UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16 of
the Securities Exchange Act of 1934
For the month of June 2021
Commission File Number: 001-38397
Farmmi, Inc.
(Registrant’s name)
Fl
1, Building No. 1, 888 Tianning Street, Liandu District
Lishui,
Zhejiang Province
People’s
Republic of China 323000
(Address of principal executive offices)
Indicate by check mark whether
the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.:
Indicate
by check mark if the registrant is submitting the Form 6-K on paper as permitted by Regulation S-T Rule 101(b)(1): ¨
Indicate
by check mark if the registrant is submitting the Form 6-K on paper as permitted by Regulation S-T Rule 101(b)(7): ¨
Explanatory Note:
Entry into
Investment and Cooperation Agreement
As approved by the Registrant’s
Audit Committee and Board of Directors, on June 23, 2021, the Registrant entered into an investment and cooperation agreement (the “Agreement”),
through its subsidiary Farmmi (Hangzhou) Enterprise Management Co., Ltd., with Sigma Holding (Hangzhou) Co., Ltd. (“Sigma”),
and Hangzhou Xuyue Interactive Culture and Media Co., Ltd. (“Hangzhou Xuyue”).
Pursuant
to the Agreement, the parties will establish a community group purchasing distribution network company. The Company is obligated
to invest RMB 5 million, accounting for 25% of the total registered capital of the new company. Sigma is obligated to invest RMB 12 million,
accounting for 60% of the total registered capital of the new company. Hangzhou Xuyue is obligated to invest RMB 3 million, accounting
for 15% of the total registered capital of the new company.
Sigma is the controlling
shareholder of Shanghai Eliansy Industry Group Corporation Limited, a public company in China. Sigma’s 95% shareholder is Aihong
Wang, a sister of Zhengyu Wang who is a director of the Company, and a sister-in-law of Yefang Zhang who is the CEO and Chairwoman of
the Company. Sigma’s 5% shareholder is Yiren Tang, who is the controlling shareholder of Hangzhou Dawo Software Ltd. Co., a 3.8472%
shareholder of the Company’s subsidiary Zhejiang Forest Food Co., Ltd. Hangzhou Xuyue is an unrelated third party.
A copy of the Agreement is attached hereto as Exhibit
10.1 and is incorporated herein by reference. The foregoing summaries of the terms of the Agreement is qualified in its entirety by the
Agreement.
On June 23, 2021, the Company issued a press release
announcing the entry of the Agreement. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein
by reference.
Changes
in Registrant's Certifying Accountant
As previously disclosed,
on June 4, 2021, the Registrant’s Audit Committee and Board of Directors approved the appointment of YCM CPA Inc. for the fiscal
year ending September 30, 2021 and the dismissal of Friedman LLP, both effective upon the completion of Friedman LLP’s review of
the Registrant’s interim consolidated financial results as of and for the six months ended March 31, 2021 to be included in the
filing of the related Form 6-K.
On June 16, 2021, Friedman LLP informed the Registrant
that due to schedule conflicts, it would not be available to review the Registrant’s interim consolidated financial results as of
and for the six months ended March 31, 2021. Accordingly, on June 22, 2021, the Registrant’s Audit Committee and Board of Directors
approved the appointment of YCM CPA Inc. to review the Registrant’s interim consolidated financial results as of and for the six
months ended March 31, 2021.
The Registrant has requested that Friedman LLP
furnish a letter addressed to the Securities and Exchange Commission stating whether or not it agrees with the above statements. A copy
of Friedman LLP’s letter, is furnished as Exhibit 99.2 to this Form 6-K.
Exhibits
The following documents are filed herewith:
SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
|
|
FARMMI, INC.
|
|
|
|
|
|
|
By:
|
/s/ Yefang Zhang
|
|
|
Name:
|
Yefang Zhang
|
|
|
Title:
|
Chief Executive Officer
|
Dated: June 23, 2021
Exhibit 10.1
Investment and Cooperation Agreement
Party A: Sigma Holding (Hangzhou) Co., Ltd
Legal Representative: Wang Aihong
Registered Address: Room 1803, Dikai Ginza, Jianggan
District, Hangzhou City, Zhejiang Province
Party B: Farmmi (Hangzhou) Enterprise Management
Co., Ltd
Legal Representative: Zhang Dehong
Registered Address: No. 2-10B, Zhongtan Road,
Xiaya Town, Jiande City, Hangzhou City, Zhejiang Province
Party C: Hangzhou Xuyue Interactive Culture
and Media Co., Ltd.
Legal Representative: Xu Ranran
Registered Address: Room 1408, Building 2, No.
555, Xincheng Road, Puyan Street, Binjiang District, Hangzhou City, Zhejiang Province
Given
the rise of domestic community group purchase, the "last kilometer" of the distribution of fresh food has become an urgent problem
for platform operators. As a result, professional distribution services for urban communities emerged in response to the trend and demands.
After fully investigating the market, Party A, Party B, and Party C plan to make full use of their respective resources and jointly invest
in the establishment of Daliniu Grid Technology Co., Ltd. (Proposed name: hereinafter referred to as "Daliniu" or the "Company";
the final name pending on the approval of the government) to operate the project. "Daliniu" is committed to becoming a comprehensive
service provider of community group purchase distribution network. At the same time, the project will eventually be listed on the overseas
capital market to realize investment return of all investors.
Accordingly,
Party A, Party B and Party C, through voluntary and friendly consultation, signed the following agreements pursuant to relevant laws and
regulations.
Article
1 Equity arrangement, investment method and time
After
discussion by all parties, the total registered capital of Daliniu will be 20 million yuan. Among them:
(1)
Party A shall invest RMB 12 million yuan to the Company in currency, accounting for 60% of the total registered capital of Daliniu. Party
A shall complete the capital contribution of RMB 12 million before September 30, 2021.
(2)
Party B shall invest the capital of RMB 5 million to the Company, accounting for 25% of the total registered capital of Daliniu. Party
B shall complete the first phase of RMB 2 million before June 30, 2021, and the second phase of RMB 3 million before September 30, 2021.
(3)Party
C shall invest RMB 3 million, accounting for 15% of the total registered capital of Daliniu. Among them, RMB 1 million yuan has already
been invested at the time of the signing of this Agreement, and Party C shall complete the remaining 2 million yuan before September 30,
2021.
Party
A, Party B, and Party C agree to the potential dilution according to their respective ownership percentage, in the event that it is necessary
to introduce strategic investors to increase capital due to the business needs of the company.
Article
2. Management Structure
1．The
Company shall have shareholders meeting, board of directors, supervisors and general manager.
2．The
board of directors shall consist of three directors, with one person appointed by each of Party A, Party B, and Party C respectively.
The directors shall be elected by the shareholders ' meeting. The director appointed by Party A shall be the chairman of the board of
directors and the legal representative.
3．The
supervisors of the company shall be appointed by Party B and elected by the shareholders ' meeting.
4．The
company shall have a general manager, appointed by the board of directors.
5．The
financial manager of the Company shall be selected by Party A and appointed by the board of directors.
Article
3 The Rights of the Investors
1．Be
aware of the progress of the establishment and change of the company at any time.
2．Sign
the legal documents in the process of the company’s establishment and change.
3．After
the completion of the changes of the Company, exercise other rights of shareholders in accordance with the relevant provisions of the
laws and the articles of association of the Company.
4．In
the event when the Company issues new shares or any of the shareholders transfer their shares, shareholders shall have the right of first
refusal to purchase the shares.
Article
4. Obligations of each Investor
1.
Provide documents and materials necessary for the company to accomplish the change in time.
2.
Pay the capital contribution on time according to this agreement, and shall not withdraw the capital contribution after its establishment.
3.
After the completion of the company changes, assume other obligations in accordance with laws and relevant provisions of the articles
of association of the company.
Article
5. Finance and Accounting
1.
The company shall establish financial and accounting systems in accordance with laws, administrative regulations, and rules published
by the financial department under the State Council.
2.
At the end of each financial fiscal year, the Company shall make financial and accounting reports and submit the reported to be examined
and verified according to the law.
3.
In the first three months of each business year, the Company shall prepare the balance sheet, profit and loss calculation statement and
profit distribution plan of the previous year, which shall be submitted to the board of directors for deliberation and approval.
4.
The financial and accounting reports shall be ready for shareholders’ inspection at the Company 20 days before the shareholders
' meeting.
5.
When the company distributes the after-tax profits of the current year, it shall withdraw 10 percent of the profits and deposit to the
company's statutory accumulation fund. When the accumulative amount of the company's statutory accumulation fund is more than 50% of the
registered capital of the company, the withdrawal described in the previous sentence is no longer required.
6.
If the company's statutory reserve fund is insufficient to cover the losses of the previous year, it shall first use its profits to breakeven
before withdrawing the statutory reserve fund in accordance with the provisions of the preceding paragraph.
7.
After the company draws the statutory reserve fund from the after-tax profits, it may also withdraw more statutory reserve fund from the
after-tax profits subject to the resolution of the shareholders ' meeting or the general meeting of shareholders. The remaining after-tax
profits after the company compensates for the loss and draws the reserve fund shall be distributed in proportion to the shares held by
the shareholders.
8.
Where the shareholders ' meeting, the general meeting of shareholders or the board of directors violate the provisions and distribute
profits to the shareholders before the Company makes up for the losses and/or draws the statutory reserve fund, the shareholders shall
return to the Company the profits distributed in violation of the relevant provisions. The Company shall not distribute profits to the
shares held by the Company.
9.
The Company shall provide true and complete accounting vouchers, accounting books, financial and accounting reports and other accounting
materials to the engaged accounting firm, and shall not refuse, conceal or make false reports.
Article
6. Term of Cooperation
1.
The business period of the company is _50_ years, starting from the date of issuance of the new business license.
2.
Upon the expiration of the operation period or early termination of the contract, the parties shall terminate the Company according to
laws. The property after liquidation shall be distributed according to the proportion of paid-in capital by each party.
Article
7 Liability for breach of contract
1.
If any party to this contract fails to complete the capital contribution within the agreed upon period, the defaulting party shall pay
_10_% of the capital contribution to other parties as liquidated damages. If the party’s failure to complete the capital contribution
lasts for longer than three months, other parties shall have the right to terminate the contract.
2.
If one party cannot perform or fully perform the contract due to its fault, the fault party shall bear the losses caused to the Company
due to its behavior.
Article
8. Declaration and Guarantee
The
parties to the agreement make the following representations and warranties:
1．All
parties to this agreement are natural persons or legal persons with independent civil capacity and have legal rights or authority to enter
into this Agreement.
2．The
funds invested in the Company by the investors are legal property owned by the sponsors.
3．The
documents and materials submitted by investors to the Company are all true, accurate and effective.
Article
9. Confidentiality
1.
All parties promise to keep confidential the documents and materials obtained or learned during the discussion, signing and execution
of this Agreement, that belong to other parties, including trade secrets, company plans, operating activities, financial information,
technical information, business information and other business secrets. Without the consent of the original provider of the information
or documents, no party shall disclose the whole or part of the business secret to any third party, unless otherwise provided by laws or
regulations, or otherwise agreed by the parties. The confidentiality period is _20_ years.
2.
Parties agree that Party B's parent company, Farmmi, Inc., may disclose this agreement as a US listed company.
Article
10 Non-compete Rules
The
parties, and companies controlled by or affiliated with the parties, shall not engage in the following acts during the duration of the
Company:
1,
open its own production or operation of similar products to the products produced or operated by Daliniu or its subsidiaries;
2,
operate similar business to the business of Daliniu or its subsidiaries;
3,
operates a business similar to the business of Daliniu or its subsidiaries for others.
If
any party fails to perform the prescribed obligations, it shall be liable for breach of contract, and the liquidated damages shall be
paid to other parties at one time. At the same time, if the breach of contract causes losses to the Company, the party that causes the
losses shall compensate the Company for all losses (including direct and indirect losses), and the profits obtained by the party shall
be returned to the Company.
Article
11. Change of the Contract
During
the performance of this Agreement, this agreement can be changed with the consent of other parties through the written agreement, which
will become an integral part of this agreement. Neither Party shall have the right to change the Contract without the written consent
of other parties; otherwise, the economic losses caused by the unauthorized change shall be borne by the unauthorized party.
Article
12. Settlement of Disputes
1.
This Agreement shall be governed by and construed in accordance with the laws of the People's Republic of China.
2.
The disputes arising during the performance of this agreement shall be settled by all parties through negotiation or mediated by administrative
agencies. If no agreement can be reached during negotiation or mediation, either party shall have the right to initiate the litigation
at Hangzhou People's Court.
Article
13. Effectiveness of this agreement
1.
This Agreement shall come into force on the date when the parties, their legal representatives, or their authorized representatives sign
or affix official seals or special seals for contract of the parties.
2.
The invalidity or unenforceability of any provision of this agreement shall not affect the validity or enforceability of any other provisions
of this agreement, and such other provisions shall remain in full force and effect. The parties shall do their best to reach agreements
on such invalid or unenforceable terms to achieve the goals they originally intended to achieve.
3.
Neither party shall assign its rights or obligations under this agreement to any third party without prior written consents from other
parties; other parties shall have the right to cancel the transaction within one year of knowledge of an unauthorized assignment.
4.
If different agreements are signed by the parties in the process of the establishment or change of the company, this agreement shall prevail.
5,
This agreement is in quadruplicate, and each party should hold one copy. Each copy shall have the same legal effect.
6.
The attachments and supplementary contracts to this agreement are all integral parts of this agreement and have the same legal effect
as this agreement.
(Signature
page below)
(This
page is the signature page of the Investment Cooperation Agreement)
Party A (Seal): Sigma Holding (Hangzhou) Co.,
Ltd
Legal
representative or authorized representative (signature):
Party B (Seal): Farmmi (Hangzhou) Enterprise
Management Co., Ltd
Legal
representative or authorized representative (signature):
Party C (Seal): Hangzhou Xuyue Interactive
Culture and Media Co., Ltd
Legal
representative or authorized representative (signature):
Date:
June 23, 2021
Exhibit 99.1
Farmmi Announces Strategic Investment and Cooperation
Agreement
• 3 Partners to Invest in the
Creation of New Urban Distribution Company
·
Strengthens Presence in Broader Agricultural Industrial Chain
• Target Overseas Capital Market Listing
to Realize Investment Return
LISHUI, China, June 23, 2021 – Farmmi,
Inc. (“Farmmi” or the “Company”) (NASDAQ: FAMI), an agriculture products supplier in China, today announced its
entry into a strategic investment and cooperation agreement (the “Agreement”), through its subsidiary Farmmi (Hangzhou) Enterprise
Management Co., Ltd., with Sigma Holding (Hangzhou) Co., Ltd. (“Sigma”), and Hangzhou Xuyue Interactive Culture and Media
Co., Ltd. (“Hangzhou Xuyue”) (collectively referred to as the “Partners”). The strategic investment and cooperation
agreement signals Farmmi’s active expansion into the distribution network of agricultural products.
Given the rise of domestic community group purchasing,
the last kilometer of the distribution of fresh food has become a major bottleneck and challenge. Professional distribution services for
urban communities have emerged in response to benefit from the trend and to meet the higher demand. The market volume of community group-buying
market in China was estimated to be RMB 34 billion in 2019 and RMB 72 billion in 2020. (Source: iiMedia Research) It is anticipated that
the market volume will exceed RMB 1 trillion in 2023 as consumption habits take shape.(Source: Founder Securities)
Farmmi, Sigma and Hangzhou Xuyue are partnering
and will jointly invest in the establishment of a new company as part of a 50-year agreement. The new company is committed to becoming
a comprehensive service provider of community group purchasing distribution networks, and will seek to benefit from continued broader
market distribution trends.
Ms. Yefang Zhang, Farmmi’s Chairwoman and
CEO, said, “We are partnering with two strong companies, which will give the new company the financial resources and expertise critical
to a successful launch. We have conducted extensive market research and have a plan in place to ensure we move quickly and begin capturing
our share of the large distribution opportunity. The ‘last mile of delivery’ poses a challenge to all the distribution platforms,
represents a major opportunity for the launch of an urban distribution service for community group-buying. Fresh products, like fruits
and vegetables, are the most prominent category in community group buying, which lays a solid foundation for us to embrace the distribution
network of agricultural products. It is also in line with our strategy to expand into the whole agricultural industry chain. This deal
is expected to strengthen the company’s presence in agricultural supply chain and improve its profit.”
Equity Arrangement
The partners, all based in Hangzhou City, Zhejiang
Province, have agreed that the new company will initially have a total registered capital of RMB 20 million before September 30, 2021.
Sigma has agreed to invest RMB 12 million, accounting for 60% of the total registered capital of the new company. Farmmi has agreed to
invest RMB 5 million, accounting for 25% of the total registered capital of the new company. Hangzhou Xuyue has agreed to invest RMB 3
million, accounting for 15% of the total registered capital of the new company.
About Farmmi, Inc.
Headquartered in Lishui, Zhejiang, Farmmi, Inc.
(NASDAQ: FAMI), is an agricultural products supplier, processor and retailer of Shiitake mushrooms, Mu Er mushrooms, other edible fungi
and other agricultural products. For further information about the Company, please visit: http://ir.farmmi.com.cn/.
About Sigma Holding (Hangzhou) Co., Ltd.
Sigma was incorporated in Hangzhou, Zhejiang, China on June 26, 2008.
It is the controlling shareholder of Shanghai Eliansy Industry Group Corporation Limited, a public company in China.
About Hangzhou Xuyue Interactive Culture and Media Co., Ltd.
Hangzhou Xuyue was incorporated in Hangzhou, China on June 8, 2020.
It has experience in community group-buying industry.
Forward-Looking Statements
This announcement contains forward-looking statements
within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements
of historical fact in this announcement are forward-looking statements, including the potential impact of COVID-19 on our business within
and outside of China, the prospects of market volume of community group-buying market and the investment return. These forward-looking
statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events
and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial
needs. Investors can identify these forward-looking statements by words or phrases such as “may,” “will,” “expect,”
“anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,”
“potential,” “continue,” “is/are likely to” or other similar expressions. The Company undertakes no
obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations,
except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are
reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results
may differ materially from the anticipated results.
For more information, please contact Investor
Relations:
Global IR Partners
David Pasquale
New York Office Phone: +1-914-337-8801
FAMI@Globalirpartners.com