SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Act of 1934
Date of Report (Date of earliest event reported)........ December 30, 1998
CHINA FOOD & BEVERAGE COMPANY
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(Exact name of registrant as specified in its charter)
NEVADA 0-11734 87-0548148
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(State or other jurisdiction of (Commission (I.R.S. Employer Identification
incorporation or organization) File No.) No.)
8 West 38th Street, 9th Floor, New York, NY 10018
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(Address of principal executive offices and Zip Code)
Registrant's telephone number, including area code: (212) 398-7833
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<PAGE>
ITEM 1 CHANGES IN CONTROL OF REGISTRANT
------
On December 31, 1998, the Company issued a total of 4,200,000 shares of
its common stock to the following persons and entities in the following amounts
pursuant to Debentures which were converted on December 30, 1998;
Calder Investments Limited 1,050,000 shares of common stock
Li, Lin Hu 1,050,000 shares of common stock
Anhui Liu An Beer Company Ltd. 2,100,000 shares of common stock
This issuance caused the three individuals and entities above set forth
to become the control persons of the Registrant.
ITEM 2 ACQUISITION OR DISPOSITION OF ASSETS
------
On December 30, 1998, the Company closed on the April 27, 1998
agreement with Calder Investments Limited and Li, Lin Hu by issuing its 5 year
and one day 8% Debenture in the amount of $10,500,000 to each of Calder
Investments Limited and Li, Lin Hu. This issuance consummated the transactions
described in the Company 8-K dated May 6, 1998.
On the same day, December 30, 1998, the Company caused the conversion
of the Debentures above described in the terms incorporated therein by issuing
to each of Li, Lin Hu and Calder Investments Limited thereupon caused 1,050,000
of their shares to be issued to Anhui Lui An Beer Company Ltd. to redeem their
note to Anhui Lui An Beer Company Ltd.
ITEM 5 OTHER EVENTS
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On December 31, 1998, the Company entered into a modification agreement
with Tiancheng (China) Co., Ltd. ("Tiancheng") pursuant to which paragraph 4 of
the December 17, 1997 agreement was amended so that Tiancheng's total
compensation shall consist of $150,000 and 500,000 shares of the Company's
common stock without valuations attached thereto.
On January 6, 1998, a majority of the shareholders of the Company
voting their shares in lieu of a formal shareholders meeting adopted the
Company's 1999 Stock Option Plan reserving for issuance 1,000,000 shares of the
Company's common stock which plan is to be administered by the Company's Board
of Directors. At the same time, the shareholders voted in favor of James Tilton,
Jane Zheng, Kitty Chow, Stanley Merdinger and Li, Lin Hu to be directors of the
Company until the next shareholders meeting.
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ITEM 7. EXHIBITS
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Debenture Note between China Food & Beverage Company and Calder
Investments Limited.
Debenture Note between China Food & Beverage Company and Li, Lin Hu.
Addendum Agreement between various parties dated December 30, 1998.
Agreement between Anhui Liu An Beer Company Ltd. and Victoria Beverage
Company Limited dated April 22, 1998.
Agreement between China Food & Beverage Company, Calder Investments
Limited and Li, Lin Hu dated April 27, 1998.
Trust Agreement dated December 17, 1997 between China Food & Beverage
Company and Tiancheng (China) Co., Ltd.
Modification Agreement dated December 31, 1998 between China Food &
Beverage Company and Tiancheng (China) Co., Ltd.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: January 8, 1999
CHINA FOOD & BEVERAGE COMPANY
(Registrant)
By: /s/ James Tilton
-----------------------------
James Tilton, President
$10,500,000
CHINA FOOD & BEVERAGE COMPANY
5 Years plus one day 8.00% Debenture Note
China Food & Beverage Company, a Nevada corporation (herein called the
"Corporation") for value received, hereby promises to pay to Calder
Investments Limited, or order the sum of $10,500,000 five years plus
one day from the date hereof, and to pay interest on such principal
amount from time to time from the date hereof at the rate of 8.00% per
annum, payable annually, on the twelve month anniversary hereof.
The Corporation reserves the right to pay all of any portion of the
principal amount of this debenture note upon any interest payment date
without penalty and interest shall cease on any principal amount so
paid.
This debenture shall be convertible into shares of common stock of
China Food & Beverage Company at the options of China Food & Beverage
Company, only if the common stock has closed for ten consecutive
business days at a high bid price of $5.00 per share then all of part
of the outstanding face amount of this debenture may be converted into
common stock of China Food & Beverage Company at a conversion price of
$5.00. By way of example, the conversion of $1,000,000 face amount of
this debenture divided by 5, the conversion price, allows 200,000
shares to be issued.
In the event of default in the payment of the principal of, or interest
on, this debenture note then the entire unpaid principal amount of this
debenture note shall become immediately due and payable.
No recourse shall be had for payment of any part of the principal or
interest of this debenture note against any incorporator, or against
any present or future shareholder of the Corporation by virtue of any
law, or by enforcement of any assessment, or otherwise, or against any
officer or director of the Corporation by reason of any matter prior to
the delivery of this debenture note, or against any present or future
officer or director of the Corporation, all such liability being, by
the acceptance hereof and as a part of the consideration for the issue
hereof, expressly released.
<PAGE>
In witness whereof the Corporation has signed this note on December 30,
1998.
CHINA FOOD & BEVERAGE COMPANY
By: /s/ James Tilton
-----------------------------
James Tilton, President
2
$10,500,000
CHINA FOOD & BEVERAGE COMPANY
5 Years plus one day 8.00% Debenture Note
China Food & Beverage Company, a Nevada corporation (herein called the
"Corporation") for value received, hereby promises to pay to Mr. Li,
Lin Hu or order the sum of $10,500,000 five years plus one day from the
date hereof, and to pay interest on such principal amount from time to
time from the date hereof at the rate of 8.00% per annum, payable
annually, on the twelve month anniversary hereof.
The Corporation reserves the right to pay all of any portion of the
principal amount of this debenture note upon any interest payment date
without penalty and interest shall cease on any principal amount so
paid.
This debenture shall be convertible into shares of common stock of
China Food & Beverage Company at the options of China Food & Beverage
Company, only if the common stock has closed for ten consecutive
business days at a high bid price of $5.00 per share then all of part
of the outstanding face amount of this debenture may be converted into
common stock of China Food & Beverage Company at a conversion price of
$5.00. By way of example, the conversion of $1,000,000 face amount of
this debenture divided by 5, the conversion price, allows 200,000
shares to be issued.
In the event of default in the payment of the principal of, or interest
on, this debenture note then the entire unpaid principal amount of this
debenture note shall become immediately due and payable.
No recourse shall be had for payment of any part of the principal or
interest of this debenture note against any incorporator, or against
any present or future shareholder of the Corporation by virtue of any
law, or by enforcement of any assessment, or otherwise, or against any
officer or director of the Corporation by reason of any matter prior to
the delivery of this debenture note, or against any present or future
officer or director of the Corporation, all such liability being, by
the acceptance hereof and as a part of the consideration for the issue
hereof, expressly released.
<PAGE>
In witness whereof the Corporation has signed this note on December 30,
1998.
CHINA FOOD & BEVERAGE COMPANY
By: /s/ James Tilton
-----------------------------
James Tilton, President
2
Addendum made this 30th day of December, to two certain agreements, one
of which was as of April 22, 1998, by and between Anhui Liu An Beer Company
Ltd., a Peoples' Republic of China corporation ("Anhui") and Victoria Beverage
Company Limited, an Isle of Man corporation ("Victoria") (the "Brewery Purchase
Contract") and one of which was as of April 27, 1998 by and between China Food &
Beverage Company, a Nevada corporation ("China"), Calder Investments Limited, a
British Virgin Islands corporation ("Calder") and Li, Lin Hu, an individual
citizen of the People' Republic of China ("Li Lin Hu") (the "Victoria Stock
Purchase Contract");
WHEREAS, Victoria purchased 55% of Anhui Haodun Brewery Co., Ltd. in
the Brewery Purchase Contract and pursuant to such purchase issued a promissory
note in the amount of $10,500,000 to Anhui; and
WHEREAS, China purchased from the owners of Victoria all of the issued
and outstanding stock of Victoria for a debenture in the face amount of
$21,000,000 (the "Debenture"); and
WHEREAS, China intends to convert the Debenture into shares of China's
common stock as per paragraph 2 of the Victoria Stock Purchase Contract.; and
WHEREAS, China, Calder, Li Lin Hu and Anhui wish to memorialize their
understandings of the distribution of the stock issued by China on conversion to
Anhui in full settlement of the outstanding promissory note.
NOW, THEREFORE, in consideration of the premises and promises contained
herein the signatory parties agree hereto as follows:
<PAGE>
1. Li Lin Hu and Calder herewith and hereby waive the requirements set
forth in paragraph 2 of the Victoria Stock Purchase Contract that the conversion
of the China Debenture may occur at China's option only if China's common stock
traded for 10 consecutive days at a high bid price of $5.00. Pursuant to this
waiver, Li Lin Hui and Calder agree that China may convert the Debenture if
China's common stock closed for one consecutive day at a high bid price of
$5.00.
2. China herewith and hereby converts the issued and outstanding
Debenture in face amount of $21,000,000 in favor of Li Lin Hui and Calder into
4,200,000 shares of common stock of which 2,100,000 are to be registered in the
name of Li Lin Hui and 2,100,000 are to be registered in the name of Calder.
3. Li Lin Hui, Anhui and Calder, specifically acknowledging the Brewery
Purchase Contract and, recognizing that Anhui is owed the sum of $10,500,000 by
promissory note and desiring to satisfy the terms of such promissory note, agree
that each of Li Lin Hui and Calder shall cause 1,050,000 shares of China common
stock owned by them to be transferred to Anhui so that Anhui will have received
2,100,000 shares of China common stock with a present value of $10,500,000 and
Anhui agrees to return to Victoria the original promissory note in its
possession and further agrees to waive all interest due and payable pursuant to
the promissory note having accepted 2,100,000 shares of China common stock in
full settlement of all obligations of compensation due to Anhui by the Brewery
Purchase Contract.
4. All representations preceding herewith shall survive the Closing.
5. This Agreement may be signed in one or more counterparts.
6. This Agreement shall be construed under the laws of the State of New
York.
<PAGE>
IN WITNESS WHEREOF, the parties have set their hands and seal the first
day, month and year above written.
VICTORIA BEVERAGE COMPANY LIMITED
By: /s/ Nicole Hewson
---------------------------------
Nicole Hewson, Director
ANHUI LIU AN BEER COMPANY LTD.
By: /s/ Si Yi Zhong
---------------------------------
Si Yi Zhong, President
CHINA FOOD & BEVERAGE COMPANY
By: /s/ James Tilton
---------------------------------
James Tilton, President
/s/ Li, Lin Hu
---------------------------------
LI, LIN HU
CALDER INVESTMENTS LIMITED
By: /s/ Joanna Redmayne
---------------------------------
Joanna Redmayne, Director
AGREEMENT made this 22nd day of April, 1998, by and between Anhui Liu
An Beer Company Ltd., a Peoples' Republic of China corporation (the "Seller")
and Victoria Beverage Company Limited, an Isle of Man corporation (the
"Purchaser");
WHEREAS, the Seller is the owner of a certain number of shares
representing the ownership of fifty-five percent (55%) of Anhui Haodun Brewery
Co., Ltd. (the "Brewery") (the "Brewery Stock"); and
WHEREAS, Seller wishes to sell the Brewery Stock to Purchaser;
NOW, THEREFORE, in consideration of the premises and promises contained
herein the signatory parties agree hereto as follows:
1. Seller herewith and hereby sells to Victoria the Brewery Stock and
Victoria herewith and hereby purchases the Brewery Stock from the Seller;
2. The purchase price for the Brewery Stock is and shall be
US$10,500,000 which sum shall be due and payable to the Seller within sixty (60)
days of the date of this Agreement and shall be payable, at the option of
Victoria in funds, securities or evidence of indebtedness.
3. The Seller represents and warrants that they are authorized to enter
into this agreement and that they are the owners of the Brewery Stock, the
transference of which pursuant to this Agreement is not violative of any law or
governmental edict.
4. Victoria represents and warrants that it is authorized to enter into
this Agreement.
5. Seller represents and warrants that the Brewery has total assets of
approximately US14,200,000 and total gross liabilities not exceeding
<PAGE>
US$8,700,000 and the total net shareholders equity is approximately
US$5,500,000. The Seller further represents and warrants that the Brewery is, in
the last twelve (12) months passed, had total gross revenues of approximately
US$15,500,000 and its net profit therefrom was approximately US$1,750,000.
6. This Agreement shall be construed under the laws of the State of New
York.
7. This Agreement may be signed in one or more counterparts.
IN WITNESS WHEREOF, the parties have set their hands and seal the first
day, month and year above written.
VICTORIA BEVERAGE COMPANY LIMITED
By: /s/ Nicole Hewson
---------------------------------
Nicole Hewson, Director
ANHUI LIU AN BEER COMPANY LTD.
By: /s/ Si Yi Zhong
---------------------------------
Si Yi Zhong, President
AGREEMENT made this 27th day of April, 1998, by and between CHINA FOOD
& BEVERAGE COMPANY, a Nevada corporation ("China"), CALDER INVESTMENTS LIMITED,
a British Virgin Islands corporation ("Calder") and LI, LIN HU, an individual
citizen of the People' Republic of China ("Mr. Li") (collectively the
"Sellers");
WHEREAS, the Sellers are the owners of a certain number of shares of
stock representing the ownership of one hundred percent (100%) in the
percentages set forth beside those names below of Victoria Beverage Company
Limited, an Isle of Man corporation (the "Victoria Stock"); and
WHEREAS, the Sellers wish to sell to China and China wishes to purchase
from Sellers' the Victoria Stock on the terms and conditions set forth herein
below;
NOW, THEREFORE, in consideration of the premises and promises contained
herein the signatory parties agree hereto as follows:
1. The Sellers hereby and herewith sell to China the Victoria Stock and
China herewith and hereby purchases the Victoria Stock from the Sellers.
2. The purchase price for the Victoria Stock is and shall be a
debenture issued by China in face amount of US$21,000,000 which debenture shall
be for a term of five years bearing interest at eight percent (8%) per annum
payable on the yearly anniversary of the issuance by China of the debenture (the
"Debenture"). The Debenture may be converted at any time during its term, at the
option of China only, into shares of common stock of China at a conversion price
of five dollars ($5.00) per share. China may cause such conversion at any time
during the term that the shares of stock of China trade at the close of ten (10)
<PAGE>
consecutive business days at a high bid price of $5.00 per share. China agrees
to register all shares so converted pursuant to appropriate registration
statement as soon as practicable after such conversion.
3. The Sellers represent and warrant that Victoria is the owner of
fifty five percent (55%) of Anhui Haodun Brewery Co., Ltd. ("the "Brewery"). The
Sellers further represent and warrant that the Brewery has total assets of
approximately US$14,200,000 and total gross liabilities not exceeding
US$8,700,000 and the total net shareholders equity is approximately US$5,500,000
and that the Brewery has, in the last twelve (12) months passed, had total gross
revenues of approximately US$15,500,000 and its net profit therefrom was
approximately US$1,750,000.
4. The Sellers represent and warrant that they are authorized to enter
into this Agreement and that they are the owners of the Victoria Stock, the
transference of which pursuant to this Agreement is not violative of any law or
governmental edict.
5. China represents and warrants that it has full power to enter into
this Agreement.
6. All representations preceding herewith shall survive the Closing.
7. This Agreement may be signed in one or more counterparts.
IN WITNESS WHEREOF, the parties have set their hands and seal the first
day, month and year above written.
CHINA FOOD & BEVERAGE COMPANY
By: /s/ James Tilton
---------------------------------
James Tilton, President
/s/ Li, Lin Hu
---------------------------------
LI, LIN HU 50%
CALDER INVESTMENTS LIMITED -- 50%
By: /s/ Joanna Redmayne
---------------------------------
Joanna Redmayne, Director
TRANSLATION Page 1 of 2 pages
TRUST AGREEMENT
China Food & Beverage Company, hereafter referred to as Party A, and
Tinacheng (China) Co., Ltd., hereafter referred to as Party B, as a result of
friendly discussions on the planned purchase of beer breweries and beverage
manufacturers on the Chinese mainland, have reached agreements as follows:
1. Party B accepted Party A's trust to provide services for
compensation to purchase beer breweries and beverage manufacturers on behalf on
Party A.
The scope of the trust in as follows;
(1) To search for those beer breweries and beverage
manufacturers who agree to raise capital by increase of shares and/or transfer
of shares(Hereafter referred to as "the above mentioned enterprises"). The
shares so acquired shall be more that 50% of its total shares. A written
agreement along with its current Balance Sheet and its background information
shall be provided to Party A. The number of "the above mentioned enterprises"
ranges from 2 to 8, which shall be finalized based on their sizes;
(2) To investigate the production and sales operations of "
the above mentioned enterprises" and prepare written reports to be submitted to
Party A for reviewing and screening purposes;
(3) The minimum criteria for assets profit ratio is 20%. Those
eligible enterprises finalized by Party A shall be reorganized to form a
foreign/domestic joint venture and foreign capital controlled structure. Party B
shall, based on this perspective, help to reorganize and spin-off their assets
structure;
(4) To obtain the qualified accounting firms in China to
evaluate the assets structure of the enterprises to reorganized of spin-off as
mentioned in the preceding paragraph and obtain permits, as required, from
governmental agencies;
(5) To assist "the above mentioned enterprises" to re-adjust
their accounting records and have them audited by the accountant in China and
have the audit report to be submitted to Party A;
(6) To negotiate with "the above mentioned enterprises" based
on Party A's capital raising requirements so as to execute the legal
foreign/domestic joint venture agreement or purchase agreement and required
relevant documents;
(7) To consistently assist to complete all the procedures in
connection with verifying the capital commitment and filing the relevant
applications so as to ensure the approval and issuance of all the required
business permits and licenses of the joint venture in question.
2. Party A agreed that the total capital invested by both parties
(including the assets of "the above mentioned enterprises") shall be 6 folds of
it's 1997 annual earnings. Party A's investment capital shall be calculated
proportionately based on its shares owned (above 50%). The balance, if any,
shall be the sole responsibility of Party B (that is to say that if there is any
shortage, is shall be made up by Party B, or, if there is any surplus, it shall
be kept by Party B).
3. Party A guarantees that when Party B has satisfactorily completed
all the jobs as listed up to article 7 paragraph 1 above, Party A shall, in
compliance with provisions as stipulated by "The Law Governing the
Foreign/Domestic Joint Venture Operations of the People's Republic of China",
remit at least US$2,000,000.00 to the Capital Investment of Account opened by
"the above mentioned enterprises" in a bank in China. The balance and procedures
shall be completed by Party B until the issuance of business permits. In case
that Party A fails to remit the foresaid US$1,000,000.00 and, as a result, the
business permit is jeopardized, Party A shall be responsible.
<PAGE>
Page 2 of 2 pages
4. Party A agreed to pay Party B US$150,000.00 as partial payment for
Party B's services. Party A shall also pay 500,000 of its marketable shares as
additional compensation and commission payment. After completion of all the jobs
of this agreement, if the market price of its share is below US$5.00, Party A
shall pay Party B the difference, Party A also guarantees that the total value
of the 500,000 shares paid to Party B shall be no less that US$2,500,000.00.
5. Party A's installment payment plan is as follows:
(1) During the execution period of article 1 of paragraph 1 as
mentioned above, to be more specifically, within two business days after Party B
provided the Balance Sheet, background information and written agreement to
increase or transfer shares with the prospect enterprises, Party A shall remit
US$20,000.00 to Party B's bank account.
(2) Within two business days after the execution of article 1
of paragraph 1 for the third enterprises of after Party B's written notice to
Party A of its start of the assets reorganization or spinning-off procedures for
the first enterprise, Party A shall remit US$30,000.00 to Party B's bank
account.
(3) Within two business days after the completion of article 1
of paragraph 1 or after written notice by Party B to Party A of the start of
adjustment of accounts and assets evaluation for the first enterprise, Party A
shall remit US$50,000.00 to Party B's bank account.
(4) Within two business days after written notice by Party B
To Party A of the application for business permit and government approval or the
start of assets reorganization of spinning-off for the second enterprise, Party
A shall remit the remaining US$50,000.00 to Party B's bank account.
Party B's bank account is as the following:
TIANCHENG (CHINA) CORP., LTD.
Standard Chartered Bank 570-2-158595-1
Mongkok bank Centre Branch
630-636 Nahan road Mongkok
Kowloon Hongkong
(5) Upon the delivery by Party B to Party A of the business
permit for the first foreign/domestic joint venture enterprise, Party A shall at
the same time deliver it 50,000 marketable shares to Party B.
6. Party B agreed, as requested by Party A, to use the name of Victoria
Beverage Company Limited (VBCL) in the Chinese mainland to sign the investment
or share purchase agreements with the above mentioned enterprises and the
foreign/domestic joint venture agreements including their related documents.
And, in order to coordinate with the fund raising efforts on the part or Party
A, Party B agreed to separately sign agreement in the name of VBCL with Party A
in advance to transfer all the shares of the above mentioned enterprises.
7. This agreement shall be under the jurisdiction of the laws of the
People's Republic of China.
8. This agreement shall be executed n both English and Chinese
languages. In case of variations, Chinese copy shall prevail.
9. This agreement shall be made duplicate and become effective upon
execution by both parties.
PARTY A: CHINA FOOD AND BEVERAGE PARTY B: TIANCHENG (CHINA)
COMPANY CO., LTD.
REPRESENTATIVE /s/ James Tilton REPRESENTATIVE /s/ Wang Qingzhang
------------------- ------------------
James Tilton Wang Qingzhang
Date: December 17, 1997
MODIFICATION AGREEMENT
This Modification Agreement by and between China Food & Beverage
Company ("China") and Tiancheng (China) Co., Ltd. ("Tiancheng") made as of
December 31, 1998.
WHEREAS, China and Tiancheng entered into a certain Trust Agreement on
December 17, 1997; and
WHEREAS, Tiancheng and China wish to modify the terms thereof.
NOW, THEREFORE, in consideration of the premises and promises contained
herein the signatory parties agree hereto as follows:
1. Paragraph 4 of the Trust Agreement is modified to read as follows:
"Party A (China) has agreed to Party B (Tiancheng) the sum of
$150,000 as partial payment for Tiancheng's services as set forth
in the Trust Agreement. Of such $150,000, $92,000 has been paid as
of the date hereof and Tiancheng acknowledges receipt of such
amount. China shall also deliver to Tiancheng 500,000 shares of
its common stock which number of shares has been delivered to
Tiancheng and Tiancheng specifically acknowledges receipt thereof.
Such 500,000 shares shall not be, when delivered, be free of
restrictive legend and Tiancheng waives its rights to have
"marketable shares" delivered to it. Additionally, Tiancheng
waives its rights to have such 500,000 shares have a value of not
less than $2,500,000 and accepts the shares previously delivered
in the form as delivered plus the $92,000 as full compensation
from its services; provided, however, that China still owes to
Tiancheng the sum of $58,000 to fulfill its obligations under the
Trust Agreement."
IN WITNESS WHEREOF, the parties have set their hands and seal the first
day, month and year above written.
CHINA FOOD & BEVERAGE COMPANY
By: /s/ James Tilton
---------------------------------
James Tilton, President
TIANCHENG (CHINA) CO., LTD.
By: /s/ Wang Qingzhang
---------------------------------
Wang Qingzhang, President
