ANGUILLA, British West Indies, Aug. 27, 2019 /CNW/ - KMT Hansa Corp. ("KMT" or the "Company") is pleased to announce it has been granted a Hemp International Industry Park Special Economic Zoning License (the "License") by Yuanjiang County, Yuxi City, Yunnan Province. The granting of the License is the first such license to be granted to a foreign enterprise. Pursuant to the License, KMT is licensed to grow, cultivate and extract industrial hemp in Yunnan Province. KMT has incorporated a wholly owned subsidiary in China, Yunnan Hansa Co. Ltd., and intends to commence operations in Yunnan Province as an industrial hemp company as soon as possible. The Company intends to apply for additional Special Economic Zoning Licenses in neighboring provinces.
In addition, KMT would also like to announce that it has entered into a non-binding letters of intent with each of QXCENTURY Ventures Ltd. ("QXCV"), an arm's length party and HDD Investment Holdings Corp. ("HDD"), a non-arm's length party.
QXVENTURES Letter of Intent
Pursuant to a non-binding letter of intent dated August 15, 2019 with QXVC, KMT has agreed to acquire 50% of the issued and outstanding securities of QXVC for an aggregate purchase of US$5 million (or CAD $6,640,375) (the "Purchase Price"). The Purchase Price will be satisfied through the issuance of an aggregate of 60,367,045 common shares in the capital of the Company at a deemed value of $0.11 per share (the "Consideration Shares").
The acquisition of QXVC (the "QXVC Transaction") is subject to requisite shareholder and regulatory approval, including the approval of the TSX Venture Exchange (the "TSXV") and standard closing conditions, including the completion of due diligence investigations to the satisfaction of each of QXVC and KMT.
Prior to completion of the QXVC Transaction, KMT and QXVC shall negotiate and enter into a definitive share exchange agreement on commercially reasonable terms and the parties shall have obtain the requisite shareholder approvals for the QXVC Transaction.
About QXCENTURY Ventures Ltd.
QXCV, a company incorporated pursuant to the laws of the Republic of Seychelles, through its wholly owned subsidiary, Guangxi Hemp Biotech Co. Ltd. ("GXHM"), a company incorporated pursuant to the laws of the People's Republic of China, is focused on technology and certification in growing and cultivation of industrial hemp and other herbs in various locations in China.
QXVC, through GXHM, has secured major farming land leases in Yunnan Province for an aggregate of 7,000 hectares or 17,300 acres. The land will be used for the growing and cultivation of hemp. In addition, GXHM is licensed to build and operate a manufacturing facility to produce consumer products utilizing hemp in Guangxi.
Information about the Control Person or Persons of QXVC and their Jurisdiction of Residence
The control person of QXVC is Cathy Man Xu who resides in Richmond Hill, Ontario.
Financial Information Concerning QXVC
For the six month period ending July 31, 2019, QXVC has not, on an unaudited consolidated basis, generated any revenues, incurred aggregate losses of $10,000 with total assets of $191,000 and total liabilities of $150,000. As of August 1, 2019, QXVC had a working capital deficit of $26,000.
HDD Letter of Intent
Pursuant to a non-binding letter of intent dated August 15, 2019 (the "HDD LOI") with HDD, KMT has agreed to acquire HDD's Lumuwan Forest Farm party (the "Property"). KMT has agreed to acquire the Property for an aggregate purchase price of CAD$745,734,571 (the "HDD Purchase Price"). The HDD Purchase Price will be satisfied through the issuance of an aggregate of 6,779,405,190 common shares in the capital of the Company at a deemed value of $0.11 per share (the "HDD Consideration Shares").
The Property, which is forest land and is zoned for agricultural and commercial use, is located in Lanyang Town, Danzhou City, Hainan Province in the People's Republic of China. The Property comprises an aggregate of 8,237acres.
Related Party Transaction
HDD currently owns an aggregate of 14,103,827 common shares of KMT, or approximately 51% of the total issued and outstanding shares in the capital of KMT. AS such, HDD is an insider of the Company and the acquisition of the Property and the issuance of the HDD Consideration Shares is a related party transaction. Pursuant to Multilateral Instrument 61-101 ? Protection of Minority Security Holders in Special Transactions, KMT will obtain majority approval of the majority of the minority shareholders at a shareholders' meeting and obtained a formal valuation of the Property by an independent valuator.
Pursuant to a valuation report dated March 29, 2018, prepared by Cushman & Wakefield, an independent valuator, the Property was valued, as at March 29, 2019, at RMB3,975,000,000 or CAD$745,734,571 (using the conversion rate of RMB1 equals CAD$0.19). KMT will provide an updated valuation report prior to the shareholders' meeting. In addition, the Company intends to obtain an independent title opinion with respect to the ownership of the Property.
KMT intends to call a special meeting of shareholders as soon as possible. At the meeting, shareholders' will be asked, among other matters, to elect directors and approve the acquisition of QXVC and the Property.
Insiders, Officers and Board of Directors of the Resulting Issuer
Upon completion of the QXVC Transaction and the acquisition of the Property, it is anticipated that the board of directors of the Resulting Issuer shall be comprised of: Cathy Man Xu, Yaxing Shi Peter Man Wai Yau, Shijing Wang, Wiaoyan Li, Haijing Dong and Edward Tim Sing Chan. In addition, it is expected that the officers of the Resulting Issuer shall be Edward Chan Tim Sing (Chief Executive Officer), Peter Man Wai Yau (Chairman of the Board) and Ankit Gosain (interim Chief Financial Officer).
The following sets outs the names of all persons who are expected to be considered insiders of the Resulting Issuer.
Peter Man Wai Yau, Director and Chairman of the Board - Mr. Yau is a professional architect with over thirty years of experience in the architectural design and project management industry focusing on mixed use commercial, shopping centre and hotels, highrise residential developments, senior retirement communities throughout Canada and China. Mr. Yau has gained valuable international experience through major architectural firms such as B & H Architects, Parkin Architects, and various real estate developers. Through Mr. Yau has handled professional teams exceeding 15 members and projects ranging from $250 million to over $1 billion both here in Canada and China. Some of the major projects that Mr. Yau has been part of include Toronto Eaton Centre, First Canadian Place, Shanghai Hong Kong New World Centre and senior development projects under development in the southern part of China. He has vast experience involving legal, financing, planning, management from concept to successful development to realization of major projects.
Edward Tim Sing Chan, Chief Executive Officer and Director ? Mr. Chan worked as investment analyst and manager at Canada Life, Sun Life and RBC Group in his earlier part in financial industry career. Mr. Chan is responsible for various North American commercial and technologies deployments in China in the past decade.
Cathy Man Xu, Director - Ms. Xu has enjoyed a diverse career in IT and the printing industry. Throughout her career, Ms. Xu has lead country team and built channel organizations to managing sales operations and printing press design. Ms. Xu has served as Country Manager of Digital Press Solutions in Greater China for China Hewlett-Packard as well as Director, Channel Management for Heidelberg China Limited. Ms. Xu combines strong management skills and has been directly responsible for 30+ staff and 15 Channel Partners with an aggregate of 300 employees. Her strengths lie with improving organizational effectiveness and enhancing a company's image and reputation, with a passion for sales, marketing, business development and building enduring customer relationships. She obtained Executive MBA from the China Europe International Business School.
Yaxing Shi, Director ? Mr. Shi is a professional engineer and graduated from Changchun Institute of Optics and Fine Mechanics. With more than 30 years of professional management in engineering technology with several major corporations in China. Mr. Shi is nominated recently as director of Guangxi Hanma Biotechnology Co., Ltd. to overlook all engineering capacity in setting up CBD extraction facilities in China.
Shijing Wang, Director ? Mr. Wang is a professional architect graduated form Xi' An University of Architecture and Technology and has more than 20 years of project design and management experiences behind him. Mr. Wang serves as Chairman of Dingdian Culture and Sports Investment Management (Hainan) Co., Ltd. responsible for the development of the "Lumuwan" project.
Xiaoyan Li, Director ? Ms. Li graduated from Anhui Medical College and has been working medical and disease control field for the past 3 decades. Ms. Li joined Dingdian in 2015 as director and will organize medical clinical research in CBD for in China.
Haijing Dong, Director ? Ms. Dong currently serves as Director of Administration in Dingdian and is responsible for all marketing and promotional activities of the Company.
Jim Sintros, Director ? Mr. Sintros is internationally known in the fields of business, education, philanthropy, and motorsports. He serves on the boards of corporations, educational and healthcare institutions and charitable foundations in the United States, Europe, Asia, Africa, the Middle East and the Caribbean. Mr. Sintros is the longest serving director of the Hult International Business School which has campuses in Boston, San Francisco, London, Dubai and Shanghai, and he is a member of the governing body of Ashridge Business School in the UK. Mr. Sintros is President of the Joseph W. Stilwell Institute Foundation, a US tax-exempt charitable foundation, which supports the Stilwell Museum in Chongqing, P.R. China, said to be the only national monument in China dedicated to a foreigner.
Ankit Gosain, Interim Chief Financial Officer ? Mr. Gosain has experience in providing assurance, tax and business advisory services to a variety of industries including cannabis, technology, pharmaceutical, engineering, real estate, natural resources and professional services. Mr. Gosain has in-depth knowledge of International Financial Reporting Standards (IFRS), Canadian Auditing Standards, International Auditing Standards and US GAAP. Mr. Gosain has helped senior management of numerous companies in understanding and implementing continually changing accounting and regulatory requirements. Mr. Gosain has experience in go public transactions through IPOs, CPCs and reverse takeover transactions and has assisted companies with filing prospectuses, business acquisition reports and other regulatory documents. Mr. Gosain is a graduate from the University of Western Ontario with a specialization in accounting and has obtained a Chartered Professional Accountant and Chartered Accountant designation. Mr. Gosain has experience working in national and international accounting firms in Canada.
In addition, the Company would also like to announce that it intends to raise gross proceeds of up to $1 million through a non-brokered private placement of up to 12.1 million common shares at a price of $0.0825 per share.
The non-brokered private placement is subject to all necessary regulatory approvals. The common shares being issued pursuant to the private placement will be subject to a four month hold period in accordance with applicable Canadian securities laws. The proceeds from the private placement will be used to commence operations in China and for general working capital purposes.
Sponsorship of a reverse take-over is required by the TSXV unless exempt in accordance with TSXV policies. KMT is currently reviewing the requirements for sponsorship and may apply for an exemption from the sponsorship requirements pursuant to the policies of the TSXV, however, there is no assurance that KMT will ultimately obtain this exemption. KMT intends to include any additional information regarding sponsorship in a subsequent press release.
All information contained in this news release with respect to KMT, QXVC and the Property was supplied by the parties respectively, for inclusion herein, and each party and its directors and officers have relied on the other party for any information concerning the other party.
Completion of the transactions is subject to a number of conditions, including TSXV acceptance and disinterested shareholder approval. The transaction cannot close until the required shareholder approval is obtained. There can be no assurance that the transactions will be completed as proposed or at all.
Investors are cautioned that, except as disclosed in the Management Information Circular to be prepared in connection with the transactions, any information released or received with respect to the transactions may not be accurate or complete and should not be relied upon. Trading in the securities of KMT. should be considered highly speculative.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.
Investors are cautioned that, except as disclosed in the management information circular to be prepared in connection with the transactions, any information released or received with respect to the transactions may not be accurate or complete and should not be relied upon. Trading in the securities of the KMT should be considered highly speculative.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains "forward-looking information" within the meaning of applicable securities laws relating to the proposal to complete the transactions and associated transactions, including statements regarding the terms and conditions of the transactions. The information about QXVC and the Property contained in the press release has not been independently verified by the Company. Although the Company believes in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements depending on, among other things, the risks that the parties will not proceed with the transactions and associated transactions, that the ultimate terms of the transactions and associated transactions will differ from those that currently are contemplated, and that the transactions and associated transactions will not be successfully completed for any reason (including the failure to obtain the required approvals or clearances from regulatory authorities). The terms and conditions of the transactions may change based on the Company's due diligence and the receipt of tax, corporate and securities law advice for both KMT and QXVC. The statements in this press release are made as of the date of this release. The Company undertakes no obligation to comment on analyses, expectations or statements made by third-parties in respect of the Company, QXVC, the Property, their securities, or their respective financial or operating results (as applicable).
The securities of KMT and QXVC have not been and will not be registered under the United States Securities Act of 1933, as amended and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
SOURCE KMT-Hansa Corp.
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