SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K
 
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
 
Date of report (date of earliest event reported): December 25, 2015
 
AOXIN TIANLI GROUP, INC.
(Exact name of registrant as specified in its charter)
 
 
British Virgin Islands
 
 
001-34799
 
 
N/A
(State or Other Jurisdiction
of Incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
Suite K, 12th Floor, Building A, Jiangjing Mansion
228 Yanjiang Ave., Jiangan District, Wuhan City
Hubei Province, China 430010
(Address of principal executive offices)
 
Registrant’s telephone number, including area code: (+86) 27 8274 0726
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
 
Item 1.01      Entry into a Material Definitive Agreement.

On December 29, 2015 , Aoxin Tianli Group, Inc. (the “Company”) entered into an Equity Transfer Agreement for the sale of its 95% equity interest in Wuhan Optical Valley Orange Technology Co., Ltd. (“OV Orange”) for a purchase price of RMB 47.5 million, or approximately US$7.3 million. It is anticipated that a closing of the sale will occur within seven days. A copy of the agreement is annexed as Exhibit 10.1 to this report.

The purchasers, Li-Na Deng and Hai Liu, former owners and managers of OV Orange, received 403,000 common shares of the Company in connection with the Company’s acquisition of its equity interest in OV Orange in August, 2014, subject to OV Orange’s attainment of specified net income levels for the years ended December 31, 2014, 2015 and 2016 (the “Earn-Out” Targets”), which shares were deposited is escrow pending attainment of the specified net income targets.  The targeted net income for the year ended December 31, 2014 was attained. In connection with the transaction, the Company has agreed to waive attainment of the Earn-Out Targets and has entered into an agreement with the purchasers which provides for the delivery of the shares to purchasers at the end of March 2017, expiration of the escrow term, if the sale is consummated. A copy of the agreement is annexed as Exhibit 10.2 to this report.
 
Item 1.02      Termination of Material Definitive Agreement.
 
On December 25, 2015, the Company terminated the Equity Transfer Agreement entered into on November 13, 2015 for the sale of its 88% equity interest in Hubei Hang-ao Servo-valve Manufacturing Technology Co., Ltd. (“Hang-ao”) for a purchase price of RMB 48.4 million, or approximately US$7.5 million. The agreement was terminated at the request of the purchaser as a result of the inability to obtain proper land use permits and deeds for Hang-ao’s properties as a result of the failure of the developer of the industrial park in which Hang-ao is located to complete the development of the industrial park and related permitting procedures.. The earnest money deposit of RMB 4 million, or approximately US$617,000, will be returned to the Company. A copy of the agreement is annexed as Exhibit 10.3 to this report.  
 
Item 7.01
Regulation FD Disclosure.
 
On December 30, 2015, Aoxin Tianli Group, Inc. (the “Company”) issued a press release announcing that it had entered into an Equity Transfer Agreement for the sale of its 95% equity interest in UV Orange and that it had terminated the Equity Transfer Agreement for the sale of its 88% equity interest in Hang-ao, as described in Items 1.01 and 1.02, respectively, of this report.
 
The information in Exhibit 99.1 shall not be deemed as “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”), or otherwise subject to the liability of such Section, nor shall it be deemed incorporated by reference in any filing by us under the Securities Act of 1933, as amended, or the Exchange Act, regardless of any general incorporation language in such filing, unless expressly incorporated by specific reference in such filing.
 
Item 9.01
 
(d) Exhibit
Financial Statements and Exhibits.
 
Description
   
10.1
English translation of Equity Transfer Agreement dated December 29, 2015 for the sale of OV Orange.
10.2 English translation of Letter Agreement dated December 29, 2015 concerning release of escrow shares for the sale of OV  Orange.
10.3 English translation of Agreement dated December 25, 2015 terminating Equity Transfer Agreement for the sale of Hang-ao.
99.1
Press Release dated December 30, 2015.
 
 
 
 
 
SIGNATURES
 
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
       
 
AOXIN TIANLI GROUP, INC.
     
 
By:
 
/s/ Hanying Li
     
Hanying Li
     
Chair and Chief Executive Officer
 
Dated: December 30, 2015
 
 
 
 
Equity Transfer Agreement
 
Party A (Transferor) : Wuhan Aoxin Tianli Enterprise Investment Management Co., Ltd
Party B (Transferee 1) : Jin Wu
       (Transferee 2) : Li-Na Deng
       (Transferee 3): Wuhan Orange Optical Networking Technology Development Co., Ltd.
Party C (Transfer Target): Wuhan Optical Valley Orange Technology Co., Ltd.

WHEREAS, Party A legally owns 95% equity interest of Party C, and Party A voluntarily wants to transfer 95% equity interest of Party C to Party B; AND
 
WHEREAS, Party B agrees to accept the 95% equity interest of Party C (Transferee 1, Transferee 2 and Transferee 3 agree to accept 30% , 15% and 50% equity interest respectively); AND
 
WHEREAS, the Board of Shareholders of Party A also consents to transfer 95% equity interest of Party C to Party B;
 
NOW, THEREFORE, in consideration of the foregoing premises and the friendly negotiations among Party A, B and C, the following equity transfer agreement is entered in accordance with the principle of equality and mutual benefit.

Section I Equity Transfer
 
1.
Party A consents to transfer 95% equity interest of Party C to Party B, Party B agrees to accept the equity interest;
 
2.
The above-mentioned equity interest shall include all the attached interests and rights under that equity interest, and shall be free and clear of (including, but not limited to) all liens, pledges, encumbrances, charges, restrictions or known claims of any kind, nature or description.
 
3.
When the agreement takes effect, Party A shall not burden any obligations and responsibilities for the operational management and claims and Debts of Party C.

Section II Transferring Price and the Payment Methods
 
1. Upon the terms and subject to the conditions of this Agreement, Party A agrees to transfer the 95% equity of Party C to Party B at the price of RMB 47.5 million Yuan, Party B agrees the price for the equity interest.
 
2.  Party B agrees to pay the total purchase price to Party A within 7 days after the execution of this agreement. Party A agrees that Party B can start to process the business registration upon the payment of the purchase price.
 
 
 
 

Section III Representations of Party A
 
1.
Party A is the exclusive owner of the transferring equity set forth in Section I.
 
2.
From the effective date of the agreement, Party A shall fully quit from the operations of Party C, and shall not have the rights of the distribution of the assets, properties and profits.
 
3.
The 403,000 “earn-out” shares of Party A that were deposited into escrow under the name of Party B (Transferee 2) will be delivered to Party B (Transferee 2) at the end of March, 2017 as previously promised in the Stock Purchase Agreement.

Section IV Representations of Party B
1.    Party B acknowledges and complies with the Amended Articles of Association of Party C;
2.    Party B ensures to pay the purchase price in terms of the payment deadline and method stipulated in Section II.

Section V Expense from the Equity Transfer
All the parties agree all the transferring fees and related expenses shall be undertaken by Party C.

Section VI Liability for Breach of Contract
1. If any party violates or fails to implement any clauses of the agreement, the breaching party should indemnify all the economic losses of the non-breaching party;
 
2. If party B fails to pay the equity purchase price timely according to the regulations of Section II, party A shall have the right to charge the overdue fine at the rate of 5‰ per day commencing the date of the deadline stipulated in Section II. When Party B pays the overdue fine, but the loss caused to Party A is over the overdue fine, or other damages are caused due to the breaching of Party B, it shall not impact Party A to claim for the indemnification regarding to the excess portion between the overdue fine and the loss and other damages.

Section VII Confidentiality
Both Parties shall have the obligations to keep confidential regarding each party’s commercial information acquired during the performing of the agreement, the confidentiality is still valid and effective upon the termination of the agreement. Should any party violates the confidential clause and causes loss to the other party, it should undertake all the charges and losses of the other party.
 
Section VIII Effective Clauses and Miscellaneous
1. This agreement shall be effective upon the execution of Party A, Party B and Party C.
2. Any disputes caused by the implement of this agreement must be first settled by Party A and Party B pursuant to the principle of friendly negotiations. In case no such settlement can be reached, either party has the right to file a suit to the People’s court where Party C is located. 
3. This agreement is in quintuplicate, each of the parties holds one copy, and all of which shall be deemed to be an original and share the same legal effect.
 
Party A (Transferor): Wuhan Aoxin Tianli Enterprise Investment Management Co., Ltd /s/
Legal Person or authorized representative: Hanying Li /s/

Party B (Transferee 1): Jin Wu /s/
       (Transferee 2): Li-Na Deng /s/
       (Transferee 3): Wuhan Orange Optical Networking Technology Development Co., Ltd. /s/

Party C (Transfer Target): Wuhan Optical Valley Orange Technology Co., Ltd.   /s/
Legal Person or authorized representative: Hai Liu   /s/


Date: December 29, 2015
 
 
 
 
Letter of Agreement
 
Party A:  Aoxin Tianli Group, Inc.
 
         Wuhan Aoxin Tianli Enterprise Investment Management Co., Ltd
 
Party B:  Li-Na Deng   Hai Liu
 
Party C:  Wuhan Optical Valley Orange Technology Co., Ltd.
 
WHEREAS, Party A holds 95% equity interest in Party C; Party B is the original shareholder and management of Party C and holds 403,000 common shares of Party A after Party A acquired Party C in August, 2014. The 403,000 shares were deposited into escrow (the “Earn-out Shares”) to be held for disbursement to Party B upon Party C achieving certain Target Net Income in each of the fiscal years ending December 31, 2014, 2015 and 2016.
 
WHEREAS, Party A intends to sell its 95% equity interest in Party C to Party B and other third parties;
 
THEREFORE, in consideration of the foregoing premises and the friendly negotiations between Party A and B, the following agreement is entered:
 
 
1.
If Party A sells the above-mentioned equity interest successfully, the previous Escrow Agreement executed between Party A and Party B will be cancelled automatically and the 403,000 shares of Party A will be delivered to Party B. However, the Earn-out shares can’t be released until the end of March 2017 as previously promised in the Stock Purchase Agreement;
 
 
2.
If Party A doesn’t sell the above-mentioned equity interest successfully, the previous Escrow Agreement will continue to be effective.
 
Party A:  Aoxin Tianli Group, Inc.
 
        Wuhan Aoxin Tianli Enterprise Investment Management Co., Ltd (seal)
 
Legal person or authorized representative: Hanying Li (signature)
 
Party B:  Li-Na Deng   Hai Liu   (signature)
 
 
December 25, 2015
 
 
 
Agreement for Terminating the Equity Transfer Agreement
 
Party A : Wuhan Aoxin Tianli Enterprise Investment Management Co., Ltd
 
Party B : Guangxi Hongzhen Investment Co., Ltd
 
Upon friendly negotiations between Party A and B, the following agreement regarding the equity transfer of Hubei Hang-ao Servo-valve Manufacturing Technology Co., Ltd (“Hang-ao”) is entered in accordance with the principle of equality and mutual benefit.
 
I. According to the Equity Transfer Agreement executed between Party A and Party B on November 13, 2015, Party A would transfer its 88% equity interest of Hang-ao (“targeted equity interest”) to Party B at the price of RMB 48.4 million Yuan (“Consideration”). After the execution of the Equity Transfer Agreement, Party B has paid RMB 4 million Yuan to the bank account designated by Party A as the earnest money deposit. Considering Party B prepared to get Hang-ao listed on the NEEQ (the National Equities Exchange and Quotations), in the process of the due diligence, Party B found Hang-ao couldn’t get its house property and land ownership certificates before the deadline (December 15, 2015) described in the previous Equity Transfer Agreement, however, the NEEQ requires the ownership certificates of all the house and land assets, which caused the failure of the above-mentioned deal. After the discussion between Party A and Party B, both Parties agree to terminate the previous Equity Transfer Agreement and the transfer of the targeted equity interest of Hang-ao.
 
II. In terms of the negotiation, Party A agrees to return the RMB 4 million Yuan within 7 work days after the termination of the Equity Transfer Agreement.
 
III. As per promise between Party A and Party B, if Party A is still willing to sell its targeted equity interest and Party B is still willing to buy the targeted equity interest after Party A gets the land and house property certificates in the future, Party B has the right of first refusal.
 
IV. Both Parties shall have the obligations to keep confidential regarding each party’s commercial information acquired during the performing of the agreement, the confidentiality is still valid and effective upon the termination of the agreement. Should any party violates the confidential clause and causes loss to the other party, it should undertake all the charges and losses of the other party.
 
 
 
 
 
V.  Effective Clauses and Miscellaneous
 
1. This agreement shall be effective upon the execution of Party A and Party B.
 
2. Any disputes caused by the implement of this agreement must be first settled by Party A and Party B pursuant to the principle of friendly negotiations. In case no such settlement can be reached, either party has the right to file a suit to the People’s court where Party A is located. 
 
3. This agreement is in duplicate, each of the parties holds one copy, and all of which shall be deemed to be an original and share the same legal effect.
 
[ Remainder of Page Intentionally Left Blank]
 
【 Signature Page 】
 
 
Party A: Wuhan Aoxin Tianli Enterprise Investment Management Co., Ltd
 
Legal Person or authorized representative: Hanying Li (signature)
 
Date: December 25, 2015
 
 
Party B : Guangxi Hongzhen Investment Co., Ltd
 
Legal Person or authorized representative: Hanzhi Shao (signature)
 
Date: December 25, 2015
 
 
 
 
Aoxin Tianli Group, Inc. Announces the Divestiture of OV Orange and the Cancellation of Hang-ao Sale
 
WUHAN CITY, China, Dec. 30, 2015 /PRNewswire/ -- Aoxin Tianli Group, Inc. (NASDAQ:ABAC) ("Aoxin Tianli" or the "Company"), a company focused on hog farming in China, today announced that it has executed an equity transfer agreement (the “Equity Transfer Agreement”) to sell the Company’s 95% equity interest in Wuhan Optical Valley Orange Technology Co., Ltd. (“OV Orange”) to a group of third party investors (collectively, the “Transferees”). Pursuant to the Equity Transfer Agreement entered into by and between the Company and the Transferees on December 29, 2015, the Company agreed to transfer 95% of the equity interests in OV Orange for a total consideration of RMB47.5 million (approximately $7.3 million). To facilitate the transaction, the Company also agreed to waive the earn-out provisions set forth in the Stock Purchase Agreement executed on August 26, 2014 (please refer to the Company’s SEC filing at: http://www.sec.gov/Archives/edgar/data/1486299/000119380514001769/e612663_ex10-1.htm ) and to release the 403,000 “earn-out” shares of the Company’s common stock that are currently held in escrow to Ms. Li-Na Deng at the end of March 2017. The Company’s Board of Directors voted in favor of the transaction on December 29, 2015.
 
Additionally, the Company announced that it and Guangxi Hongzhen Investment Co., Ltd. (“Guangxi Hongzhen”) have agreed to terminate the Equity Transfer Agreement, previously entered into by them on November 13, 2015, whereby Guangxi Hongzhen was to purchase the Company’s interest in Hubei Hang-ao Servo-valve Manufacturing Technology Co., Ltd.   (please refer to the Company’s SEC filing at: http://www.sec.gov/Archives/edgar/data/1486299/000119380515001884/e614246_ex10-1.htm ) . The Agreement was terminated at the request of Guangxi Hongzhen as a result of the inability to obtain proper land use permits and deeds for Hang-ao’s properties as a result of the failure of the developer of the industrial park in which Hang-ao is located to complete the development of the industrial park and related permitting procedures. As a result, Hang-ao remains an 88% owned subsidiary of the Company.
 
About Aoxin Tianli Group, Inc.
 
Aoxin Tianli Group, Inc. (the "Company"), previously known as Tianli Agritech, Inc., is currently a diversified company with businesses in hog farming, manufacturing and marketing of electro-hydraulic servo-valves, and the development of optical fiber hardware and software solutions. Aoxin Tianli is in the process of disposing of its assets unrelated to hog farming and refocusing on its hog farming business and related activities.  Through its wholly owned subsidiary, Wuhan Fengze Agricultural Science and Technology Development Co., Ltd., the Company engages in the breeding, raising and selling of breeder and market hogs in China and is developing a retail channel for its pork products including high-value, black hog meat.
 
Forward-Looking Statements
 
This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulations, and other risks contained in reports filed by the company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by this cautionary statement and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
 
For more information, please contact:
 
Aoxin Tianli Group, Inc.
Email: abac_ir@163.com