INFORMATION
STATEMENT
PURSUANT
TO SECTION 14(C)
OF
THE SECURITIES EXCHANGE ACT OF 1934
AND
RULE 14C-2 THEREUNDER
NO
VOTE OR OTHER ACTION OF THE COMPANY’S STOCKHOLDERS IS REQUIRED IN CONNECTION WITH THIS INFORMATION STATEMENT.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY
The
Company is distributing this Information Statement to its stockholders in full satisfaction of any notice requirements it may
have under Securities and Exchange Act of 1934, as amended, and applicable Nevada law. No additional action will be undertaken
by the Company with respect to the receipt of written consents, and no dissenters’ rights with respect to the receipt of
the written consents.
Expenses
in connection with the distribution of this Information Statement, which are anticipated to be approximately $5,000.00, will be
paid by the Company.
ABOUT
THE INFORMATION STATEMENT
What
Is the Purpose of the Information Statement?
This
Information Statement is being provided pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”) to notify the Company’s shareholders, as of the close of business on March 23, 2020 (the “Record
Date”), of corporate action taken pursuant to the consent or authorization of certain shareholders of the Company. Shareholders
holding the power to vote in excess of a majority of the Company’s outstanding common stock have acted upon the corporate
matters outlined in this Information Statement, consisting of the following:
To
amend the Company’s Articles of Incorporation to increase the number of authorized Company Common Shares from 300,000,000
to 3,000,000,000.
The
aforementioned action is hereinafter referred as the “Proposal”.
Who
Is Entitled to Notice?
Each
holder of an outstanding share of common stock or voting preferred stock of record on the close of business on the Record Date
will be entitled to notice of each matter voted upon pursuant to consents or authorizations by certain shareholders who, as of
the close of business on the Record Date, were entitled to cast seventy-five percent (75%) of the votes entitled to vote in favor
of the Proposals. Under Nevada corporate law, all the activities requiring shareholder approval may be taken by obtaining the
written consent and approval by the holders of seventy-five percent (75%) of the votes entitled to be cast on the matter in lieu
of a meeting of the shareholders. No action by the minority shareholders in connection with the Proposals is required.
What
Corporate Matters Did the Majority of the Shareholders Vote for And How Did They Vote?
As
of March 3, 2020, the Company had received executed consents from shareholders entitled to cast seventy-five percent (75%)
of the total eligible votes, which means that a majority of the votes entitled to be cast on the Proposals were in fact cast.
The Shareholders provided consent with respect to the following matters:
To
amend the Company’s Certificate of Incorporation to increase the number of authorized Company Common Shares from 300,000,000
to 3,000,000,000.
What
Vote Is Required to Approve the Proposal?
With
respect to the Proposals, the affirmative vote of a majority of the votes entitled to be cast on the Proposals was required for
approval of the Proposals. Certain of the Company’s shareholders have voted in favor of the Proposals and these shareholders
represented seventy-five percent (75%) of the votes entitled to be cast on the Proposals. These shareholders were entitled to
cast seventy-five percent (75%) of the votes eligible to be cast on the Proposals. Accordingly, these shareholders had sufficient
voting shares to approve the Proposals.
Shareholders
Who Voted in Favor of The Proposal
The
holders of the Company’s Series A Preferred shares have voting rights equal to an aggregate of seventy-five percent (75%)
of the total votes entitled to be cast on any matter which is put to a vote of the Company’s shareholders. The table below
indicates all of the holders of shares of the Company’s Series A Preferred stock that have voted in favor of the Proposal.
|
|
Shares of Series A Preferred Stock Voted on the Record Date
|
|
|
|
Number
|
|
|
Percent
of Vote (1)
|
|
|
|
|
|
|
|
|
Yvonne Wang
|
|
|
250,000
|
|
|
|
37.5
|
%
|
Feng Li
|
|
|
250,000
|
|
|
|
37.5
|
%
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
500,000
|
|
|
|
75.0
|
%
|
|
(1)
|
Applicable
percentage of ownership of Series A Preferred Stock is based on 500,000 shares of Series A Preferred Stock outstanding as
of the Record Date.
|
BACKGROUND
1.
Organizational History
Kiwa
Bio-Tech Products Group Corporation (“the Company”) is the result of a share exchange transaction accomplished on
March 12, 2004 between the shareholders of Kiwa Bio-Tech Products Group Ltd. (“Kiwa BVI”), a company originally organized
under the laws of the British Virgin Islands on June 5, 2002 and Tintic Gold Mining Company (“Tintic”), a corporation
originally incorporated in the state of Utah on June 14, 1933 to perform mining operations in Utah. The share exchange resulted
in a change of control of Tintic, with former Kiwa BVI stockholders owning approximately 89% of Tintic on a fully diluted basis
and Kiwa BVI surviving as a wholly-owned subsidiary of Tintic. Subsequent to the share exchange transaction, Tintic changed its
name to Kiwa Bio-Tech Products Group Corporation. On July 21, 2004, the Company completed its reincorporation in the State of
Delaware. On March 8, 2017, the Company completed its reincorporation in the State of Nevada.
The
Company operates through a series of subsidiaries in the Peoples Republic of China. The Company currently mainly operates its
business through Kiwa Baiao Bio-Tech (Beijing) Co., Ltd. (“Kiwa Beijing”), which was incorporated in China in January
2016, Kiwa Bio-Tech Products (Shenzhen) Co., Ltd. (“Kiwa Shenzhen”), which was incorporated in China in November 2016,
Kiwa Bio-Tech Products (Hebei) Co., Ltd. (“Kiwa Hebei”), which was incorporated in China in December 2016, Kiwa Bio-Tech
Products (Shenzhen) Co., Ltd. Xian Branch Company, (“Kiwa Xian”), which was incorporated in China in December 2017,
Kiwa Bio-Tech (Yangling) Co., Ltd. (“Kiwa Yangling”), which incorporated in March 2018, and The Institute of Kiwa-Yangling
Ecological Agriculture and Environment Research Co., Ltd. (“Kiwa Institute”), which incorporated in March 2018. In
July 2017, the Company established Kiwa Bio-Tech Asia Holding (Shenzhen) Ltd. (“Kiwa Asia”) to be the direct holding
company of Kiwa Beijing, Kiwa Shenzhen, Kiwa Xian, Kiwa Institue and Kiwa Hebei.
2.
Overview of Business
We
develop, manufacture, distribute and market innovative, cost-effective and environmentally safe bio-technological products for
agriculture. Our products are designed to enhance the quality of human life by increasing the value, quality and productivity
of crops and decreasing the negative environmental impact of chemicals and other wastes.
Our
Products
We
have developed three bio-fertilizer products with bacillus species (“bacillus spp”) and/or photosynthetic bacteria
as core ingredients. For the year ended December 31, 2019, we are currently generating revenues from our four bio-fertilizer
products: 1) Biological Organic Fertilizer; 2) Compound Microbial Fertilizer; 3) Bio-Water Soluble Fertilizer; 4) Microbial Inoculum
Fertilizer.
Some
of our products contain ingredients of both photosynthesis and bacillus bacteria. Bacillus spp is a species of bacteria that interacts
with plants and promotes biological processes. It is highly effective for promoting plant growth, enhancing yield, improving quality
and elevating resistances. Photosynthetic bacteria are a group of green and purple bacteria. Bacterial photosynthesis differs
from green plant photosynthesis in that bacterial photosynthesis occurs in an anaerobic environment and does not produce oxygen.
Photosynthetic bacteria can enhance the photosynthetic capacity of green plants by increasing the utilization of sunlight, which
helps keep the photosynthetic process at a vigorous level, enhances the capacity of plants to transform inorganic materials to
organic products, and boosts overall plant health and productivity.
Biological
Fertilizer provides beneficial living microorganisms and micronutrition to soil and improve plants absorptivity of main growth
ingredients. Proper use could prevent soil-borne, crops disease, improve soil fertility, alleviate agricultural pollution and
degrade heavy metal in farmland soil.
Compound
Microbial Fertilizer is adding appropriate amount of nitrogen, phosphorus, potassium and other nutrients into Biological Organic
Fertilizer. Through the action of organic matter and beneficial microorganisms, the utilization rate of nitrogen, phosphorus,
potassium can be significantly improved.
The
Bio-Water Soluble Fertilizer is mainly another form of the biological fertilizer that we firstly introduced in the first quarter
of 2018. It is in the form of powder which has high water solubility, and it is convenient for the farmers to use during the drop
irrigation.
Microbial
Inoculum Fertilizer is an environment-friendly biological soil conditioner that made of compound high-silicon, calcium, and mineral
raw materials, on the basis of dissolving-phosphorus, dissolving-potassium, and disease-resistant microbial agents. It is rich
in highly active microorganisms, which can improve the micro-ecological environment in the soil, transform and reduce heavy metal
toxicity, release the plant growth stimulants, promote crop growth, and enhance the stress resistance.
Compound
Microbial Fertilizer, Bio-Water Soluble Fertilizer, and Microbial Inoculum Fertilizer generally contain more microorganism and
have a higher effectiveness on the productivity of crops and increasing the value and quality of the crops harvested than Biological
Organic Fertilizer. As a result, our Compound Microbial Fertilizer, Bio-Water Soluble Fertilizer, and Microbial Inoculum Fertilizer
generally have a higher average selling price as compared to Biological Organic Fertilizer.
The
Board of Directors believes that the proposed increase in authorized shares of Common Stock is beneficial to the Company because
it provides the Company with the flexibility it needs to raise additional capital consistent with its Business Plan.
No
further action on the part of stockholders will be required to either implement or abandon the increase in authorized capital.
The Board of Directors reserves its right to elect not to proceed, and abandon, the increase in authorized capital if it determines,
in its sole discretion, that this proposal is no longer in the best interests of the Company’s shareholders.
ADVANTAGES
AND DISADVANTAGES OF INCREASING AUTHORIZED COMMON STOCK
There
are certain advantages and disadvantages of increasing the Company’s authorized common stock. The Company believes that
the impact of increasing its authorized capital is largely mitigated by increased ability of the Company to raise capital for
the future growth of the Company consistent with its Business Plan. As a result of the increase in authorized capital, authorized
but unissued Company Common Shares are increased from approximately 60,715,586 to 2,760,715,586. The current number of authorized
but unissued shares does not include shares which are reserved for issuance in the event of the exercise of certain warrants and
options which required to be reserved.
The
Company believes that this increased number of authorized but unissued Common Shares will facilitate:
|
●
|
The
ability to raise capital by issuing capital stock under future financing transactions, if any, and compliance with the applicable
covenants of existing financing.
|
|
|
|
|
●
|
To
have shares of common stock available to pursue business expansion opportunities, if any.
|
|
|
|
|
●
|
The
issuance of authorized but unissued stock could be used to deter a potential takeover of the Company that may otherwise be
beneficial to shareholders by diluting the shares held by a potential suitor or issuing shares to a shareholder that will
vote in accordance with the desires of the Company’s Board of Directors, at that time. Notwithstanding, a takeover may
be beneficial to independent shareholders because, among other reasons, a potential suitor may offer Company shareholders
a premium for their shares of stock compared to the then-existing market price. The Company does not have any plans or Proposal
to adopt such provisions or enter into agreements that may have material anti-takeover consequences.
|
Disadvantages
of this action include the following:
|
●
|
The
issuance of additional authorized but unissued shares of Common Stock could result in decreased net income per share which
could result in dilution to existing shareholders.
|
|
|
|
|
●
|
In
the long run, the Company may be limiting the number of authorized but unissued shares it can issue in the future without
a further amendment of its Articles of Incorporation. Notwithstanding, the Company believes that maintaining 2,760,715,586
authorized but unissued Common shares will cover all of its reasonably foreseeable requirements.
|