Item 1.01 Entry into a Material Definitive Agreement.
On May 25, 2021, Aixin Life International, Inc. ("we", "us" or the "Company"),
entered into an Equity Transfer Agreement with Quanzhong Lin, the Chairman and
President of our Company and the holder of a majority of the shares of our
outstanding common stock, and Ms. Yirong Shen. Pursuant to the Agreement (the
"Hotel Purchase Agreement"), we have agreed to purchase Chengdu Aixin Shangyan
Hotel Management Co., Ltd. ("Shangyan Hotel Company") from Mr. Lin and Ms. Shen.
Consummation of the acquisition is subject to the satisfaction or waiver of
certain conditions, including the approval of the independent members of our
Board of Directors. The approval of our independent directors was obtained at a
Board Meeting held on May 28, 2021.
Under the terms of the Hotel Purchase Agreement, we have agreed to purchase all
of the outstanding equity of Shangyan Hotel Company for a purchase price of RMB
7,598,887 or US$1,164,598 based on an exchange rate of RMB/ US$ 6.5249 yuan per
dollar on December 31, 2020. Eighty percent of the equity of Shangyan Hotel
Company is owned by Mr. Lin. The balance is owned by Ms. Shen.
We received an appraisal from Zhengyuanzin Real Estate Land and Assets Appraisal
Co., Ltd. which valued the Shangyang Hotel Company at an amount equal to the
purchase price as of the end of November 2020. The purchase price will be
reduced by an amount equal to any amounts paid or distributed by Shangyan Hotel
Company to Mr. Lin or Ms. Shen after December 31, 2020 and increased by an
amount equal to any monies they contributed to Shangyan Hotel Company after such
date.
Shangyan Hotel Company owns and operates a hotel located in the Jinniu District,
Chengdu City. The hotel covers more than 8,000 square meters and has a large
restaurant that can accommodate 600 people, 6 luxury dining rooms, a 200 square
meter music tea house, 13 private tea rooms, 108 guest rooms and other
supporting facilities. The hotel is conveniently located, connected to the
express ring line of Chengdu and the Chendgdu bus system, within a 30-minute
drive to Shuangliu International Airport. The hotel is equipped with all modern
facilities, including central air conditioning and each guest room features
luxury bedding, high-speed internet, a safe for valuables and minibar. To
accommodate businesses, the banquet hall is equipped with advanced audio-visual
equipment and dedicated high-speed wireless Internet to facilitate large group
presentations. The staff includes a professional banquet team to ensure the
success of any private function or business gathering. A full range of catering
services, including Chinese-style boutique Sichuan cuisine are provided in a
stylish environment. During 2020 the Hotel was closed for approximately 6 months
due to Covid restrictions and revenues decreased to approximately $1,074,151 as
compared to revenues of $1,711,855 in 2019.
The Purchase Agreement contains customary representations, warranties, and
covenants of the parties and post-closing indemnities. The representations and
warranties set forth in the Agreement generally survive for 18 months following
the closing.
The Company expects the closing of the Acquisition to occur no later than July
1, 2021.
A copy of the Purchase Agreement is attached as an Exhibit to this report on
Form 8-K. The foregoing description of the Purchase Agreement does not purport
to be complete and is qualified in its entirety by reference to the Agreement.
Item 9.01 Financial Statements and Exhibits.
(a) Financial statements of business acquired.
The financial statements required by Rule 8-04 of Regulation S-X will be filed
by amendment to this Current Report on Form 8-K as soon as practicable, but in
no event later than 71 calendar days after the date on which this Current Report
on Form 8-K was required to be filed.
(b) Pro forma financial information
The pro forma financial information required pursuant to Rule 8-05 and Article
11 of Regulation S-X will be filed by amendment to this Current Report on Form
8-K as soon as practicable, but in no event later than 71 calendar days after
the date on which this Current Report on Form 8-K was required to be filed.
Exhibit No. Description
10.1 Equity Transfer Agreement with Respect to Shangyan Hotel Company
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