SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported):June 25, 2019
IT TECH PACKAGING, INC.
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation)
|(Commission File Number)||(IRS Employer Identification No.)|
Science Park, Juli Road
Xushui District, Baoding City
Hebei Province, People’s Republic of China
|(Address of principal executive offices)||(Zip Code)|
(Registrant’s telephone number, including area code)
(Former name or former address, if changed since last report)
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 ( see General Instruction A.2. below):
☐ 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))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
|Title of Each Class||Trading Symbol(s)||Name of Each Exchange on Which Registered|
|Common Stock||ITP||NYSE MKT|
Item 1.01 Entry into a Material Definitive Agreement.
On June 25, 2019, Hebei Baoding Dongfang Paper Milling Company Limited (“Dongfang Paper”), the major operating entity of IT Tech Packaging, Inc. (the “Company”), entered into an acquisition agreement (the “Agreement”) with Hebei Tengsheng Paper Co. Ltd. (“Tengsheng Paper”), pursuant to which Dongfang Paper shall acquire 100% equity interests in Tengsheng Paper and all right, title and interest in and to all assets owned by Tengsheng Paper (the “Purchased Equity and Assets”).
In consideration for the Purchased Equity and Assets, Dongfang Paper shall pay to Tengsheng Paper a total purchase price of RMB320 million (approximately $47 million) (the “Purchase Price”) within six months of the execution of the Agreement. If Dongfang Paper is unable to deliver the full payment of the Purchase Price within six months of the execution of the Agreement, the remainder of the Purchase Price shall bear interest at a rate of 14% per annum; alternatively, subject to further mutual agreement, such remainder of the Purchase Price shall be paid by the issuance of a number of shares of common stock of the Company, the number of which shall be determined based on a share price of $5.00 per share of the Company’s common stock, provided, however, that the market value of the Company’s common stock shall be at least $6.00 per share.
Further, Dongfang Paper shall entrust the existing management of Tengsheng Paper to continue operating the business of Tengsheng Paper and the existing legal representative of Tengsheng Paper shall continue acting as the legal representative of Tengsheng Paper. Dongfang Paper shall entrust the prior shareholders of Tengsheng Paper to represent it to hold and exercise all shareholder’ rights to which it is entitled as the shareholder of Tengsheng Paper.
Item 8.01 Other Events.
On June 27, 2019, the Company issued a press release announcing it had signed the aforesaid Agreement with Tengsheng Paper. A copy of such press release is attached to this report as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits .
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 hereunto duly authorized.
|IT TECH PACKAGING, INC.|
|Date: June 27, 2019||By:||/s/ Zhenyong Liu|
|Title:||Chief Executive Officer|
Contract No.: HB-2019-06-25
|Transferor:||Hebei Tengsheng Paper Co., Ltd|
(Hereinafter referred to as Party A)
|Transferee:||Hebei Baoding Dongfang Paper Milling Co., Ltd|
(Hereinafter referred to as Party B)
Through friendly negotiation, in line with the principles of equality, voluntariness, compensation and good faith, the two parties have reached the following agreement on the acquisition of 100% equity and all assets:
Item I Basic Information of Acquisition
|1.||Party A is a limited liablity company established and validly existing on April 07, 2011 in accordance with The Company Law Of The People’s Republic Of China and other relevant laws and regulations. Its registered capital is RMB 50 million. The legal representative is Jie Ping.|
|2.||Party A owns 100% equity of Hebei Tengsheng Paper Co., Ltd. As of the date of signing this agreement, all shareholders of Party A have paid all the investment in full amount and legally own all and complete rights of the company in accordance with the relevant laws, regulations and The Articles Of Association .|
|3.||Party A intends to transfer its company to Party B through the manner of transfering 100% equity and all assets; Party B agrees to acquire 100% equity and all asstes held by Party A in accordance with the terms of this agreement, and Party B should be entitled 100% of the equity and corresponding shareholder rights of Hebei Tengsheng Paper Co., Ltd after acquiring the above mentioned equity and assets.|
Item II Status fo Relevant Rights
|1.||Party A confirms that it legally owns 100% equity and all the assets to be acquired under this agreement;|
|2.||Party A will not file for registration of changes with Administration of the industry and commerce and its management will remain unchanged, and Party B will entrust Party A to continue production and operation management. Party B entrusts the former legal representative and executive director of Party A to act on behalf of Party B as its legal representative and executive director; Party B entrusts original shareholders Ping Jie and Ma Yundong to hold all the equity on its behalf (see Power of Attorney attached hereto as Appendix 1).|
Item III The Term of Acquisition
|1.||The acquisition period of 100% equity and all assets mentioned in this contract is permanent with no time limit. After this contract takes effect, 100% equity and all assets of Party A should belong to Party B, whose legitimate rights and interests are protected by national laws.|
|2.||Unless otherwise provided in this contract, Party A should not withdraw 100% equity and all assets during the acquisition period.|
Item IV Price of Acquisition
|1.||The two parties confirm that the total acquisition price of 100% equity and all assets involved in this agreement is RMB 320 million (Say Three Hundred and Twenty Million Yuan Only), and should be paid within six months after the agreement signed.|
|2.||After signing this agreement, the permission to increase or decrease the registered capital(?) by Party B shall have nothing to do with Party A, and should not be used as the basis for increasing or decreasing the acquisition amount paid by Party B to Party A.|
Item V Payment Term
(1) Within 6 months upon execution of this Agreement, Party B must pay in full the acquisition price of RMB 320 million.
(2) If the acquisition price is not paid in full on time, the remaining balance shall be charged an annual interest rate of 14% until fully paid; Party A may also accept the shares of stock of the listed company IT Tech Packaging Inc. IF the acquisition price has not been paid in full AND the stock of IT Tech Packaging Inc. has reached $6 per share; [in such case] the remaining balance of the acquisition price shall be converted to the corresponding number of shares at $5 per share and such number of shares must be transferred by Party B to Party A or Party A’s designee.
|2.||Party A must issue legal receipt of payment to Party B upon receiving Party A’s payment.|
Item VI Legal Status of The Acquisition
|1.||Rights and obiligations of 100% equity and all the assets should be transferred to Party B upon the agreement signed.|
|2.||Party A should guarantee that the agreeed equity and assets bear no legal defects, and that Party B should not face the risk of right obstacles and alike after the acquisition finished.|
|3.||Party A should guarantee that the background of such equity and assets and the actual situation of Hebei Tengsheng Paper Co., Ltd have been truthfully disclosed to Party B, without concealing any conditions that might adversely effect Party B’s exercise of the equity rights.|
|4.||All the representations, illustrations, assurance, promises and documents displayed and transferred to Party B are true and valid, without any falsehood, fabrication, concealing and omittance.|
Item VII Responsibility of Default
|1.||In accordance with the provision hereof, Party B should pay all payments required for the aquistion of 100% equity and all assets on time. It is deemed default if Party B fails to pay on time, and Party A has the right to teminate this agreement.|
|2.||Upon the signatures and prepayment received, Party A should perform its obligations hereunder and actively cooperate with Party B. If this agreement cannot be performed due to any reason on Party A’s part, it shall be considered default and Party A should bear the losses caused to Party B and pay 5% default penalty and return the payments made to Party B.|
Item VII Others
|1.||Any dispute arising from or in connection with this agreement should be settled amicably by the parties hereto through negotiation. If no agreement is reached through negotiation, both parties may file a lawsuit in the people’s court at the place where the agreement is signed.|
|2.||This Agreement is in quadruplicate and each party has two copies with the same legal effect.|
|3.||For outstanding issues, supplemental agreements with equal legal effect should be signed upon written consent from the two parties.|
|4.||This Agreement becomes into effect upon the signatures of both parties.|
|Party A (Seal)||Party B (Seal)|
|Hebei Tengsheng Paper Co., Ltd.||Hebei Baoding Dongfang Paper Milling Co., Ltd.|
|Legal Person: /s/ PING Jie||Legal Person: /s/ [not legible]|
|Entrusted Agent:||Entrusted Agent:|
|Date: June 25, 2019||Date: June 25, 2019|
(This page is the annex 1 of The “Acquisition Agreement” entered into between Hebei Tengsheng Paper Co.,Ltd and Hebei Baoding Dongfang Paper Milling Company., Ltd, Contract No. HB-2019-06-25 )
Annex 1: Power of Attorney
This is to certify that, on June 25, 2019, our Company reached an agreement with Hebei Tengsheng Paper Co., Ltd on the acquisition affaires of the enterprise, and signed the “Acquisition Agreement”. The contract NO. is HB-2019-06-25. The company has decided to entrust Jie Ping (ID No.: 130602198002200614), the former legal representative of Hebei Tengsheng Paper Co., Ltd, to continue to serve as the Company’s legal representative and executive director; and entrust the original shareholders of Hebei Tengsheng Paper Co., Ltd, Jie Ping and Yundong Ma, to hold all the equity on behalf of the Company.
|Hebei Baoding Dongfang Paper Milling Company., Ltd|
|Date: June 25, 2019|
Major Operating Entity of IT Tech Packaging, Inc. Enters Into Definitive Agreement To Acquire
Hebei Tengsheng Paper Co. Ltd.
BAODING, China, June 27 2019 /PRNewswire/ -- IT Tech Packaging, Inc. (NYSE MKT: ITP) (“IT Tech Packaging” or “the Company”), a leading manufacturer and distributor of diversified paper products in North China, today announced that Hebei Baoding Dongfang Paper Milling Company Limited (“Dongfang Paper”), the major operating entity of the Company, has entered into an acquisition Agreement (the “Agreement”) with Hebei Tengsheng Paper Co. Ltd. (“Tengsheng Paper”), pursuant to which Dongfang Paper shall acquire 100% equity interests in Tengsheng Paper and all right, title and interest in and to all assets owned by Tengsheng Paper (the “Purchased Equity and Assets”).
Tengsheng Paper is leasing its land of approximately 50 acres to the Company with a lease term of 15 years that expires in November 2027. After the completion of the acquisition, the PM8 production line will be transferred to Tengsheng Paper which as a wholly-owned subsidiary of Dongfang Paper, will focus on manufacturing and distribution of tissue paper in the future.
Pursuant to the Agreement entered into on June 25, 2019, in consideration for the Purchased Equity and Assets, Dongfang Paper will pay to Tengsheng Paper a total purchase price of RMB320 million (approximately $47 million) (the “Purchase Price”) within six months of the execution of the Agreement. Further, Dongfang Paper will entrust the existing management of Tengsheng Paper to continue operating the business of Tengsheng Paper and the existing legal representative of Tengsheng Paper will continue acting as the legal representative of Tengsheng. Dongfang Paper will entrust the prior shareholders of Tengsheng Paper to represent it to hold and exercise all shareholder’ rights to which it is entitled as the shareholder of Tengsheng Paper.
Mr. Zhenyong Liu, Chairman and Chief Executive Officer of IT Tech Packaging commented, “We have had a solid business partnership with Tengsheng Paper since 2012. With land use rights of 761.05 mu, we believe that Tengsheng Paper will offer us ample site and space for our tissue paper production lines. The acquisition of Tengsheng Paper shows our confidence in prospect of the Chinese tissue paper market and we also believe it paves the way for us to further penetrate into the tissue paper market.”
About IT Tech Packaging, Inc.
Founded in 1996, IT Tech Packaging, Inc. (“ITP”) is a leading manufacturer and distributor of diversified paper products in North China. Using recycled paper as its primary raw material (with the exception of its tissue paper products), ITP produces and distributes three categories of paper products: corrugating medium paper, offset printing paper and tissue paper products. With production based in Baoding and Xingtai in North China’s Hebei Province, ITP is located strategically close to the Beijing and Tianjin region, home to a growing base of industrial and manufacturing activities and one of the largest markets for paper products consumption in the country. ITP has been listed on the NYSE MKT since December 2009.
Safe Harbor Statements
This press release may contain forward-looking statements. These forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including risks outlined in the Company’s public filings with the Securities and Exchange Commission, including the Company’s latest annual report on Form 10-K. All information provided in this press release speaks as of the date hereof. Except as otherwise required by law, the Company undertakes no obligation to update or revise its forward-looking statements.
For more information, please contact:
At the Company