Unassociated Document
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 1934
Date of
Report (date of earliest event reported): January 23, 2009
GENESIS
PHARMACEUTICALS ENTERPRISES, INC.
(Exact
name of registrant as specified in charter)
Florida
(State or
other jurisdiction of incorporation)
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333-86347
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65-1130026
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(Commission File
Number)
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(IRS Employer
Identification No.)
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Middle
Section, Longmao Street, Area A, Laiyang Waixiangxing Industrial
Park
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Laiyang
City, Yantai, Shandong Province, People’s Republic of China
265200
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(Address
of principal executive offices and zip code)
(0086)535-7282997
(Registrant's
telephone number including area code)
(Registrant's
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 registrant under any of the following
provisions:
o Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o Soliciting
material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR
240.14a-12(b))
o Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o 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
January 23, 2009, Laiyang Jiangbo Pharmaceutical Co., Ltd. (“Laiyang Jiangbo”),
a limited liability company organized under the laws of the PRC and a wholly
owned subsidiary of Genesis Pharmaceuticals Enterprises, Inc. (the “Company”) entered
into an Assets Transfer Contract (the “Contract”) with Shandong Traditional
Chinese Medicine College (“Medicine College”) and Shandong Hongrui
Pharmaceutical Factory, a wholly owned subsidiary of Medicine College (“Shandong
Hongrui”), pursuant to which Laiyang Jiangbo will purchase the majority of the
assets owned by Hongrui, including all tangible assets, including without
limitation, all manufacturing and office buildings, land, equipment and
inventories and all rights to manufacture and distribute Hongrui’s 22
Traditional Chinese Medicines (“TCM”), for an aggregate purchase price of
RMB110million (approximately $16.1million) consisting of RMB66 million in cash
(approximately $9.6 million) and 643,651 shares of the Company’s common stock.
Because the current fair market value share price of the Company’s common stock
is approximately $2.6 million, the Company has valued the transaction at
approximately $12.2 million. A copy of the Contract is attached hereto as
Exhibit 10.1. The description of this Contract contained in this Current Report
on the Form 8-K is qualified in its entirety by reference to Exhibit 10.1. A
copy of the press release is attached hereto as Exhibit 99.1.
The
purchase will be consummated in stages following the receipt by the parties of
all required regulatory approvals including the approval of the Shandong
Province Food and Drug Administration (“SFDA”) and the approval of the Shandong
State Owned Assets Administration Department (“SSOAAD”). As of January 23, 2009,
this transaction had been approved by the SSOAAD and certain assets were
transferred to Laiyang Jiangbo. Pursuant to the terms of the Contract, the
purchase consideration will be paid to Medicine College as follows.
RMB20 million (approximately US$2.9 million) of the purchase price will be paid
to Medicine College in cash within one month of the initial transfer of assets
to Laiyang Jiangbo (by February 23, 2009). Another RMB46 million (approximately
$6.7 million) of the purchase price will be paid to Medicine College in cash
once the SFDA transfers the owner registration of Hongrui’s 22 TCM products from
Hongrui to Laiyang Jiangbo. The Contract provides that in the event that the
SFDA does not approve the transfer of the ownership of Hongrui’s 22 TCM products
from Hongrui to Laiyang Jiangbo that Laiyang Jiangbo may cancel the Contract and
rescind any transfers and payments previously consummated or made. The remaining
RMB44 million of the purchase price will be paid to Medicine College in the form
of 643,651 newly issued shares of the Company’s common stock within one year of
the date of the execution of the Contract.
Hongrui
was founded in 1971 as an affiliate of Medicine College. It has a 33,350 square
meter production
and distribution facility located in the eastern part of Laiyang city which
includes a 5,330 square meter plant and a 1,880 square meter warehouse. Hongrui
has approximately 120 employees. Hongrui produces a number of traditional
Chinese medicines in tablet, capsule, syrup, pill and cream form which are
widely used to cure gynecologic diseases, fever, cold and cough, pediatric
diseases, and for daily health care. Hongrui also developed a drug used to treat
bone and bone marrow inflammations for which it owns the intellectual property
rights and is the exclusive manufacturer in China.
The
purchase price for Hongrui was established through an independent appraiser
firm, Yantai Huada Certified Public Accountants, Ltd., in China.
On
January 23, 2009, pursuant to the Contract, Laiyang Jiangbo consummated the
purchase of the majority of the assets owned by Hongrui, including without
limitation, all manufacturing and office buildings, land, equipment and
inventories and all rights to manufacture and distribute Hongrui’s TCMs . The
information set forth in Item 1.01 of this Current Report on Form 8-K is
incorporated herein by reference in its entirety.
Item
3.02. Unregistered Sales of Equity Securities.
The
information pertaining to the Company’s shares of common stock in Item 1.01 is
incorporated herein by reference in its entirety. The shares of the Company’s
common stock issuable to Medicine College under the Contract will not be
registered under the Securities Act of 1933, as amended and may not be offered
or sold in the United States absent registration or an applicable exemption from
registration requirements. This Current Report on Form 8-K does not constitute
an offer to sell, or a solicitation of an offer to buy, any security and shall
not constitution an offer, solicitation or sale in any jurisdiction in which
such offering would be unlawful.
Item
9.01 Financial
Statements and Exhibits.
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Exhibit No.
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Description
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10.1
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Unofficial
Summary Translation of the Assets Transfer Contract dated as of January
23, 2009 by and among Laiyang Jiangbo Pharmaceutical Co., Ltd., Shandong
Traditional Chinese Medicine College and Shandong Hongrui Pharmaceutical
Factory, a wholly owned subsidiary of Medicine College
..
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99.1
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Press
Release dated January 29,
2009.
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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.
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GENESIS
PHARMACEUTICALS ENTERPRISES, INC.
By: /s/ Cao
Wubo
Name:
Cao Wubo
Title:
Chief Executive officer
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Dated:
January 29, 2009