan, of which 823,700 shares were granted to the former executive officers
and directors. The exercise price was $0.175, equal to the closing price of our Common Stock on December 12, 2006. Pursuant to
the approval of Board of Directors, after each of the first and second anniversaries of the grant date, 33% percent of the options
will become exercisable. After the third anniversary of the grant date, 34% of the options will become exercisable.
No options were granted
under the Plan during 2014.
Qualified Performance-Based Compensation
The Board of Directors
may determine, in its discretion, whether a bonus award should be “qualified performance-based compensation” under
Section 162(m) of the Internal Revenue Code (the “Code”) and may take such actions as it deems necessary to ensure
that such bonus award will so qualify. Any such bonus award will be subject to any additional limitation set forth in Section 162(m)
of the Code (including any amendments thereto) or any regulations or rulings issued thereunder, and the bonus plan will be deemed
amended to the extent necessary to conform to such requirements.
Employment Contracts and Termination of Employment and Change
of Control Arrangements
On February 6, 2012,
we entered into an Employment Agreement between the Company and Mr. Li, former President and Chief Executive Officer of the Company,
for a term of three years beginning January 1, 2012. Pursuant to the Agreement Mr. Li was entitled to an annual salary of $72,000
and a performance bonus of $24,000.
On February 6, 2012,
we entered into an Employment Agreement between the Company and Mr. Ma, former Chief Financial Officer of the Company, for a term
of three years beginning January 1, 2012. Pursuant to the Agreement Mr. Ma was entitled to an annual salary of $70,000.
On July 1, 2015, Mr.
Li resigned as President, Chief Executive Officer and Chief Operating Officer and Mr. Ma resigned as Chief Financial Officer of
the Company. Effective as of July 1, 2015 upon the resignations of Mr. Li and Mr. Ma, the Company appointed Mr. Jimmy Ji Zhou as
the Company’s President, Chief Executive officer and interim Chief Financial Officer.
On July 1, 2015, the Company entered into
a three-year employment agreement with Mr. Zhou. After the initial three-year term and assuming his employment agreement
has not been terminated for cause, Mr. Zhou may remain as a consultant to the Company. Mr. Zhou’s annual salary is $84,000
and is subject to annual increase as determined by the Board of Directors. Mr. Zhou is eligible, at the discretion of our
Board of Directors, to receive an annual cash bonus based on performance. Mr. Zhou is entitled to receive stock options or
other equity incentive awards under our Plan, as and when determined by the Board of Directors, and is entitled to receive other
fringe benefits that may be provided to, and is eligible to participate in any other bonus or incentive program established by
the Company, for its executives.
There are no compensatory plans or arrangements
with respect to a named executive officer that would result in payments or installments in excess of $100,000 upon the resignation,
retirement or other termination of such executive officer's employment with us or from a change-in-control.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Securities and Exchange
Commission rules require us to disclose any transaction or currently proposed transaction in which we are a participant and in
which any related person has or will have a direct or indirect material interest involving the lesser of $120,000.00 or one percent
(1%) of the average of our total assets as of the end of last two completed fiscal years. A related person is any executive officer,
director, nominee for director, or holder of 5% or more of our Common Stock, or an immediate family member of any of those persons.
Amounts due to related
parties consisted of the following as of December 31, 2014:
Item | |
Nature | | |
Notes | | |
December 31, 2014 | |
| |
| | |
| | |
| |
Mr. Wei Li ("Mr. Li") | |
Non-trade | | |
(1) | | |
$ | 3,553,939 | |
Kangtai Xinnong Agriculture Tech (Beijing) Co., Ltd. (“Kangtai”) | |
Non-trade | | |
(2) | | |
| (13,624 | ) |
Ms. Yvonne Wang ("Ms. Wang") | |
Non-trade | | |
(3) | | |
| 650,000 | |
Subtotal | |
| | | |
| | | |
| 4,190,315 | |
| |
| | | |
| | | |
| | |
Kiwa-CAU R&D Center | |
Trade | | |
(4) | | |
| 1,025,057 | |
Subtotal | |
| | | |
| | | |
| 1,025,057 | |
Total | |
| | | |
| | | |
$ | 5,215,372 | |
(1) Mr. Li
Mr. Li is the Chairman of the Board and
was the former Chief Executive Officer and President of the Company until his effective resignation on July 1, 2015 from the foregoing
executive positions.
| (a) | During the year ended December 31, 2014, Mr. Li paid various expenses on behalf of the Company.
As of December 31, 2014, the balance due to Mr. Li was $3,553,939. Mr. Li has waived his contractual right to payment on
such loan advances to the Company and has agreed that the Company may repay the balance when its cash flow circumstance allows. |
| (b) | On June 29, 2006, the Company entered into a securities purchase agreement for the issuance and
sale of (1) 6% Notes, due three years from the date of issuance, convertible into shares of the Company’s Common Stock, and
(2) warrants to purchase 12,250,000 shares of the Company’s Common Stock. The Company’s obligations under the 6% Notes
and the warrants are secured by a first priority security interest in the Company’s intellectual property, and by a first
priority security interest in all of the Company’s other assets pursuant to a security agreement. In addition, Mr. Li has
pledged without any compensation from the Company all of his Common Stock of the Company as collateral for the Company’s
obligations under the 6% Notes. |
| (c) | Mr. Li is a principal stockholder of All Star Technology Inc., a Delaware corporation, which holds
12,356,672 shares of our Common Stock. Mr. Li exercises voting and investment control over such shares and may be deemed a beneficial
holder thereof. |
(2) Kangtai
| (a) | Kangtai, formerly named Kangtai International Logistics (Beijing) Co., Ltd., Kangtai Xinnong Agriculture
Tech (Beijing) Co., Ltd., is a private company, 28% owned by Mr. Li. Mr. Li is the Chairman of Kangtai. |
| (b) | The balance due from Kangtai on December 31, 2014 was $13,624. |
(3) Ms. Wang
| (a) | Ms. Wang is the Secretary of the Company. |
| (b) | During the year ended December 31, 2014, Ms. Wang paid various expenses on behalf of the Company.
As of December 31, 2014, the amount due to Ms. Wang was $650,000. Ms. Wang has agreed that the Company may repay the balance when
its cash flow circumstance allows. |
(4) Kiwa-CAU R&D Center
| (a) | In November 2006, Kiwa and China Agricultural University (the “CAU”) agreed to jointly
establish a new research and development center, named Kiwa-CAU R&D Center. The term of the agreement was ten years commencing
July 1, 2006. |
| (b) | Pursuant to the agreement, Kiwa agree to invest RMB 1 million (approximately $162,715) each year
to fund research at Kiwa-CAU R&D Center. Qi Wang, a director of the Company, is also the director of Kiwa-CAU R&D Center. |
| (c) | During the year ended December 31, 2014, $162,715 was charged to research and development expenses
under the agreement with Kiwa-CAU R&D Center. The Company paid nil to Kiwa-CAU R&D Center in the year 2014. |
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Beneficial ownership
is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. In accordance with Securities and Exchange Commission rules, shares of our Common Stock which
may be acquired upon exercise of stock options or warrants which are currently exercisable or which become exercisable within 60
days of the date of the table below are deemed beneficially owned by the holders of such options and warrants and are deemed outstanding
for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of
computing the percentage of ownership of any other person. Subject to community property laws, where applicable, the persons or
entities named in the tables below have sole voting and investment power with respect to all shares of our Common Stock indicated
as beneficially owned by them.
The following table
sets forth as of October 12, 2015 certain information with respect to the beneficial ownership of our Common Stock by (i) each
of our executive officers, (ii) each person who is known by us to beneficially own more than 5% of our outstanding Common Stock,
and (iii) all of our directors and executive officers as a group. Percentage ownership is calculated based on 400,000,000 shares
of our Common Stock outstanding as of October 12, 2015. None of the shares listed below are issuable pursuant to stock options
or warrants of the Company.
Name
and Address of Beneficial Owner | |
Title | |
Beneficially Owned | | |
Percent of Class | |
Officers and Directors | |
| |
| | |
| |
Wei Li (1) | |
Director and Chairman of the Board | |
| 13,064,794 | (1) | |
| 3.3 | % |
Jimmy Ji Zhou | |
President, Chief Executive Officer and interim Chief Financial Officer | |
| - | | |
| - | |
Lianjun Luo | |
Director | |
| - | | |
| - | |
Xucheng Hu | |
Director | |
| - | | |
| - | |
Qi Wang | |
Director and Vice President- Technical | |
| - | | |
| - | |
Yvonne Wang | |
Secretary | |
| - | | |
| - | |
Officers and Directors as a Group (total of 6 persons) | |
| |
| 13,064,794 | | |
| 3.3 | % |
5% Stockholders | |
| |
| | | |
| | |
| (1) | Includes 12,356,672 shares of common stock (3.1% of all shares outstanding) held by All Star Technology Inc., a British Virgin
Islands international business company. Wei Li exercises voting and investment control over the shares held by All Star Technology
Inc. Wei Li is a principal stockholder of All Star Technology Inc. and may be deemed to beneficially own such shares, but disclaims
beneficial ownership in such shares held by All Star Technology Inc. except to the extent of his pecuniary interest therein. Mr.
Li has pledged all of his common stock of the Company as collateral security for the Company’s obligations under the 6% Notes
convertible securities described below. |
STOCKHOLDER
PROPOSALS
Our stockholders may
submit proposals on matters appropriate for stockholder action at meetings of our stockholders in accordance with Rule 14a-8 promulgated
under the Exchange Act. For a stockholder proposal to be considered for inclusion in the Company’s proxy statement for the
2015 Annual Meeting of Stockholders, the written proposal must be received by the Company’s Corporate Secretary at the address
below no later than October 14, 2015. If the date of the 2015 Annual Meeting of Stockholders is moved more than 30 days before
or after the anniversary date of the 2014 Annual Meeting of Stockholders, the deadline for inclusion of proposals in the Company’s
proxy statement for the 2015 Annual Meeting of Stockholders is instead a reasonable time before the Company begins to print and
mail its proxy materials for the 2015 Annual Meeting of Stockholders. Such proposals also will need to comply with Securities and
Exchange Commission regulations under Rule 14a-8 regarding the inclusion of stockholder proposals in company-sponsored proxy materials.
Proposals should be addressed to:
Kiwa Bio-Tech Products Group Corporation
ATTN: Corporate Secretary
310 North Indian Hill Blvd Suite 702
Claremont, California 91711-4611
Stockholders may present
proposals that are proper subjects for consideration at an Annual Meeting of Stockholders, even if the proposal is not submitted
by the deadline for inclusion in the proxy statement under Rule 14a-8. To do so, the shareholder must comply with the procedures
specified in the Company's bylaws which have been filed as Exhibit 3.2 to our Current Report on Form 8-K filed with the Securities
and Exchange Commission on July 23, 2004 and are available in print upon request from the Corporate Secretary. Our bylaws require
all stockholders who intend to make proposals at an Annual Meeting of Stockholders to submit their proposals to the Secretary not
less than 60 and not more than 180 days before such Annual Meeting of Stockholders, provided, however, that in the event that less
than 70 days’ notice or prior public disclosure of the date of the meeting is given or made to the stockholders, notice by
the stockholder to be timely must be received not later than the close of business on the 10th day following the
day on which such notice of the date the Annual Meeting of Stockholders was mailed or such public disclosure was made. The bylaws
also provide that nominations for director may only be made by the Board of Directors or by a stockholder of entitled to vote who
sends notice to the Corporate Secretary not less than 60 and not more than 180 days before such Annual Meeting of Stockholders,
provided, however, that in the event that less than 70 days’ notice or prior public disclosure of the date of the meeting
is given or made to the stockholders, notice by the stockholder to be timely must be received not later than the close of business
on the 10th day following the day on which such notice of the date the Annual Meeting of Stockholders was mailed
or such public disclosure was made. Any nomination by a stockholder must comply with the procedures specified in the Company's
bylaws.
The Board of Directors
will consider recommendations for candidates to the Board from the Company’s stockholders. A stockholder that desires to
recommend a candidate for election to the Board must direct the recommendation in writing to the address above, including the candidate’s
name, age, home and business contact information, detailed biographical data and qualifications, information regarding any relationships
between the candidate and the Company, written evidence that the candidate is willing to serve as a director of the Company if
nominated and elected and evidence of the nominating person’s ownership of Company Common Stock.
You may contact the
Company’s Corporate Secretary at our principal executive offices for a copy of the relevant provisions regarding the requirements
for making recommendations of director candidates.
ANNUAL
REPORT
A copy of our Annual
Report on Form 10-K for the year ended December 31, 2014, as filed with the Securities and Exchange Commission, including copies
of the exhibits to the annual report on Form 10-K if specifically requested, is available without charge upon written request of
any stockholder. Please address all such requests to Kiwa Bio-Tech Products Group Corporation, 310 N. Indian Hill Blvd., #702,
Claremont, CA 91711. Attention: Corporate Secretary; or by telephone at (626) 715-5855.
OTHER BUSINESS
The Board of Directors does not currently
intend to bring any other business before the meeting, and so far as is known to the Board, no matters are to be brought before
the meeting except as specified in the notice of the meeting. However, as to any other business which may properly come
before the meeting, the proxy holders will vote any shares represented by proxies in their discretion.
|
KIWA BIO-TECH PRODUCTS GROUP CORPORATION |
|
|
|
By Order of the Board of Directors |
|
|
|
/s/ Yvonne Wang |
|
Yvonne Wang |
|
Secretary |
|
|
|
Claremont, California |
|
October __, 2015 |
APPENDIX A
CERTIFICATE OF AMENDMENT
Approval of the amendment of the Company certificate of incorporation
to effect the Reverse Stock Split of our Common Stock, $0.001 par value per share:
RESOLVED, that
Article 4 of the Certificate of Incorporation of the Company, as previously amended, be further amended to add the following paragraph
to the end thereof:
Reverse
Stock Split. Each _two hundred (200) of the issued and outstanding shares of Common Stock as of the time the certificate containing
this amendment becomes effective (the ‘‘Split Effective Time’’), shall be combined and converted (the “Reverse
Split”) automatically, without further action, into one (1) fully paid and non-assessable share of Common Stock. In lieu
of any fractional shares to which a holder would otherwise be entitled, the Company, at its discretion, shall either: (a) pay cash
equal to the product of such fraction multiplied by the fair market value of one share of Common Stock, as of the Split Effective
Time or (b) issue a scrip or warrant in registered form to purchase our Common Stock which shall enable the holder thereof to receive
a full share upon the surrender of such scrip or warrant aggregating a full share; Each holder of record of a certificate which
immediately prior to the Split Effective Time represents outstanding shares of Common Stock (an ‘‘Old Certificate’’)
shall be entitled to receive upon surrender of such Old Certificate to the Company’s transfer agent for cancellation, a certificate
(a ‘‘New Certificate’) representing the number of whole shares of Common Stock into and for which the shares
formerly represented by such Old Certificate so surrendered are combined and converted. From and after the Split Effective Time,
Old Certificates shall represent only the right to receive New Certificates as aforesaid and, to the extent the Company so elects,
cash pursuant to the provisions hereof. The amount of capital represented by the shares of Common Stock outstanding in the aggregate
immediately after the Split Effective Time shall be adjusted from the capital account of the Common Stock to the additional paid
in capital account for each share of Common Stock fewer outstanding immediately following the Reverse Split than immediately prior
to the Reverse Split, such transfer to be made at the Split Effective Time.
; and be it further
RESOLVED,
that the Certificate of Amendment (the “Certificate of Amendment”) of the Certificate of Incorporation of the Company
dated October 2, 2015 be, and it hereby is, authorized, approved and adopted in all respects.
[FRONT]
PROXY
FOR ANNUAL MEETING OF STOCKHOLDERS OF
THE STOCKHOLDERS
KIWA BIO-TECH PRODUCTS GROUP CORPORATION
This Proxy is Solicited on Behalf of
the Board of Directors
The undersigned hereby appoints Wei Li and Yvonne Wang (collectively,
the “Proxies”), and each of them, with full power of substitution, as proxies to vote the shares which the undersigned
is entitled to vote at the Annual Meeting of Stockholders of the Company to be held at our executive office located at Room 1702,
Building A, Global Trade Center, 36 North Third Ring Road East, Dongcheng District, Beijing, People’s Republic of China,
on November 20, 2015 and at any adjournments thereof.
1. Election of Directors: |
FOR
all Nominees |
WITHHOLD
AUTHORITY
for all Nominees |
FOR all Nominees
EXCEPT |
|
¨ |
¨ |
¨ |
Nominees:
(1) Yvonne Wang
(2) Jimmy Ji Zhou
(3) Lucy Li
(4) Qi Wang
(5) Yong Chang Wu
Instruction: To withhold authority to vote
for any individual nominee, mark “For All Nominees Except” and write the name of the nominee(s) below:
2. |
Approve an amendment to |
FOR |
AGAINST |
ABSTAIN |
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our Certificate of Incorporation |
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to effect the Reverse Split |
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3. |
Ratify the appointment of |
FOR |
AGAINST |
ABSTAIN |
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Paritz & Company, P.A. |
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as the Company’s independent auditors |
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for the fiscal year ending |
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December 31, 2015 |
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If no choice is specified, the Proxy will be voted “FOR.”
In their discretion, the Proxies are authorized to vote upon
such other business as may properly come before the meeting.
[REVERSE]
This proxy when properly signed will be voted in the manner
directed herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED “FOR” EACH
OF THE NOMINEES SET FORTH IN PROPOSAL 1, “FOR” ON PROPOSAL 2 AND PROPOSAL 3 AND IN THE DISCRETION OF THE PROXIES AS
TO ANY OTHER MATTERS THAT PROPERLY COME BEFORE THE ANNUAL MEETING OF STOCKHOLDERS.
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Signature |
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Signature, if held jointly |
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Dated: ___________________, 2015 |
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IMPORTANT – PLEASE SIGN AND RETURN PROMPTLY. When shares are held by joint tenants, both should sign. When signing as attorney, executor, administrator, trustee, or guardian, please give full title as such. If a corporation, please sign in full corporate name by President or other authorized officer. If a partnership, please sign in partnership name by an authorized person. |
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