UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 10, 2021
SCIENTIFIC ENERGY, INC.
(Exact name of registrant as specified in its charter)
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Utah |
001-31990 |
87-0680657 |
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(State or other Jurisdiction of Incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
27 Weldon Street
Jersey City, New Jersey 07306
(Address of principal executive offices)
(852) 2530 - 2089
(Telephone number, including area code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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N/A |
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N/A |
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N/A |
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:
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☐ |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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☐ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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☐ |
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 1934 (§240.12b-2 of this chapter).
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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. ☐
Item 1.01 Entry into a Material Definitive Agreement.
On May 10, 2021, Scientific Energy, Inc. (the “Company”) entered into a share purchase agreement (the “Purchase Agreement”), by and among the Company, Macao E-Media Development Company Limited, a company registered in Macao (“MED”), and the shareholders of MED (the “MED Shareholders” and, together with MED, the “Sellers”), whereby the Company acquired from the Sellers 98.75% of the issued and outstanding share capital of MED (the “MED Shares”).
As consideration for the MED Shares, the Company agreed to issue the Sellers, or its assigns, in a total of 131,337,500 shares of the Company’s restricted common stock, par value $0.01 per share, at a consideration of $0.50 per share, in the aggregate consideration of $65,668,750 (the “Purchase Price”).
As a result of this acquisition, MED becomes a 98.75% owned subsidiary of the Company.
A copy of the Share Purchase Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.
MED was founded at Macau in 2011. Its main area of business includes food and grocery order-pickup-delivery services from local restaurants, supermarkets and hotels.
June 2016: AOMI App, officially owned and operated by MED, opens and becomes the sole local cooperative partner of Dianpin in Macau.
April 2017: AOMI App becomes the most downloaded app, and the most popular app in Apple App Store (Macau).
March 2018: MED’s monthly Gross Merchandise Volume (GMV) reaches $2.5 million US Dollars.
March 2019: MED’s monthly GMV amounts to $5 million US Dollars.
July 2020: MED’s monthly GMV exceeds $9 million US Dollars and its registered users reaches 400,000.
September 2020: “AOMI Supermarket” launches. Its three core businesses of “Food Delivery + Goods Shipment + Supermarket” are formed.
Within 2020, AOMI App reaches $100 million US Dollars in annual GMV. AOMI App serves approximately 2000 local restaurants or stores. Over 6 million users have downloaded AOMI App. Over 450,000 users have registered in AOMI App. MED’s Monthly Active User (MAU) reaches 300,000, and its maximum number of daily order/shipment has reached 18000. AOMI App has already established itself as the biggest and most successful food-delivery and local life platform in Macau. Meanwhile, MED has built a system of real time logistics and local delivery, which creates for the customers a life-style featured with convenience. At the same time, MED helps other business to increase their operation efficiency, and reduce their operation costs.
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MED has five subsidiaries, each of which is in charge of respective area such as Development & Maintenance, Marketing & Operation, Logistics & Delivery, Payment & Clearance, Emerging Market Business Development. MED has over 500 employees, among which 300 are delivery man, and remaining 200 work as IT or management department.
The market share of AOMI App in Macau has reached over 70%, and MAU exceeds 200,000. MED carries out food delivery and coupon publishing/purchasing services to over 2,000 restaurants. MED has built solid strategic relationship with banks and other financial institutions, accepting multiple currencies including RMB, the Chinese currency, in its payment and clearance. MED has cumulated abundant experience of offline promotion and online operation over last several years. Therefore, MED is in the process of researching overseas market, and plans to duplicate AOMI pattern in the due course.
MED’s summarized financial information for the most recent two years is as follows (in U.S. dollars):
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Balance Sheets: |
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December 31, 2020 |
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December 31, 2019 |
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Property, plant and equipment, net |
$ |
106,553 |
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69,312 |
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Long term investment |
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12,393 |
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- |
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Intangible assets |
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776,002 |
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512,993 |
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Inventory |
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222,809 |
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91,324 |
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Amount due from related parties |
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500,235 |
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302,968 |
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Accounts receivable |
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565,665 |
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274,799 |
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Deposits, prepayment and other receivable |
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795,537 |
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515,980 |
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Cash and cash equivalents |
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1,434,916 |
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1,124,119 |
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Total assets |
$ |
4,414,110 |
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2,891,494 |
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Accounts payable |
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5,272,457 |
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4,575,584 |
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Advance from customers and other |
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1,670,154 |
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1,993,113 |
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Long term loan |
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1,150,321 |
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426,317 |
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Total liabilities |
$ |
8,092,932 |
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6,995,014 |
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Net liabilities |
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(3,678,822) |
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(4,103,520) |
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Statement of Operations: |
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December 31, 2020 |
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December 31, 2019 |
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Revenue |
$ |
19,161,158 |
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10,836,069 |
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Cost of sale |
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(10,540,789) |
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(7,244,446) |
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Gross profit |
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8,620,369 |
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3,591,623 |
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Operating expense |
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(8,996,671) |
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(5,822,202) |
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Net loss from operations |
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(376,302) |
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(2,230,579) |
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Other income (expense) , net |
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908,907 |
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815,168 |
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Net income (loss) |
$ |
532,607 |
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(1,415,411) |
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Item 2.01 – Completion of Acquisition or Disposition of Assets
On May 10, 2021, the Company executed the Share Purchase Agreement with MED’s shareholders. The information contained in Item 1.01 of this Current Report on Form 8-K regarding the acquisition of MED is incorporated by reference into this Item 2.01.
Item 3.02 Unregistered Sales of Equity Securities.
The information contained in Item 1.01 above is incorporated by reference into this Item 3.02. The Company’s common stock shares were issued to the shareholders of MED in reliance on the exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
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Exhibit No. |
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Description |
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10.1 |
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Share Purchase Agreement dated May 10, 2021, by and among the Company, Macau E-Media Development Company Limited, and the shareholders of Macau E-Media Development Company Limited named therein.
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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 hereunto duly authorized.
Scientific Energy, Inc.
By: /s/ Stanley Chan
Stanley Chan
Chief Executive Officer
May 10, 2021
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SHARE PURCHASE AGREEMENT
THIS SHARE PURCHASE AGREEMENT (hereinafter the “Agreement”) is made by and entered into among:
Scientific Energy, Inc., a Utah corporation (hereinafter the “SCGY” or “Purchaser”);
Macao E-Media Development Company Limited (澳门网络传媒发展有限公司), a Macau corporation (hereinafter the “AOMI”) and its five subsidiaries, as defined as below(collectively “Subsidiaries”, individually “Subsidiary”). AOMI and its five subsidiaries are collectively referred to as the “Target Companies”.
Mr. Jiang Hai Tao and other shareholders of AOMI (collectively the “Sellers”). Mr. Jiang Hai Tao, as AOMI’s founder, majority shareholder, CEO, and entrustee who nomimally holds the equity on behalf of the other shareholders, acting as the Sellers’ representative in this Agreement (hereinafter the “Sellers’ Representative”).
RECITALS
1.
Scientific Energy, Inc. is a company duly incorporated and existing under the laws of State of Utah, U.S.A., of which the shares are registered with United States Securities and Exchange Commission (hereinafter the “SEC”) and listed on OTC market in the United States, with its stock symbol as “SCGY”;
2.
Macao E-Media Development Company Limited is a company duly incorporated and existing under the laws of Macau SAR, China, of which its five subsidiaries are as follows:
i)
SQUIRREL LOGISTICS COMPANY LIMITED (松鼠物流有限公司), a company duly incorporated and existing under the laws of Macau SAR, China, of which 99% shares are owned by AOMI and remaining 1% owned by AOMI’s related-party;
ii)
GREEN SUPPLY CHAIN MANAGEMENT COMPANY LIMITED (绿色供应链有限公司的股份), a company duly incorporated and existing under the laws of Macau SAR, China, of which 99% shares are owned by AOMI and remaining 1% owned by AOMI’s related-party;
iii)
MACAO CHINA FINANCIAL CONSULTANCY COMPANY LIMITED (澳中金融咨询有限公司), a company duly incorporated and existing under the laws of Macau SAR, China, of which 99% shares are owned by AOMI and remaining 1% owned by AOMI’s related-party;
iv)
Zhuhai Chengmi Technology Company Limited (珠海城觅科技有限公司), a company duly incorporated and existing under the laws of China, of which 100% shares are owned by AOMI;
v)
Zhuhai Migua Technology Company Limited (珠海市蜜瓜科技有限公司), a company duly incorporated and existing under the laws of China, of which 100% shares are owned by Zhuhai Chengmi Technology Company Limited, therefore indirectly 100% owned by AOMI.
1.
Sellers, collectively as AOMI’s majority shareholders, representing 98.75% ownership of AOMI, and by extension, AOMI’s respective ownership on all and each of Subsidiaries.
2.
Each of Sellers agrees jointly and severally to sell to Purchaser 98.75% AOMI’ equity shares and its respctive ownership on Subsidiaries, for a total consideration of Sixty-Five Million Six Hundred and Sixty-Eight Thousand Seven Hundred and Fifty US Dollar ($65,668,750.00 USD), in exchange of One Hundred and Thirty-One Million Three Hundred and Thirty-Seven Thousand Five Hundred (131,337,500) SCGY shares newly issued by SCGY, each of which valued at Fifty US Cent ($0.5 USD). Purchaser agrees to newly issue and transfer to Sellers One Hundred and Thirty-One Million Three Hundred and Thirty-Seven Thousand Five Hundred (131,337,500) SCGY shares, of which the total value amounts to Sixty-Five Million Six Hundred and Sixty-Eight Thousand Seven Hundred and Fifty US Dollar ($65,668,750.00 USD), in exchange of 98.75% of AOMI’ equity shares and its respctive ownership on Subsidiaries.
3.
Mr. Jiang Hai Tao, as Sellers’ Representative, has been duly and lawfully authorized by the remainings of Sellers, acting on their behalf, to take such steps, as in his own judgement may be necessary, appropriate or desirable to enter into this Agreement.
4.
Mr. Jiang Hai Tao, as founder, CEO, and member of Board of Directors of Target Companies, also represents Target Companies in the Agreement.
5.
In consideration of the foregoing and mutual negotiation between SCGY and Sellers, subject ot Article 6 (4) and Article 7 (6), in terms of SCGY purchasing 98.75% of the equty shares of AOMI and its respective ownership on Subsidiaries from Sellers, this Agreement is hereby executed and entered into by and among Parties as of May 10, 2021, and states as follows:
Article 1
Sellers agree to sell to SCGY 98.75% of AOMI’ shares and its respctive ownership on Subsidiaries, for a total value of Sixty-Five Million Six Hundred and Sixty-Eight Thousand Seven Hundred and Fifty US Dollar ($65,668,750.00 USD), in exchange of One Hundred and Thirty-One Million Three Hundred and Thirty-Seven Thousand Five Hundred (131,337,500) SCGY shares newly issued by SCGY, with each SCGY share valued at Fifty US Cent ($0.5 USD), and therefore total consideration of Sixty-Five Million Six Hundred and Sixty-Eight Thousand Seven Hundred and Fifty US Dollar ($65,668,750.00 USD).
Article 2
Subject to the execution of this Agreement, all and each of Target Companies shall immediately and effectively be deemed the subsidiaries of SCGY.
Article 3
Within twenty (20) business days after the execution of this Agreement, Sellers shall file the applications with relevant government authorities, and obtain the approvals from such authorities, regarding the change of shareholders for each of Target Companies as set out in this Agreement.
Article 4
“Closing”: means the completion of the transfer of shares of Target Companies from all and each of Sellers to Purchaser, as required and approved by Macau Commerce and Movable Property Registry or other relevant government authorities.
“Closing Date”: means the date on which the Closing shall take place.
Subject to Article 3, on the Closing Date, Sellers shall deliver to Purchaser:
(1)
Business Regstration Certificate of Target Companies, newly issued by Macau Commerce and Movable Property Registry, or other equivalent government authorities, indicating Purchaser as the rightful shareholder of Target Companies;
(2)
Aritcles of Association of Target Companies, indicating Purchaser as the rightful shareholder of Target Companies;
(3)
any other evidence Purchaser might require, indicating Purchaser as the rightful shareholder of Target Companies.
Article 5
Subject to the instructions by the Sellers, within four (4) business days after Closing Date, SCGY shall report to SEC regarding the shares newly issued to Sellers; and, as required by Sellers and subject to the name-list provided by Sellers, SCGY shall notify such share issurance to its stock transfer agent, which is Securities Transfer Corporation, and deliver to Sellers share certificates.
Article 6
SCGY hereby represents and warrants to Sellers:
(1)
All the SCGY stocks newly issued to Sellers, shall bear and contain complete and intact legal and beneficial rights, titles and interests, and shall be free from and clear of all liens.
(2)
Prior to the execution of Agreement, SCGY had delivered to Sellers all the relevant information about SCGY. SCGY hereby represents all the provided information complete and correct, among which the financial statements for the years ended December 31, 2020 and 2019 had been audited by a qualified auditor whom is registered with the U.S. Public Company Accounting Oversight Board (“PCAOB”). These information had been filed with the SEC.
(3)
Other than what had been disclosed in the financial reports, SCGY is free from any other liabilities, obligations or legal suits.
(4)
SCGY Board of Directors has approved, and deems it in the best interests of SCGY to enter into this Agreement.
Article 7
Sellers hereby represents and warrants to SCGY:
(1)
All the shares of Target Companies sold to SCGY, shall bear and contain complete and intact legal and beneficial rights, titles and interests, and shall be free from and clear of all liens.
(2)
Prior to the execution of Agreement, Sellers had delivered to SCGY all the relevant information about Target Companies. Sellers hereby represents all the provided information complete and correct, among which the financial report of 2019 and 2020 had been already audited by a qualified and certified auditor.
(3)
Other than what had been disclosed in the financial reports, all or any company of Target Companies are free from any other liabilities, obligations or legal suits.
(4)
Sellers collectively own 98.75% of equity shares of AOMI, and by extension, its respective ownership of Subsidiaries. Other than the shares which had been issued already, all or any company of Target Companies have not, in any possible way, issued any other shares, options or any forms of securities that could lead to the dilution of shares of all or any company of Target Companies.
(5)
Each Board of Directors of all or any company of Target Companies has approved, and deems it in the best interests to enter into this Agreement.
Article 8
Sellers understand and agree that, in pursuant to the Securities Act of 1933, the SCGY shares newly issued by SCGY, with the sole purpose of acquiring Target Companies, shall state on the back of its share certificates as follows:
“The Shares have not been registered under the Securities Act, or any state securities laws. They may not be sold or offered for sale in the absence of an effective registration statement as to the Securities under said Act and any applicable state securities law or an exemption from such registration under said act. The issuer of these shares may require an opinion of counsel reasonably satisfactory to the issuer that such offer, sale or other transfer otherwise complies with the Securities Act and any applicable state securities laws.”
Article 9
Unless is otherwise required by the laws or regulations, without prior written consent by other party, either party shall not disclose to any other third party any clauses under the Agreement, or any other business confidential information that party has acquired during the course of this Agreement.
Article 10
This Agreement immediately turns effective and binding among Parties upon the execution of Parties. This Agreement cannot be arbitrarily terminated or amended by either Party, and remain effective, unless such termination or amendment is approved in writing by each of the Parties.
Article 11
Supplementary agreements may be executed by Parties to address any outstanding matters. This Agreement and any other supplementary agreement constitute the entire agreement, bear the same legal binding force, and supersede all prior agreements and undertakings.
Article 12
This Agreement shall be governed by and construed in accordance with the laws of Macau SAR, China, without giving effect to any choice or conflict of law provision or rule (whether of Macau or any other jurisdiction) that would cause the application of the laws of any state or jurisdiction other than Macau SAR, China.
IN WITNESS WHEREOF, the Parties have caused this Share Purchase Agreement to be executed as of the date first written above by their respective duly authorized representative.
PURCHASER:
Scientific Energy, Inc.
By: /s/ Stanley Chan
Name: Stanley Chan
Title: Chief Executive Officer
Date: 10 May 2021
SELLERS’ REPRESENTATIVE:
By: /s/ Jiang Hai Tao
Name: Jiang Hai Tao
Date: 10, May 2021
COMPANY:
Macao E-Media Development Company Limited
By: /s/ Jiang Hai Tao
Name: Jiang Hai Tao
Title: Chief Executive Officer
Date: 10 May 2021