Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
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Filed
by the Registrant
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þ
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Filed
by a Party other than the Registrant
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¨
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Check
the appropriate box:
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Preliminary
Proxy Statement
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Confidential,
For Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
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Definitive
Proxy Statement
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Definitive
Additional Materials
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Soliciting
Material Pursuant to §240.14a-12
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KIWA
BIO-TECH PRODUCTS GROUP CORPORATION
(Name
of
Registrant as Specified in Its Charter)
N/A
(Name
of
Person(s) Filing Proxy Statement, if other than the Registrant)
Payment
of Filing Fee (Check the appropriate box):
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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(1) |
Title
of each class of securities to which transaction
applies:
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(2) |
Aggregate
number of securities to which transaction applies:
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(3) |
Per
unit price or other underlying value of transaction computed pursuant
to
Exchange Act Rule 0-11
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(set
forth the amount on which the filing fee is calculated and state how it was
determined):
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(4) |
Proposed
maximum aggregate value of transaction:
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Fee
paid previously with preliminary
materials:
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule
0-11(a)(2) and identify the filing for which the offsetting fee was
paid
previously. Identify the previous filing by registration statement
number,
or the Form or Schedule and the date of its
filing.
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(1) |
Amount
previously paid:
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(2) |
Form,
Schedule or Registration statement no.:
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KIWA
BIO-TECH PRODUCTS GROUP CORPORATION
310
North, Indian Hill Blvd, Suite 702
Claremont,
California 91711-4611
[
●
],
2008
Dear
Stockholders:
You
are
cordially invited to attend the Annual Meeting of Stockholders of Kiwa Bio-Tech
Products Group Corporation, a Delaware corporation, to be held on [ ●
],
[
●
],
2008,
at 10:00 a.m. local time at our executive office located at Room 1702, Building
A, Beijing Global Trade Center, 36 North Third Ring Road, East Dongcheng
District, Beijing, People’s Republic of China.
The
matters to be acted upon at the Annual Meeting of Stockholders are described
in
the accompanying Notice of Annual Meeting and Proxy Statement. At the meeting,
we will also report on our operations and respond to any questions you may
have.
YOUR
VOTE IS VERY IMPORTANT. Whether
or not you plan to attend, it is important that your shares be represented.
Please sign, date and mail the enclosed proxy card as soon as possible in the
enclosed postage prepaid envelope in order to ensure that your vote is
counted.
If
you attend the meeting, you will, of course, have the right to vote your shares
in person.
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Very
truly yours,
Wei
Li
Chief
Executive Officer and
Chairman
of the Board
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NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO
BE HELD ON TUESDAY, NOVEMBER 11, 2008
KIWA
BIO-TECH PRODUCTS GROUP CORPORATION
310
North, Indian Hill Blvd, Suite 702
Claremont,
California 91711-4611
[
●
],
2008
Dear
Stockholders:
The
Annual Meeting of the Stockholders of Kiwa Bio-Tech Products Group Corporation,
a Delaware corporation, will be held on Tuesday, [ ●],
2008,
at 10:00 a.m. local time at our executive office located at Room 1702, Building
A, Beijing Global Trade Center, 36 North Third Ring Road, East Dongcheng
District, Beijing, People’s Republic of China. The purpose of the annual meeting
is to consider and vote upon each of the proposals outlined in this proxy
statement, including the proposal to:
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1.
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Elect
five nominees as nominated by the Board of Directors to serve a one-year
term on the Board of Directors set to expire at the 2009 annual meeting
of
stockholders and until their respective successors are elected and
qualified;
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2.
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Ratify
the selection and appointment of Mao & Company CPAs, Inc. (“Mao &
Co”) as our independent auditors for the fiscal year ended December
31,
2008;
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3.
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Approve
an amendment to our certificate of incorporation to increase the
number of
authorized shares of our common stock from 200,000,000 to 300,000,000
shares; and
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Transact
such other business as may properly come before the meeting or any
adjournment thereof.
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Only
stockholders of record at the close of business on September 22, 2008 will
be
entitled to notice of, and to vote at, the annual meeting and any adjournments
thereof.
Our
Proxy
Statement is enclosed. Financial and other information concerning the company
is
contained in the enclosed Annual Report on Form 10-KSB for the fiscal year
ended
December 31, 2007, as amended by Form 10-KSB/A filed on August 6,
2008.
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By
Order of the Board of Directors
Yvonne
Wang
Secretary
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YOUR
VOTE IS IMPORTANT
WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING, WE URGE YOU TO DATE AND SIGN THE ENCLOSED
PROXY CARD AND RETURN IT TO THE COMPANY AS PROMPTLY AS POSSIBLE IN THE ENCLOSED
STAMPED AND ADDRESSED ENVELOPE. THIS WILL ENSURE THE PRESENCE OF A QUORUM AT
THE
ANNUAL MEETING. THE GIVING OF A PROXY DOES NOT AFFECT YOUR RIGHT TO REVOKE
IT
LATER OR VOTE YOUR SHARES IN PERSON IN THE EVENT THAT YOU SHOULD ATTEND THE
MEETING.
PROXY
STATEMENT
FOR
THE
ANNUAL
MEETING OF STOCKHOLDERS
Tuesday,
November 11, 2008
KIWA
BIO-TECH PRODUCTS GROUP CORPORATION
310
North, Indian Hill Blvd, Suite 702
Claremont,
California 91711-4611
Table
of Contents
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Page
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GENERAL
INFORMATION
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1
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PROPOSAL
1 ELECTION OF DIRECTORS
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3
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PROPOSAL
2 RATIFICATION OF INDEPENDENT AUDITOR
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6
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PROPOSAL
3 APPROVAL OF INCREASE IN AUTHORIZED SHARES OF COMMON
STOCK
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7
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
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9
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CERTAIN
RELATIONSHIPS,
RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
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10
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EXECUTIVE
COMPENSATION
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12
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SECTION
16(A) BENEFICIAL OWNERSHIP COMPLIANCE
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15
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STOCKHOLDER
PROPOSALS FOR THE 2009 ANNUAL MEETING OF
STOCKHOLDERS
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15
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OTHER
BUSINESS
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16
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PROXY
STATEMENT
FOR
THE
ANNUAL
MEETING OF STOCKHOLDERS
[
●
],
[
●
],
2008
GENERAL
INFORMATION
This
Proxy Statement is furnished by the Board of Directors of Kiwa Bio-Tech Products
Group Corporation, a Delaware corporation, to holders of shares of our common
stock, in connection with the solicitation of proxies by the Board of Directors
for use at our 2008 Annual Meeting of Stockholders, to be held at 10:00 a.m.
local time on [ ●
],
[
●
],
at our
executive office located at Room 1702, Building A, Beijing Global Trade Center,
36 North Third Ring Road, East Dongcheng District, Beijing, People’s Republic of
China. These proxy materials will be available to stockholders by mail, via
e-mail or on internet, subject to their choice, on or about [ ●
],
2008.
References
herein to “we”, “us”, “our” or “the Company” refer to Kiwa
Bio-Tech Products Group Corporation
and its
wholly-owned and majority-owned subsidiaries unless the context specifically
states or implies otherwise.
Company
Background
We
are
the result of a share exchange transaction completed in March 2004 between
the
shareholders of Tintic Gold Mining Company (“Tintic”), a corporation originally
incorporated in the state of Utah on June 14, 1933 to perform mining operations
in Utah, and the shareholders of Kiwa Bio-Tech Products Group Ltd. (“Kiwa BVI”),
a company originally organized under the laws of the British Virgin Islands
on
June 5, 2002. The share exchange resulted in a change of control of Tintic,
with
former Kiwa BVI stockholders owning approximately 89% of Tintic on a fully
diluted basis and Kiwa BVI surviving as a wholly-owned subsidiary of Tintic.
Subsequent to the share exchange transaction, Tintic changed its name to Kiwa
Bio-Tech Products Group Corporation. On July 21, 2004, we completed our
reincorporation in the State of Delaware.
We
have
established two operating subsidiaries in China — Kiwa Bio-Tech Products
(Shandong) Co., Ltd. (“Kiwa Shandong”) in 2002, a wholly-owned subsidiary, and
Tianjin Kiwa Feed Co., Ltd. (“Kiwa Tianjin”) in July 2006, an 80% majority-owned
and controlled subsidiary.
Annual
Report
Our
annual report on Form 10-KSB for the fiscal year ended December 31, 2007, as
supplemented by our Form 10-KSB/A as filed on August 6, 2008, is enclosed with
this proxy statement.
Voting
Securities
Only
stockholders of record as of the close of business on [
●
],
2008
will be entitled to vote at the meeting and any adjournment thereof. As of
[
●
],
2008,
the number of outstanding shares of common stock of the Company was [
●
].
Each
holder of shares of our common stock is entitled to one vote for each share
of
common stock held with respect to the proposals presented in this proxy
statement.
Voting
of Proxies
All
valid
proxies received prior to the annual meeting will
be
voted. All shares represented by a proxy will be voted, and where a stockholder
specifies by means of the proxy a choice with respect to any matter to be acted
upon, the shares will be voted in accordance with the specification so made.
As
indicated on the enclosed proxy card, with respect to Proposal 1 relating to
the
election of directors, you may vote “FOR” all or some of the nominees or may
indicate “WITHHOLD” with respect to one or more of the nominees. With respect to
each of Proposal 2 and Proposal 3, you may vote “FOR,” or
“WITHHOLD”.
In
the
absence of specific instructions, proxies will be voted by the individuals
named
in the proxy “FOR”
the
election of each of the five specified director nominees in the case of Proposal
1, “FOR” the approval of our independent auditor in the case of Proposal 2,
“FOR”the
increase in our authorized common stock in Proposal 3, and in the discretion
of
the proxies named in the proxy card on all other matters that may properly
come
before the annual meeting.
Votes
Required for Approval of Proposals
Assuming
that a quorum of stockholders is present at the annual meeting, the five
director nominees receiving the greatest number of votes shall be elected to
the
Board of Directors, even without receiving a majority of the votes cast. The
affirmative vote of holders of a majority of the shares of common stock present
in person or by proxy and entitled to vote thereon at the annual meeting is
required for Proposal 2 and for other matters that properly come before the
annual meeting.
For
the
purpose of determining the vote required for approval of matters to be voted
on
at the annual meeting, shares held by stockholders who abstain from voting
on a
matter will be treated as being “present” and “entitled to vote” on the matter,
and, therefore, an abstention (withholding a vote as to all matters) has the
same legal effect as a vote against the matter. However, in the case of a broker
non-vote or where a stockholder withholds authority from his proxy to vote
the
proxy as to a particular matter, such shares will not be treated as “present” or
“entitled to vote” on the matter, and, therefore, a broker non-vote or the
withholding of a proxy’s authority will have no effect on the outcome of the
vote on the matter, other than to affect the existence of a quorum. A “broker
non-vote” refers to shares of our common stock represented at the annual
meeting in
person
or by proxy by a broker or nominee where such broker or nominee (1) has not
received voting instructions on a particular matter from the beneficial owners
or persons entitled to vote and (2) does not have discretionary voting power
on
such matter.
Quorum
Our
bylaws provide that a majority of all the shares of the stock entitled to vote,
whether present in person or represented by proxy, shall constitute a quorum
for
the transaction of business at the meeting. Abstentions and broker non-votes
will be counted as present for purposes of determining the presence of a quorum.
Revocability
of Proxies
Any
person giving a proxy in response to this solicitation has the power to revoke
it at any time before it is voted. Proxies may be revoked by any of the
following actions:
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·
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delivering
a written notice of revocation to our Corporate Secretary at our
principal
executive office located at 310 North Indian Hill Blvd, Suite 702,
Claremont, California 91711-4611;
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·
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delivering
a properly executed proxy showing a later date to our Corporate Secretary
at our principal executive office located at 310 North Indian Hill
Blvd,
Suite 702, Claremont, California 91711-4611; or
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·
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attending
the meeting and voting in person (attendance at the meeting will
not, by
itself, revoke a proxy).
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Solicitation
of Proxies
The
cost
of soliciting proxies will be borne by the Company. We will solicit stockholders
by mail through our regular employees, and will request banks and brokers,
and
other custodians, nominees and fiduciaries, to solicit their customers who
have
stock of the Company registered in the names of such persons and will reimburse
them for their reasonable, out-of-pocket costs. In addition, we may use the
services of our officers, directors, and others to solicit proxies, personally
or by telephone, without additional compensation.
PROPOSAL
1 ELECTION OF DIRECTORS
Five
directors are to be elected at the annual meeting, to hold office until the
next
annual meeting of stockholders and until their successors are elected and
qualified, or until their earlier resignation or removal. The accompanying
proxy
will be voted in favor of the following persons to serve as directors unless
the
stockholder indicates to the contrary on the proxy. We expect that each of
the
nominees will be available for election, but if any of them is not a candidate
at the time the election occurs, it is intended that the proxy will be voted
for
the election of another nominee to be designated by the Board of Directors
to
fill any such vacancy. Four of the director nominees are currently directors
of
the Company.
The
following persons have been nominated to be elected as directors at the annual
meeting:
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Name
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Age
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Title
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Wei
Li
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47
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Chief
Executive Officer and Chairman of the Board
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Xucheng
Hu
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46
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-
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Lianjun
Luo
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39
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Chief
Financial Officer and Director
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Yunlong
Zhang
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45
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Director
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Qi
Wang
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42
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Director
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Wei
Li
became
our Chief Executive Officer and Chairman of the Board on March 12, 2004. Prior
to the Tintic/Kiwa share exchange transaction, Mr. Li was the acting Chief
Executive Officer of Kiwa BVI since January 1, 2004. Mr. Li founded Kiwa BVI
to
capitalize on the growth of the ag-biotechnology industry in China. Prior to
founding Kiwa BVI, Mr. Li founded China Star Investment Group (“China Star”), an
entity which provides integrated financing services and/or venture investments
to growth businesses in China. Mr. Li served as President of China Star from
June 1993 to January 2004. In 1989, Mr. Li founded Xinhua International Market
Development Ltd., a company which engaged in investing in China’s high tech,
pharmaceutical, medical device, media, entertainment and real estate industries.
Mr. Li holds a bachelor of science degree in finance from Hunan Finance and
Economics University.
Xucheng
Hu
has been
appointed as Executive Director of New Capital International Investment Limited
since August 2003, a listed company on Hong Kong Exchanges. Prior to this
engagement, Mr. Hu acted as Executive Director of China Property Development
(Holdings) Limited and Asia Director of ING Real Estate. Over the past 10 years,
he has been working with the Beijing International Trade Association and the
Beijing International Trade Research Institute, during which period his
responsibilities included performing financial and economic research and
providing professional advice on Beijing municipal government's cross-provincial
investments and foreign investments, participating in the decision-making
process for granting export rights to Beijing government-owned enterprises,
evaluating investment proposals as well as supervising sino-foreign investments
in Beijing. Mr. Hu graduated with a bachelor degree in economics from the
Beijing Economics College in 1983.
Lianjun
Luo
became
our Chief Financial Officer on March 12, 2004, and one of our directors on
March
27, 2004. Mr. Luo served as the Chief Executive Officer of Kiwa BVI from October
2002 to March 2004. From January 2002 to October 2002, Mr. Luo served as the
Chief Financial Officer of China Star. From August 2000 to December 2001, Mr.
Luo served as manager of the Security Department and as Assistant to the
President at Jilin HengFa Group Ltd., a Chinese drug manufacturing company,
responsible for the company’s preparation for an aborted IPO and for merger and
acquisition activities. From May 1998 to July 2000, Mr. Luo worked as manager
of
the Investment Department and Associate General Manager for Hongli Industry
Co.,
Ltd., a Chinese investment company on merger and acquisition transactions.
Mr.
Luo obtained his law degree from China University of Politics Science and Law
in
1993. Mr. Luo is a certified public accountant and lawyer in China.
Yunlong
Zhang
became
one of our directors on March 27, 2004 and General Manager of our wholly-owned
subsidiary, Kiwa Bio-Tech Products (Shandong) Co., Ltd on May 10, 2007. From
May
2000 to the present, Mr. Zhang has been the General Manager of China Star,
responsible for its daily operations. From 1994 to 2000, Mr. Zhang served as
the
head of the Investment Department at China National Economic and Systems Reform
Research and Services Center, an economic reform think tank for the central
government. Mr. Zhang holds a degree in statistics.
Qi
Wang
became
our Director on July 16, 2007. Mr. Wang has been a director of Kiwa-CAU R&D
Center since July 2006. Mr. Wang served as a Professor and Advisor for Ph.D
students in the Department of Plant Pathology, China Agricultural University
(“CAU”) since January 2005. Prior to that, he served as an assistant professor
and lecturer of CAU since June 1997. He obtained his master degree and Ph.D
in
agricultural science from CAU in July 1994 and July 1997, respectively. Mr.
Wang
received his bachelor’s degree of science from Inner Mongolia Agricultural
University in July 1989. He is a committee member of various scientific
institutes in China, including the National Research and Application Center
for
Increasing-Yield Bacteria, Chinese Society of Plant Pathology, Chinese
Association of Animal Science and Veterinary Medicine.
The
Board of Directors recommends that stockholders vote “FOR” the nominees named in
this
proxy statement. The five individuals receiving the greatest number of votes
shall be
deemed
elected even if they do not receive a majority vote.
Information
Regarding the Board of Directors and its Committees
During
2007, the Board of Directors was composed of five members, including Messrs
Wei
Li, Lianjun Luo, Dachang Ju, Yunlong Zhang and Qi Wang. All board actions
require the approval of a majority of the directors in attendance at a meeting
at which a quorum is present.
During
2007, our Board of Directors held eight meetings. No member of our Board of
Directors attended fewer than 75% of the meetings. We currently do not have
a
policy with respect to board members’ attendance at annual meetings.
We
do not
have a standing audit, nominating or compensation committee. As a small,
development-stage company, we
believe
that all of our directors acting together, as opposed to a subset of them acting
by means of a committee, is the most efficient and effective framework for
us to
perform the functions otherwise associated with audit, nominating and
compensation committees.
Nominating
Committee Functions
Since
we
do not have a nominating committee, all of the members of the Board of Directors
participate in the consideration of director nominees. We do not currently
have
a written nominating committee charter or similar document.
Process
for Identifying and Evaluating Nominees for the Board of
Directors
Our
Board
of Directors may employ a variety of methods for identifying and evaluating
director nominees. If vacancies are anticipated or arise, our Board of Directors
considers various potential candidates which may come to our attention through
current board members, professional search firms, stockholders or other persons.
These candidates may be evaluated by our Board of Directors at any time during
the year.
Our
Board
of Directors considers candidates recommended by stockholders when the
nominations are properly submitted as described in “Consideration of Stockholder
Recommendations” below. Following verification of the stockholder status of
persons proposing candidates, our Board of Directors will make an initial
analysis of the qualifications of any candidate recommended by stockholders
or
others pursuant to the criteria summarized herein to determine whether the
candidate is qualified for service on the board, before deciding to undertake
a
complete evaluation of the candidate. If our Board of Directors determines
that
additional consideration is warranted, it may use a third-party search firm
to
gather additional information about the prospective nominee’s background and
experience. Other than the verification of compliance with procedures and
stockholder status, and the initial analysis performed before undertaking a
complete evaluation, our Board of Directors will treat a potential candidate
nominated by a stockholder like any other potential candidate.
In
evaluating a director candidate, our Board of Directors will review his or
her
qualifications including capability, availability to serve, conflicts of
interest, general understanding of business, understanding of the Company’s
business and technology, educational and professional background, personal
accomplishment and other relevant factors. Our Board of Directors has not
established any specific qualification standards for director nominees, although
from time to time the Board of Directors may identify certain skills or
attributes as being particularly desirable to help meet specific needs that
have
arisen. Our
Board
of Directors may also interview prospective nominees in person or by telephone.
After completing this evaluation, the Board of Directors will determine the
nominees.
Consideration
of Stockholder Recommendations
Our
Board
of Directors considers director candidates recommended by stockholders.
Candidates recommended by stockholders are evaluated on the same basis as are
candidates recommended by our Board of Directors. Any
stockholder wishing to recommend a candidate for nomination by the Board of
Directors should provide the following information in a letter addressed to
the
Board in care of our Secretary: (i) the name and address of the stockholder
recommending the person to be nominated; (ii) a representation that the
stockholder is a holder of record of our stock, including the number of shares
held and the period of holding; (iii) a description of all arrangements or
understandings between the stockholder and the recommended nominee; (iv)
information as to any plans or proposals of the type required to be disclosed
in
Schedule 13D and any proposals that the nominee proposes to bring to the Board
of Directors if elected; (v) any other information regarding the recommended
nominee that would be required to be included in a proxy statement filed
pursuant to Regulation 14A pursuant to the Securities Exchange Act of 1934
and
(vi) the consent of the recommended nominee to serve as a director if elected.
Additional information may be requested to assist our Board of Directors in
determining the eligibility of a proposed candidate to serve as a director.
In
addition, the notice must meet any other requirements contained in our bylaws.
Stockholders may nominate candidates directly by complying with our bylaws
and
applicable law, including the deadlines described under “Stockholder Proposals
for the 2009 Annual Meeting of Stockholders”, below.
Audit
Committee Functions
Since
we
do not have an audit committee, the entire Board of Directors acts as the audit
committee. The Board has determined that at least one person on the Board,
Lianjun Luo, qualifies as a “financial expert” as defined by SEC rules
implementing Section 407 of the Sarbanes-Oxley Act. Mr. Luo does not meet the
definition of an “independent” director set forth in Rule 4200(a)(15) of the
Market Place Rules of the Nasdaq Stock Market, which is the independence
standard that we have chosen to report under. We have not been able to identify
a suitable candidate for our Board of Directors that would qualify as an audit
committee financial expert. We do not currently have a written audit committee
charter or similar document.
Code
of Ethics
We
have
adopted a Code of Business Conduct and Ethics that is applicable to all
employees, consultants and members of the Board of Directors, including the
Chief Executive Officer, Chief Financial Officer and Secretary. This code
embodies our commitment to conduct business in accordance with the highest
ethical standards and applicable laws, rules and regulations. We will provide
any stockholder a copy of the code, without charge, upon written request to
our
Secretary.
Stockholder
Communications with Board of Directors
Any
stockholder or interested party who wishes to communicate with our Board of
Directors or any specific directors may write to Kiwa Bio-Tech Products Group
Corporation, Board of Directors, 310 North. Indian Hill Blvd, Suite 702,
Claremont, California 91711-4611.
The
mailing envelope must contain a clear notation indicating that the enclosed
letter is a “Stockholder-Board Communication” or “Stockholder-Director
Communication.” All such letters must identify the author as a stockholder and
clearly state whether the intended recipients are all members of the board
or
certain specified individual directors. We will receive and make copies of
all
such letters and circulate them to the appropriate director or
directors.
Compensation
of Directors for 2007
We
currently have no policy in effect for providing compensation to our directors
for their services on our Board of Directors. In fiscal 2007, we did not provide
any compensation to our directors for their service on our Board of Directors.
Two of the directors, Messrs Wei Li and Lianjun Luo are also executive officers
of the Company and their respective compensation was provided for their service
as employees of the Company.
PROPOSAL
2 RATIFICATION OF INDEPENDENT AUDITOR
Audit
and Other Fees
Audit
Fees
Mao
&
Company, CPAs, Inc. (“Mao & Co”) audited our financial statements for
year-end 2007 and 2006, and reviewed our quarterly financial statements for
2007. Since we do not have a formal audit committee, our entire Board of
Directors serves as our audit committee. We have not adopted pre-approval
policies and procedures with respect to the Company’s accountants, but our board
of directors approved the engagement of Mao & Co. before engagement. All of
the services described below were approved by our board of directors prior
to
performance. The board of directors has determined that the payments made to
its
independent accountant for these services are compatible with maintaining such
auditor's independence.
The
aggregate audit fees for 2007 were approximately $77,900. The amounts include
fees for professional services rendered by Mao & Co. in connection with the
audit of our consolidated financial statements for the 2007 fiscal year and
reviews of our quarterly reports on the Form 10-QSB for the first, second and
third quarters of fiscal 2007.
The
aggregate audit fees for 2006 were approximately $73,000. The amounts include
fees for professional services rendered by Mao & Co. in connection with the
audit of our consolidated financial statements for the 2006 fiscal year and
reviews of our quarterly reports on the Form 10-QSB for the first, second and
third quarters of fiscal 2006.
Audit-Related
Fees
Audit-related
fees for 2007 for assurance and related services by Mao & Co were $5,600.
The amounts include fees for auditing the financial statements in relation
to
the preparation and filing of the post-effective amendments for our registration
statement on Form SB-2.
Audit-related
fees for 2006 for assurance and related services by Mao & Co. and Grobstein,
Horwath & Company, LLP (“GHC”) were $7,100 and $9,500. The amounts include
fees for auditing the financial statements in relation to the preparation and
filing of our registration statement on Form SB-2.
Tax
Fees
Tax
service fees billed to a tax consultant for 2007 were $4,500. Tax service fees
billed to Mao & Co. for 2006 were $4,500.
All
Other Fees
There
were no additional aggregate fees billed by Mao & Co. for 2007 and 2006 for
other services rendered to the Company.
Ratification
of Selection of Independent Auditor
Effective
March 14, 2006, our board of directors approved the selection and appointment
of
Mao & Co as our certifying accounting firm for the fiscal year ending
December 31, 2005 after GHC resigned on March 13, 2006. Thereafter Mao & Co
has issued the audit report on our consolidated financial statements for the
fiscal year ended December 31, 2007, 2006 and 2005. (Our Annual Report on Form
10-KSB for fiscal 2007, as amended by Form 10-KSB/A filed on August 6, 2008
is
attached.)
We
do not
expect representatives of Mao & Co to be present at the annual
meeting.
Under
the
Sarbanes-Oxley Act of 2002 and the rules of the Securities and Exchange
Commission regarding auditor independence, the engagement of the company’s
independent accountant to provide audit or non-audit services for the company
must either be approved by the audit committee before the engagement or entered
into pursuant to pre-approval policies and procedures established by the audit
committee. Our Board of Directors (functioning as the audit committee) has
not
established any pre-approval policies or procedures and therefore all audit
or
non-audit services performed for the company by the independent accountant
must
be approved in advance of the engagement by the Board of Directors. Under
limited circumstances, certain de minimis non-audit services may be approved
by
the Board of Directors retroactively. All services provided to the company
by
the independent accountants in fiscal 2007 were approved in advance of the
engagement by the Board of Directors and no non-audit services were approved
retroactively by the Board of Directors pursuant to the exception for certain
de
minimis services described above.
The
affirmative vote of a majority of the shares represented at the meeting is
required for the ratification of the selection and appointment by the Board
of
Directors of Mao & Co as the Company’s independent auditor for the fiscal
year ended December 31, 2008.
The
Board of Directors recommends that stockholders vote “FOR” the ratification of
the selection and
appointment
of Mao & Company, CPAs, Inc. as independent auditors of the
Company.
PROPOSAL
3 APPROVAL OF INCREASE IN AUTHORIZED SHARES OF COMMON
STOCK
We
are
currently authorized under our Restated Certificate of Incorporation to issue
200,000,000 shares of common stock and 20,000,000 shares of preferred stock.
Our
Board of Directors proposes to increase the number of authorized shares of
common stock to 300,000,000 shares. Our Board of Directors believes that the
proposed increase to the authorized number of shares of common stock is
necessary for our continued success and growth. The proposed certificate of
amendment (the "Certificate of Amendment") will amend the Company's Restated
Certificate of Incorporation to increase the number of authorized shares of
common stock, from 200,000,000 shares to 300,000,000 shares. The Certificate
of
Amendment will not affect the authorized number of shares of preferred stock,
which will remain at 20,000,000.
The
additional shares of common stock that we are seeking authorization for may
be
used for such corporate purposes as the Board of Directors may determine from
time to time to be necessary or desirable. These purposes may include, without
limitation: raising capital through the sale of common stock; acquiring other
businesses in exchange for shares of common stock; and attracting and retaining
employees by the issuance of additional securities under the Stock Plan and
other employee equity compensation arrangements. One of these purposes that
we
are seeking an increase in our authorized shares is to maintain sufficient
shares to meet the reserve requirements 6% Secured Convertible
Notes.
Pursuant
to a Securities Purchase Agreement entered into on June 29, 2006 with six
institutional investors, we issued and sold 6% Secured Convertible Notes, in
the
aggregate principal amount of U.S. $2,450,000, convertible into shares of our
common stock, and Warrants to purchase 12,250,000 shares of our common stock.
As
of September, 22, 2008, six investors converted $695,900 principal and the
outstanding balance was $1,754,100.
The
outstanding principal amount of the Convertible Notes is convertible into shares
of our common stock pursuant to a conversion price that is based on an average
of the trading price of our common stock on the OTC Bulletin Board discounted
by
40%. The conversion price would also be adjusted for certain subsequent
issuances of any of our equity securities at prices below the conversion price
then in effect. The Convertible Notes contain a volume limitation that prohibits
the holder from converting further Convertible Notes if doing so would cause
the
holder and its affiliates to hold more than 4.99% of our outstanding common
stock. In addition, the holder agrees that it will not convert more than the
holder’s pro-rata share of by principal amount of $120,000 of Convertible Notes
per calendar month. The exercise price of the Warrants is $0.45 per share,
subject to anti-dilution adjustments pursuant to a broad-based weighted average
formula for subsequent issues of our equity securities below the trading price
of the shares.
The
Purchase Agreement requires us to maintain a reserve of authorized common stock
equal to 110% of the number of shares issuable upon full conversion of the
Convertible Notes and exercise of the Warrants. The Purchase Agreement imposes
financial penalties if the authorized number of shares of common stock is
insufficient to satisfy the reserve requirements. The Convertible Notes and
the
Warrants also impose financial penalties on us if we fail to timely deliver
common stock upon conversion of the Convertible Notes and exercise of the
Warrants, respectively.
Because
the Conversion Price of the Notes at any point in time is based on the trading
price of our common stock, it is not possible to calculate the exact number
of
shares issuable upon conversion of the Convertible Notes in the future. For
illustration purposes, the conversion price of the Convertible Notes calculated
for September 3, 2008 was $0.18, The outstanding balance of principal of 6%
Notes on the same date was $1,754,100.48. At that conversion price the
Convertible Notes outstanding as of September 3, 2008 could be converted into
97,450,027 shares of common stock. As of September 3, 2008, there were
94,130,954 shares of common stock issued and outstanding, and in addition to
the
Convertible Notes and Warrants, there are outstanding options, rights or
warrants, convertible loans and stock subscription and other stock commitments
issuable for approximately 35,600,000 shares of common stock. (The conversion
or
exercise terms of some of these securities are based on the Company's stock
price, and therefore the exact number of shares issuable pursuant to those
securities varies from day to day.)
If
the
Certificate of Amendment is approved, the Board of Directors will have the
authority to issue additional shares of common stock up to the 300,000,000
authorized amount without further stockholder approval, except as may be
required for a particular transaction by applicable law, regulatory agencies
or
any other rules which we may be subject to.
Our
Board
of Directors believes that the authorized number of shares of common stock
should be increased to provide the Board of Directors with the ability to issue
additional shares of common stock to satisfy our contractual obligations and
for
the other potential corporate purposes described above, without having to incur
the delay and expense incident to holding a special meeting of the stockholders
to approve an increase in the authorized shares of common stock at that time.
The
authorization of the additional shares of common stock by this proposal would
not have any immediate dilutive effect on the proportionate voting power or
other rights of existing stockholders, but, to the extent that the additional
authorized shares are issued in the future, it will decrease existing
stockholders' percentage equity ownership and, depending on the price at which
they are issued, could be dilutive to existing stockholders and have a negative
effect on the trading price of our common stock. Because the common stock
issuable in conjunction with the Convertible Notes is based on a discount to
the
trading price, all common stock issued upon conversion of the Convertible Notes
will be dilutive to existing stockholders on a market capitalization basis.
Under the Restated Certificate of Incorporation, stockholders do not have
preemptive rights with respect to the issuance of shares of common stock, which
means that current stockholders do not have a prior right to purchase any new
issue of common stock in order to maintain their proportionate ownership of
common stock.
OTHER
CONSIDERATIONS
The
increase in the number of authorized shares of common stock could have
unintended effects. For example, if our Board of Directors issues additional
shares in the future, such issuance could dilute the stock ownership and voting
power of, or increase the cost to, a person seeking to obtain control of the
Company, thereby deterring or rendering more difficult a merger, tender offer,
proxy contest or other extraordinary transaction. To the extent that it impedes
any such attempts, the Certificate of Amendment may serve to perpetuate our
management. The Certificate of Amendment is not being proposed in response
to
any known effort or threat to acquire control of the Company and is not part
of
a plan by management to adopt a series of amendments to the Restated Certificate
of Incorporation and our bylaws that would thwart such efforts.
THE
BOARD OF DIRECTORS HAS APPROVED AND RECOMMENDS THAT YOU VOTE "FOR" THE APPROVAL
OF THE CERTIFICATE OF AMENDMENT TO INCREASE THE NUMBER OF AUTHORIZED SHARES
OF
COMMON STOCK OF THE COMPANY. YOUR PROXY WILL BE SO VOTED UNLESS YOU SPECIFY
OTHERWISE.
SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The
following table sets forth as of December 31, 2007 certain information with
respect to the beneficial ownership of our common stock by (i) each of our
directors and executive officers, (ii) each person who is known by us to
beneficially own more than 5% of our outstanding common stock, and (iii) all
of
our directors and executive officers as a group. Percentage ownership is
calculated based on 81,519,676 shares of our common stock outstanding as of
December 31, 2007. None of the shares listed below are issuable pursuant to
stock options or warrants of the Company.
|
|
|
|
|
|
|
Title
of Class
|
Name
and Address of Beneficial Owner
|
Amount
and Nature of Beneficial Owner
|
Percentage
of Class
|
|
Common
Stock
|
Weil
Li(1)
|
13,064,794
|
|
16.03%
|
|
Common
Stock
|
Dachang
Ju(2)
|
10,062,088
|
|
12.34%
|
|
Common
Stock
|
Lianjun
Luo
|
1,305,562
|
|
1.60%
|
|
Common
Stock
|
Qi
Wang
|
-
|
|
-
|
|
Common
Stock
|
Yunlong
Zhang
|
308,916
|
|
*
|
|
Common
Stock
|
All
Star Technology Inc.
|
12,356,672
|
|
15.16%
|
|
Common
Stock
|
InvestLink
(China) Limited
|
10,062,088
|
|
12.34%
|
|
Common
Stock
|
All
officers and directors as a group (5 persons)
|
24,741,360
|
|
30.35%
|
|
*
|
Less
than 1%.
|
|
|
|
|
(1)
|
Consists
of shares held by All Star Technology Inc., a British Virgin Islands
international business company. Wei Li exercises voting and investment
control over the shares held by All Star Technology Inc. Wei Li is
a
principal stockholder of All Star Technology Inc. and may be deemed
to
beneficially own such shares, but disclaims beneficial ownership
in such
shares held by All Star Technology Inc. except to the extent of his
pecuniary interest therein.
|
|
|
|
|
(2)
|
Consists
of 7,812,088 shares of common stock held directly by InvestLink (China)
Limited (“Investlink”) and 2,250,000 shares of common stock held by
InvestLink as custodian for Guisheng Chen. InvestLink has the sole
power
to vote or direct the vote and dispose or direct the disposition
of
10,062,088 shares but disclaims beneficial ownership of such shares
except
to the extent of its pecuniary interest therein. Dachang Ju exercises
voting and investment control over the shares held by InvestLink.
Dachang
Ju is a principal stockholder of InvestLink and may be deemed to
beneficially own such shares, but disclaims beneficial ownership
in such
shares held by InvestLink except to the extent of his pecuniary interest
therein.
|
Under
the
terms of the 6% Notes and 6% Note Warrants, the notes and warrants are
exercisable by any holder only to the extent that the number of shares of common
stock issuable pursuant to such securities, together with the number of shares
of common stock owned by such holder and its affiliates (but not including
shares of common stock underlying unconverted shares of callable secured
convertible notes or unexercised portions of the warrants) would not exceed
4.99% of the then outstanding common stock as determined in accordance with
Section 13(d) of the Exchange Act. The table above does not include beneficial
ownership information of the following holders of the 6% Notes and 6% Note
Warrants of the Company: AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified
Partners, LLC, New Millennium Capital Partners II, LLC, Double U Master Fund
LP,
and Nite Capital LP, even though one or more of such holders might hold more
than 5% of our outstanding common stock if all of their 6% Notes and 6% Note
Warrants were converted.
CERTAIN
RELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR
INDEPENDENCE
Certain
Relationships
The
relationships between our directors and the Company are as follows:
Wei
Li is
a principal stockholder of All Star Technology Inc, which holds 12,356,672
shares of our common stock. Mr. Li may be deemed to beneficially own such shares
and exercises voting and investment control over such shares. Mr. Li is also
the
Chairman of the Board and Chief Executive Officer of the Company.
Dachang
Ju is a principal stockholder of InvestLink (China) Limited, which holds
directly 7,812,088 shares of our common stock and 2,250,000 shares of common
stock as custodian, Mr. Ju may be deemed to beneficially own such shares. Mr.
Ju
exercises voting and investment control over such shares.
Lianjun
Luo is Chief Financial Officer of the Company.
Qi
Wang
is the Director of Kiwa-CAU R&D centre and also Vice President of the
Company.
Yunlong
Zhang is General Manager of Kiwa Shandong.
Related
Transactions
Mr.
Wei Li
Advances
and Loans
Our
Chairman of the Board and Chief Executive Officer of the Company, Wei Li, has
historically helped finance the Company through short term loans and cash
advances. As of December 31, 2006, the remaining balance due to Mr. Li was
$32,398. During the twelve months ended December 31, 2007, Mr. Li advanced
$692,778 to the Company and was repaid $334,268 (including $225,300 repaid
by
issuance of 3,000,000 shares of common stock in October, 2007). As of December
31, 2007, the balance due to Mr. Li was $390,908. Mr. Li has agreed that the
Company may repay the balance when its cash flow circumstance allows.
In
connection with the above-mentioned advances, the Company has also granted
detachable warrants to Mr. Li to purchase an aggregate of 2,166,991 shares
of
common stock as partial consideration for several advances to the Company during
the twelve months ended December 31, 2007.
Motor
Vehicle Lease
In
December 2004, we entered into an agreement with Mr. Li, pursuant to which
Mr.
Li leases to the Company a motor vehicle. The monthly rental payment is $2,054.
We have extended this lease agreement with Mr. Li to the end of fiscal
2008.
Guarantees
for the Company
Mr.
Li
has pledged without any compensation from the Company all of his common stock
of
the Company as collateral security for the Company’s obligations under the 6%
Notes.
China
Star Investment Management Co., Ltd.
China
Star is a company which is 28% owned by Wei Li.
As
of
December 31, 2007 and 2006, we had loans balances due to China Star of $205,631
and $457,464, respectively. In the twelve months ended December 31, 2007, China
Star advanced an additional $27,394 to the Company and the Company has repaid
$279,228 to China Star. China Star agreed that the Company could repay the
balance when its cash flow circumstance allows.
Kiwa-CAU
R&D Center
Pursuant
to our agreement with China Agricultual Universtiy (“CAU”), we agreed to invest
RMB1 million (approximately $137,000) each year to fund research at Kiwa-CAU
R&D Center. Qi Wang, one of our directors since July 2007, has been a
director of Kiwa-CAU R&D Center since July 2006.
During
fiscal 2007 and 2006, we paid Kiwa-CAU R&D Center nil and $51,225,
respectively. The balance due to Kiwa-CAU R&D Center at the end of fiscal
2007 and 2006 was $164,280 and $22,418, respectively.
Challenge
Feed
Challenge
Feed owns 20% of Kiwa Tianjin’s equity, and Mr. Wenbin Li, one of Challenge
Feed’s shareholders, is also in charge of daily operation of Kiwa Tianjin. As of
December 31, 2007, the outstanding balance due to Challenge Feed was $13,690,
which was unpaid rental from operating lease. There was no trade transaction
between the Company and Challenge Feed in 2007.
Lease
Agreement
The
Company has entered into an agreement with Challenge Feed to lease the following
facilities for three years commencing on August 1, 2006: (1) an office building
with floor area of approximately 800 square meters; (2) storehouses with floor
area of approximately 2,500 square meters; (3) a concentrated feed production
line for fowl and livestock; and (4) two workshops with floor area of
approximately 1,200 square meters. The total monthly rental is RMB 50,000
(approximately $6,845). During fiscal 2007, we paid $68,450(ten months of rent)
to Challenge Feed. The outstanding balance of rental payments due to Challenge
Feed as of September 18was $13,690.
Director
Independence
Under
the
independence standard set forth in Rule 4200(a)(15) of the Market Place Rules
of
the Nasdaq Stock Market, which is the independence standard that we have chosen
to report under, one of the members of the Board of Directors, Dachang Ju,
is
independent. Mr. Ju does not satisfy audit committee independence under Rule
10A-3.
We
do not
have a separately designated audit, nominating or compensation committee or
committee performing similar functions.
EXECUTIVE
COMPENSATION
We
currently have no Compensation Committee of the Board of Directors. The Board
of
Directors is currently performing the duties and responsibilities of the
Compensation Committee. In addition, we have no formal compensation policy.
We
decide on our executives’ compensation based on average compensation levels of
similar companies in the U.S. or China, depending on consideration of many
factors such as where the executive works. Our Chief Executive Officer's
compensation is approved by the Board of Directors. Other named executive
officers' compensation are proposed by our Chief Executive Officer and approved
by the Board of Directors.
Our
Stock
Incentive Plan is administered by the Board of Directors.
Any
amendment to our Stock Incentive Plan requires majority approval of the
stockholders of the Company. We presently do not have a non-equity incentive
plan in effect.
The
Company had no officers or directors whose total annual salary and bonus during
either 2007 or 2006, exceeded $100,000.
Executive
Officers Information
During
2007, our executive officers included Messrs. Wei Li, Lianjun Luo, Qi Wang,
Dianyuan Song, Yvonne Wang, Xin Ma and Jun Guo.
Wenbin
Li
became our Vice President-Marketing on January 21, 2007 and his resignation
was
accepted by our Board of Directors on October 28, 2007. His successor, Dianyuan
Song has been in the same position since the same date.
Information
regarding the backgrounds of Messrs. Wei Li, Chief Executive Officer, Lianjun
Luo, Chief Financial Officer and Qi Wang is set forth above under “Proposal 1
Election of Directors”.
Yvonne
Wang
was
appointed to be our Secretary in September 2005. Prior to that, she served
as an
assistant to the CEO and manager of the Company’s U.S. office since April 2003.
She obtained her B.S. degree in Business Administration in July 2001, from
University of Phoenix.
Xin
Ma
became
our Associate Chief Financial Officer since January 2006. Prior to that Mr.
Ma
served as financial controller of LangChao Group. He obtained his MSc. Degrees
of Management and of Finance in 2005 and 2006 respectively from the University
of Leicester.
Jun
Guo
became
our CEO Assistant from June 2007. Prior to that Mr. Guo served as General
Manager of Shijiazhuang Yongfeng Feed Co., Ltd. and Shenyang Yiming Feed Co,
Ltd. for two years respectively. Mr. Guo holds a bachelor’s degree from Sichuan
Institute of Animal Husbandry and Veterinary Medicine.
Equity
Compensation Information
2004
Stock Incentive Plan
Under
our
2004 Stock Incentive Plan (the “Plan”), we may issue to qualifying participants
options and stock purchase rights with respect to up to 3,047,907 shares of
our
common stock, of which not more than 500,000 shares may be granted to any
participant in any fiscal year. Options issued under the Plan will expire ten
years from the date of grant. The Plan as approved by our stockholders on June
3, 2004 and an amendment to the Plan was approved by our stockholders on
September 12, 2006.
The
Plan
is a key aspect of our compensation program, designed to attract, retain, and
motivate the highly qualified individuals required for our long-term success.
Stock
Option Grants
On
December 12, 2006, our Board of Directors granted 2,000,000 options under the
Plan, of which 654,100 shares were granted to the current executive officers.
The exercise price was $0.175, equal to the closing price of our common stock
on
December 12, 2006. Pursuant to the approval of Board of Directors, after each
of
the first and second anniversaries of the grant date, 33% percent of the options
will become exercisable. After the third anniversary of the grant date, 34%
of
the options will become exercisable.
During
the second quarter of 2007, a total number of 362,100 unexercised stock options
was returned to the Plan pool following the separation of certain company
employees. These stock options are available for future grant.
As
of
December 12, 2007, 540,507 outstanding stock options were vested, among which
271,821 stock options in total are held by our current executive
officers.
No
options were granted under the Plan during 2007.
Outstanding
Stock Option At 2007 Fiscal Year-End
The
following table sets forth the status of all outstanding options as of December
31, 2007.
|
Option
Grant Table
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Number
of Securities Underlying Unexercised Options Exercisable
|
|
Number
of Securities Underlying Unexercised Options Unexercisable
|
|
Number
of Securities Underlying Unexercised Unearned
Options
|
|
Option
Exercise
Price
|
|
Option
Grant
Date
|
|
Option
Expiration
Date
|
|
Wei
Li
|
|
60,324
|
|
122,476
|
|
182,800
|
|
0.175
|
|
2006-12-12
|
|
2016-12-4
|
|
Lianjun
Luo
|
|
43,626
|
|
88,574
|
|
132,200
|
|
0.175
|
|
2006-12-12
|
|
2016-12-4
|
|
Qi
Wang
|
|
34,914
|
|
70,886
|
|
105,800
|
|
0.175
|
|
2006-12-12
|
|
2016-12-4
|
|
Yvonne
Wang
|
|
41,283
|
|
83,817
|
|
125,100
|
|
0.175
|
|
2006-12-12
|
|
2016-12-4
|
|
Xin
Ma
|
|
35,706
|
|
72,494
|
|
108,200
|
|
0.175
|
|
2006-12-12
|
|
2016-12-4
|
Aggregate
Option Exercises and Fiscal-Year-End Value
No
stock
options were exercised by any executive officers during 2006 and 2007. We did
not adjust or amend the exercise price of any stock options previously awarded
to any named executive officers during 2006 and 2007.
The
fiscal-year-end value of unexercised options hold by executives was nil based
on
the closing price on December 31, 2007.
|
Aggregate
Option Exercises in 2007 and FY-End Option
Values
|
| |
|
|
|
|
|
|
| |
|
Shares
Acquired
on
Exercise
|
|
Securities
Underlying Unexercised Options
at
December 31, 2007
(Exercisable)
|
|
Securities
Underlying Unexercised Options
at
December 31, 2007
(Unexercisable)
|
|
Name
|
|
Number
(#)
|
|
Value
Realized ($)
|
|
Number
(#)
|
|
Value(1)
($)
|
|
Number
(#)
|
|
Value
(1)
($)
|
|
Wei
Li
|
|
None
|
|
N/A
|
|
60,324
|
|
Nil
|
|
122,476
|
|
Nil
|
|
Lianjun
Luo
|
|
None
|
|
N/A
|
|
43,626
|
|
Nil
|
|
88,574
|
|
Nil
|
|
Qi
Wang
|
|
None
|
|
N/A
|
|
40,095
|
|
Nil
|
|
81,045
|
|
Nil
|
|
Yvonne
Wang
|
|
None
|
|
N/A
|
|
41,283
|
|
Nil
|
|
83,817
|
|
Nil
|
|
Xin
Ma
|
|
None
|
|
N/A
|
|
35,706
|
|
Nil
|
|
72,494
|
|
Nil
|
| (1) |
The
2007 year-end value of unexercised options equals the difference
between
the option exercise price and the closing price of the Company stock
at
fiscal year end, multiplied by the number of shares underlying the
options. The closing price of the Company stock on December 31, 2007,
as
reported in NASD OTC Bulletin Board was $0.12, lower than the exercise
price of $0.175, thus the stock options are
out-of-money.
|
Summary
Compensation Table
|
SUMMARY
COMPENSATION TABLE
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Deferred
|
|
All
Other
|
|
|
|
|
Name
and principal
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive
Plan
|
|
Compensation
|
|
Compensation
|
|
|
|
|
position
|
|
Year
|
|
Salary
($)
|
|
Bonus
($)
|
|
Awards
($)
|
|
Awards
($)
|
|
Compensation
($)
|
|
Earnings
($)
|
|
($)
|
|
Total
($)
|
|
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(e)
|
|
(f)
|
|
(g)
|
|
(h)
|
|
(i)
|
|
(j)
|
|
|
Wei
Li, CEO
|
|
|
2007
|
|
|
75,000
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
75,000
|
|
|
Wei
Li, CEO
|
|
|
2006
|
|
|
75,000
|
|
|
21,000
|
|
|
Nil
|
|
|
29,262
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
125,262
|
|
|
Lianjun
Luo, CFO
|
|
|
2007
|
|
|
48,000
|
|
|
12,000
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
60,000
|
|
|
Lianjun
Luo, CFO
|
|
|
2006
|
|
|
48,000
|
|
|
12,000
|
|
|
Nil
|
|
|
21,162
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
81,162
|
|
|
(1)
|
The
bonus amounts for fiscal 2006 were accrued pursuant to the terms of Wei
Li’s employment agreements with the Company. Wei Li’s bonus payment is
subject to approval of the Board of Directors of the Company. For
material
terms of the employment agreements, see additional information below
under
“Employment Contracts and Termination of Employment and Change of
Control
Arrangements.”
|
|
(2)
|
Options
granted on December 12, 2006. For material terms of the grant, see
additional information above under “2004 Stock Incentive Plan”. The fair
value of these options at the date of grant was estimated using a
Black-Scholes option pricing model.
|
Employment
Contracts and Termination of Employment and Change of Control
Arrangements
On
July
31, 2006, we entered into an employment agreement with our Chief Executive
Officer, Wei Li, for a three-year term, retroactive to January 1, 2006. Pursuant
to this agreement, Mr. Li will receive a salary at the rate of RMB768,000
(approximately $105,000) per annum, of which RMB600,000 will be paid in equal
monthly installments of RMB50,000 ($6,845) during the period of employment,
prorated for any partial employment period, and RMB168,000 ($23,000) will be
paid as an annual performance bonus in three months after each employment year.
Mr. Li will receive such annual increases in salary as may be determined by
our
Board of Directors at our annual meeting. Mr. Li is also entitled to an annual
grant of stock options under our employee stock option plan as determined by
the
Board of Directors. Mr. Li is entitled to three-month’s severance if his
employment is terminated without cause.
On
July
31, 2006, we entered into an employment agreement with our Chief Financial
Officer, Lianjun Luo, for a three-year term, retroactive to January 1, 2006.
Pursuant to this 2006 agreement, we will pay Mr. Luo an annual salary at the
rate per annum of RMB480,000 (approximately $65,700), of which RMB384,000 will
be paid in equal monthly installments of RMB32,000 during the period of
employment, prorated for any partial employment period, and RMB96,000 will
be
paid as an annual performance bonus in three months after each employment year
for the successful completion of all goals and objectives of that year and
is
entitled to an annual grant of stock options under our employee stock option
plan as determined by the Board of Directors. Mr. Luo is entitled to three
month’s severance if his employment is terminated without cause.
Mr.
Wenbin Li’s resignation as Vice President-Marketing was accepted by our Board of
Directors on October 28, 2007.
In
addition, there are no compensatory plans or arrangements with respect to a
named executive officer that would result in payments or installments in excess
of $100,000 upon the resignation, retirement or other termination of such
executive officer's employment with us or from a change-in-control.
SECTION
16(A) BENEFICIAL OWNERSHIP COMPLIANCE
Section
16(a) of the Securities Exchange Act of 1934 requires our officers, directors
and certain persons holding more than 10 percent of a registered class of
our common stock to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership of our common stock.
Officers, directors and certain other shareholders are required by the
Securities and Exchange Commission to furnish the Company with copies of all
Section 16(a) forms they file. To the best of the Company’s knowledge, based
solely upon a review of the copies of such reports, during 2007, all of the
required filings were made on a timely basis.
STOCKHOLDER
PROPOSALS FOR THE 2009 ANNUAL MEETING OF STOCKHOLDERS
Stockholders
who, in accordance with SEC Rule 14a-8, wish to present proposals for inclusion
in the proxy materials to be distributed in connection with next year’s annual
meeting must submit their proposals so that they are received at the Company’s
principal executive offices no later than the close of business on December
31,
2008.
In
accordance with our bylaws, in order to be properly brought before the 2009
Annual Meeting of Stockholders, a stockholder’s notice of the matter the
stockholder wishes to present, or the person or persons the stockholder wishes
to nominate as a director, must be delivered to or mailed and received by the
Company’s Secretary at its principal executive offices not less than 60 days nor
more than 180 days prior to the 2009 Annual Meeting of Stockholders. However,
if
less than 70 days’ notice or prior public disclosure of the date of the meeting
is given or made to the stockholders, notice of the matter the stockholder
wishes to present, or the person or persons the stockholder wishes to nominate
as a director, must be so received not later than the close of business on
the
tenth day following the day on which the notice of the meeting date was mailed
or public disclosure was made. To be in proper form, a stockholder’s notice must
include the specified information concerning the proposal or nominee as
described in our bylaws.
Please
send notices of intention to present proposals at the 2009 Annual Meeting of
Stockholders to the Company’s Secretary, 310 North; Indian Hill Blvd, Suite 702,
Claremont, California 91711-4611.The Company reserves the right to reject,
rule
out of order, or take other appropriate action with respect to any proposal
that
does not comply with these and other applicable requirements.
OTHER
BUSINESS
The
Board
of Directors does not currently intend to bring any other business before the
meeting, and so far as is known to the Board, no matters are to be brought
before the meeting except as specified in the notice of the meeting. However,
as
to any other business which may properly come before the meeting, the proxy
holders will vote any shares represented by proxies in their
discretion.
| |
KIWA
BIO-TECH PRODUCTS GROUP CORPORATION
By
Order of the Board of Directors
Yvonne
Wang
Secretary
|
Claremont,
California
[
●
]