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