SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
(Amendment
No. 1)
Filed
by the Registrant
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Filed
by a Party other than the Registrant
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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 under Rule 14a-12
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KIWA
BIO-TECH PRODUCTS GROUP CORPORATION
(Name of
the 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)(4) and
0-11.
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1.
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Title
of each class of securities to which transaction
applies:
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2.
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Aggregate
number of securities to which transaction
applies:
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3.
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was
determined):
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4.
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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.
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Amount
Previously Paid:
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2.
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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
[ ● ],
2009
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 [ ● ] [ ● ],
2009, 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.
Very
truly yours,
Wei
Li
Chief
Executive Officer and
Chairman
of the Board
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON [ ● ] [ ● ], 2009
KIWA
BIO-TECH PRODUCTS GROUP CORPORATION
310
North, Indian Hill Blvd, Suite 702
Claremont,
California 91711-4611
[ ● ],
2009
Dear
Stockholders:
The
Annual Meeting of the Stockholders of Kiwa Bio-Tech Products Group Corporation,
a Delaware corporation, will be held on [ ● ] [ ● ], 2009, 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:
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 2010 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 AGCA, Inc. (“AGCA”) as our independent
auditors for the fiscal year ending December 31,
2009
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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 400,000,000 to 800,000,000
shares; and
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4.
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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 August 24, 2009 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-K for the fiscal
year ended December 31, 2008.
By Order
of the Board of Directors
Yvonne
Wang
Secretary
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
[ ● ] [ ● ], 2009
KIWA
BIO-TECH PRODUCTS GROUP CORPORATION
310
North, Indian Hill Blvd, Suite 702
Claremont,
California 91711-4611
Table of
Contents
GENERAL
INFORMATION
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PROPOSAL
1 ELECTION OF DIRECTORS
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PROPOSAL
2 RATIFICATION OF INDEPENDENT AUDITORS
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9
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PROPOSAL
3 APPROVAL OF INCREASE IN AUTHORIZED SHARES OF COMMON
STOCKS
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SECURITY
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
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CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
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EXECUTIVE
COMPENSATION
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SECTION
16(A) BENEFICIAL OWNERSHIP COMPLIANCE
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STOCKHOLDER
PROPOSALS FOR THE 2010 ANNUAL MEETING OF STOCKHOLDERS
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OTHER
BUSINESS
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PROXY
STATEMENT
FOR
THE
ANNUAL
MEETING OF STOCKHOLDERS
[
● ] [ ● ], 2009
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 2009 Annual Meeting of Stockholders, to be held at 10:00 a.m.
local time on [ ● ] [ ● ], 2009 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 [ ● ] [ ● ], 2009.
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-K for the fiscal year ended December 31, 2008 is
enclosed with this proxy statement.
Voting
Securities
Only
stockholders of record as of the close of business on [ ● ] [ ● ], 2009 will be
entitled to vote at the meeting and any adjournment thereof. As of [
● ] [ ● ], 2009, 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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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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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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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. All 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:
Name
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Age
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Title
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Wei
Li
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48
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Chief
Executive Officer and Chairman of the Board
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Xucheng
Hu
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47
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Director
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Lianjun
Luo
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40
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Director
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Yunlong
Zhang
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46
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Director
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Qi
Wang
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43
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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
became one of our directors in 2008. Mr. 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 director on March 27, 2004. From January 2009
to present, Mr. Luo is a Partner of Beijing Pucheng Law Office. Mr.
Luo severed as Chief Financial Officer of the Company since March 12, 2004 to
December 31, 2008. Mr. Luo served as the Chief Financial 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. From
January 2009 to present, Mr. Zhang is Vice President of the
Company. From May 10, 2007 to December 2008, Mr. Zhang was General
Manager of our wholly-owned subsidiary, Kiwa Bio-Tech Products (Shandong) Co.,
Ltd. From May 2000 to the 2008, Mr. Zhang had been the General
Manager of China Star, responsible for its daily operations. 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
2008, the Board of Directors was composed of five members, including Messrs Wei
Li, Lianjun Luo, Xucheng Hu, 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
2008, 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 2010 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 404 of the Sarbanes-Oxley Act. 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.
During
fiscal year 2008, the entire Board of Directors, acting as the audit committee,
had reviewed and discussed the audited financial statements with
management;
The
entire Board of Directors, acting as the audit committee, had also discussed
with the independent auditors the matters required to be discussed by the
statement on Auditing Standards No. 61, as amended (AICPA, Professional
Standards, Vol. 1, AU section 380),1 as adopted by the Public Company Accounting
Oversight Board in Rule 3200T;
The
entire Board of Directors, acting as the audit committee, had also received the
written disclosures and the letter from the independent accountant required by
applicable requirements of the Public Company Accounting Oversight Board
regarding the independent accountant's communications with the audit committee
concerning independence, and has discussed with the independent accountant the
independent accountant's independence; and
Based on
the review and discussions the entire Board of Directors, acting as the audit
committee, recommended to the board of directors that the audited financial
statements be included in the company's annual report on Form 10-K for the
twelve months ended December 31, 2008.
Our Board
of Directors of 2008 was made up of Mr. Wei Li, Mr. Lianjun Luo, Mr. Xucheng Hu,
Mr. Yunlong Zhang and Prof. Qi Wang.
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 2008
We
currently have no policy in effect for providing compensation to our directors
for their services on our Board of Directors. In fiscal 2008, we did
not provide any compensation to our directors for their service on our Board of
Directors. Mr. Wei Li is also an executive officer of the Company and
his compensation was provided for their service as employees of the
Company.
PROPOSAL
2 RATIFICATION OF INDEPENDENT AUDITOR
Audit
and Other Fees
Audit
Fees
AGCA,
Inc. (“AGCA”) has reviewed our quarterly report on Form 10-Q for the three
months ended March 31, 2009. Mao & Company, CPAs, Inc. (“Mao
& Co”) audited our financial statements for year-end 2008 and 2007, and
reviewed our quarterly financial statements for 2008.
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 AGCA 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 2008 were approximately $74,612. The amounts
include fees for professional services rendered by Mao & Company, CPAs, Inc.
in connection with the audit of our consolidated financial statements for the
2008 fiscal year and reviews of our quarterly reports on the Form 10-Q for the
first, second and third quarters of 2008 fiscal year.
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.
Audit-Related
Fees
Audit-related
fees for 2008 were nil.
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.
Tax
Fees
Tax
service fees billed to a tax consultant for 2008were $1,000.
Tax
service fees billed to a tax consultant for 2007 were $4,500.
All
Other Fees
There
were no additional aggregate fees billed by Mao & Co. for 2008 and 2007 for
other services rendered to the Company.
Ratification
of Selection of Independent Auditor
Effective
June 2, 2009, our board of directors approved the selection and appointment of
AGCA as our certifying accounting firm for the fiscal year ending December 31,
2009 after Mao & Company resigned on June 1, 2009. Thereafter
AGCA has review our quarterly report on Form 10-Q for the three months ended
March 31, 2009.
We do not
expect representatives of AGCA 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 2008 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 AGCA as the Company’s independent auditor for the fiscal year ended
December 31, 2009.
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
400,000,000 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 800,000,000 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 400,000,000
shares to 800,000,000 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 of 6% Secured Convertible Notes. The Company intends to
create a reserve for the potential issuance of shares for the 6% Secured
Convertible Notes. For this purpose, the Company will reserve
390,000,000 shares of common stock.
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 June 30, 2009, six investors converted $931,829
principal and the outstanding balance was $1,518,171.
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. 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. On September 25 and
October 7, 2008, we entered into an agreement with the Purchasers to redeem all
of the 6% Notes and 2% Notes. Under the redemption agreement, the
Purchasers agreed to waive their participation right with respect to any new
financing that closes before October 31, 2008, and suspend conversions of
principal and interest under the 6% Notes and 2% Notes from September 25 to
October 31, 2008. The Company agreed to redeem the notes for a
specified price if a new financing was completed before October 31,
2008. Under the redemption agreement, if the Company failed to redeem
the notes by October 31, 2008, the 6% Notes and 2% Notes would be automatically
amended to remove limitations on the Purchasers’ right to convert under the 6%
Notes and 2% Notes no more than (1) $120,000 per calendar month; and (2) the
average daily dollar volume calculated during the ten (10) business days prior
to a conversion, per conversion. On October 27, 2008, we had informed
the Purchasers that the Company would not be able to redeem the 6% Notes and the
2% Notes due to failure to close an anticipated new
financing. Therefore, the amendment to 6% Notes and 2% Notes took
effective and the Purchasers resumed conversion.
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 June 30, 2009 was $0.003. The
outstanding balance of principal of 6% Notes on the same date was
$1,518,171. At that conversion price the Convertible Notes
outstanding as of June 30, 2009 could be converted into 5,060,569,783 shares of
common stock. As of June 30, 2009, there were 400,000,000 shares of
common stock issued and outstanding, and in addition to the 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 800,000,000
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. Even if the shareholders’ meeting approves to increase the
number of authorized shares from 400,000,000 to 800,000,000, it still may not be
sufficient to allow holders of Convertible Notes to convert the outstanding
balance of principal into shares of our common stocks if the share price of our
common stocks remain low.
Pursuant
to 2004 Stock Incentive Plan, 3,047,907 shares of common stock shall be reserved
for the issuance of options and other stock awards after the amendment approved
by the 2006 annual shareholder meeting.
Moreover,
6,952,093 shares of common stocks will be reserved for other general corporate
purposes, for instance, as compensation to consultants. For example,
pursuant to the engagement letter between the Company and Crone Rozynko, LLP,
dated December 18, 2008, the Company shall issue 37,500 shares of common stocks
to Crone Rozynko as partial compensation for legal services.
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, 2008 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 400,000,000 shares of our common stock outstanding as of
May 31, 2009. 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 Ownership
|
|
Amount and Nature
of Beneficial
Owner
|
|
Percentage
of class
|
Common
Stock
|
|
Wei
Li(1)
|
|
13,064,794
|
|
3.3%
|
Common
Stock
|
|
Lianjun
Luo
|
|
1,305,562
|
|
*
|
Common
Stock
|
|
Yunlong
Zhang
|
|
308,916
|
|
*
|
Common
Stock
|
|
Qi
Wang
|
|
-
|
|
-
|
Common
Stock
|
|
All
Star Technology Inc.
|
|
12,356,672
|
|
3.1%
|
Common
Stock
|
|
All
officers and directors as a group (5 persons)
|
|
24,741,360
|
|
6.2%
|
* 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.
|
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.
Mr.
Lianjun Luo was the Chief Financial Officer of the Company until December 31,
2008.
Qi Wang
is the Director of Kiwa-CAU R&D centre and also Vice President of the
Company.
Yunlong
Zhang is Vice President of the Company.
Related
Transactions
(i)
Mr. Li
Mr. Li is
the Chairman of the Board, Chief Executive Officer and Chief Financial Officer
of the Company.
Advances and
Loans
As of
December 31, 2007, the remaining balance due to Mr. Li was
$377,218. During the twelve months ended December 31, 2008, Mr. Li
advanced $669,846 to the Company and was repaid $209,717. As of
December 31, 2008, the balance due to Mr. Li was $837,347. Mr. Li has
agreed that the Company may repay the balance when its cash flow circumstance
allows.
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 $2,200. We have extended this lease agreement with Mr. Li to the
end of fiscal 2009.
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.
(2)
Kangtai
Non-trade
Kangtai
International Logistics (Beijing) Co., Ltd., formerly named China Star
Investment Management Co., Ltd., is a private company, 28% owned by Mr. Li. Mr.
Li is the Chairman of Kantai.
On
December 31, 2007, the amount due to Kangtai was $205,631. During the
twelve months ended December 31, 2008, Kangtai advanced $72,728 and was repaid
$335,636. The balance due from Kangtai on December 31, 2008 was
$57,277.
Fertilizer
trade
On
December 12, 2008, Kiwa Shandong and Kangtai entered into “Chemical Fertilizer
Sales Agreement,” (the “Chemical Fertilizer Sales Agreement”) pursuant to which,
Kiwa Shandong will sell to Kangtai 6,700 tons of chemical fertilizer products at
the tentative price of RMB3,130 per ton. Under this agreement,
Kangtai prepaid to Kiwa Shandong $2,955,550. As of December 31, 2008,
Kiwa Shandong did not sell any chemical fertilizer to Kangtai under the Chemical
Fertilizer Sales Agreement. As of June 30, 2009, the Kiwa Shandong
did not sell any chemical fertilizer under the Chemical Fertilizer Sales
Agreement.
On
November 25, 2008, Kiwa Shandong and Oriental Chemical Industrial Corp., Ltd.
(the “Oriental Chemical”) entered into “Chemical Fertilizer Sales Agreement,”
(the “Chemical Fertilizer Purchase Agreement”) pursuant to which Oriental
Chemical will sell to Kiwa Shandong 6,700 tons of chemical fertilizer products
at the tentative price of RMB3,000 per ton. Under this agreement,
Kiwa Shandong prepaid to Oriental Chemical $2,955,550. As of June 30,
2009, Kiwa Shandong did not purchase any chemical fertilizer under the Chemical
Fertilizer Purchase Agreement.
(3)
Ms. Wang
Ms. Wang
is the Secretary of the Company.
On
December 31, 2007, the amount due to Ms. Wang was $57,000. During the
twelve months ended December 31, 2008, Ms. Wang advanced $60,000 to the
Company. As of December 31, 2008, the amount due to Ms. Wang was
$117,000. Ms. Wang has agreed that the Company may repay the balance
when its cash flow circumstance allows.
(4)
Kiwa-CAU R&D Center
In
November 2006 Kiwa and China Agricultural University (the “CAU”) agreed to
jointly set up a new research and development center, named Kiwa-CAU R&D
Center. The term of the agreement was ten years commencing from July
1, 2006.
Pursuant
to the agreement, Kiwa agree to invest RMB 1 million (approximately $146,300)
each year to fund research at Kiwa-CAU R&D Center. Prof. Qi Wang,
one of our directors, is also the director of Kiwa-CAU R&D
Center. The agreement also stipulated that the Kiwa-CAU R&D
Center shall complete the following tasks each year:
l
|
Three
new technological achievements get
patented;
|
l
|
Two
technological achievements pass the provincial level or ministerial level
scientific and technological achievements
qualification;
|
l
|
Develop
two new products which can be
commercialized.
|
During
fiscal 2008, Kiwa-CAU R&D Center had concentrated on the following filed of
works:
(1).
|
Isolation
and culture of microorganisms;
|
(2).
|
Screening
of growth-promoting bacteria;
|
(3).
|
Screening
of bio-control bacteria;
|
(4).
|
Screening
of environmental microbiology;
|
(5).
|
Studies
on fermentation technology and related production
process;
|
(6).
|
Analysis
of soil and fertilizer nutrients and fertilization program
development;
|
(7).
|
Field
demonstration test of Kiwa fertilizer
products;
|
(8).
|
Application
of approval and certification of Kiwa fertilizer
products;
|
(9).
|
Application
of patents; and
|
(10).
|
Technical
training and services.
|
During
fiscal 2008, Kiwa-CAU R&D Center had successfully isolated forty-one strains
of endophytic bacillus from plants. In 2008, Ministry of Agriculture
of the PRC had granted Organic Product Certification to two of our
products. A number of strains had been observed to have the
capability of boosting crop yield, dispelling chemical pesticide residual from
soil. These strains could be used for not only developing new
biological preparation but also environmental protection
preparation. We are applying for three patents.
Management
has assessed Kiwa-CAU R&D center’s performance for the fiscal year ended
December 31, 2008; it is believed that Kiwa-CAU R&D center has achieved its
goals.
On
December 31, 2007, the amount due to Kiwa-CAU R&D Center was
$164,280. During the twelve months ended December 31, 2008, we paid
approximately $87,800 to Kiwa-CAU R&D Center. As of December 31,
2008, the outstanding balance due to Kiwa-CAU R&D Center was
$234,103.
(5)
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 operations of Kiwa
Tianjin.
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 rent is
RMB50,000 (approximately $7,300). During the twelve months ended
December 31, 2008, all scheduled rent payments were paid.
The
Company also paid $3,015 taxes on behalf of Challenge feed. As of
December 31, 2008, the outstanding balance due to Challenge Feed was $1,219,
which was unpaid rental from operating lease.
EXECUTIVE
COMPENSATION
We
currently have no Compensation Committee. The Board of Directors is
currently performing the duties and responsibilities of 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 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 2008 or 2007 exceeded $100,000. The following summary
compensation table sets forth the compensation of our Chief Executive Officer,
Mr. Wei Li and our Chief Financial Officer, Mr. Lianjun Luo for the fiscal year
of 2007 and 2008.
During
these two periods, the Company did not make any payment of salary to Mr. Wei
Li.
Summary
Compensation Table
Name and
Principal position
|
|
Year
|
|
Salary
($)
|
|
|
Bonus
($)
|
|
|
Stock
Awards
($)
|
|
|
Option
Awards
($)(1)
|
|
|
Non-Equity
Incentive Plan
Compensation
($)
|
|
|
Nonqualified
Deferred
Compensation
Earnings ($)
|
|
|
All Other
Compensation
($)
|
|
|
Total
($)
|
|
(a)
|
|
(b)
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
Wei
Li, CEO
|
|
2008
|
|
|
75,000
|
|
|
|
Nil
|
|
|
|
Nil
|
|
|
|
Nil
|
|
|
|
Nil
|
|
|
|
Nil
|
|
|
|
Nil
|
|
|
|
75,000
|
|
Wei
Li, CEO
|
|
2007
|
|
|
75,000
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
|
75,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lianjun
Luo, CFO
|
|
2008
|
|
|
48,000
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
|
48,000
|
|
Lianjun
Luo, CFO
|
|
2007
|
|
|
48,000
|
|
|
|
Nil
|
|
|
Nil
|
|
|
Nil
|
|
|
12,000
|
|
|
Nil
|
|
|
Nil
|
|
|
|
60,000
|
|
(1)
|
Options
granted on December 12, 2006. For material terms of the grant,
see additional information below under subheading entitled “2004 Stock
Incentive Plan” under this Item 10 of the Form 10-K. The fair
value of these options at the date of grant was estimated using a
Black-Scholes option pricing model.
|
Executive
Officers Information
During
2008, our executive officers included Messrs. Wei Li, Lianjun Luo, Qi Wang,
Dianyuan Song, Yvonne Wang and Xin Ma.
Information
regarding the backgrounds of Messrs. Wei Li, Chief Executive Officer, and Qi
Wang is set forth above under “Proposal 1 Election of Directors.”
Steven Ning
Ma is the Chief Financial Officer and Chief Operating Officer of the
Company. Prior to joining the Company, Mr. Ma served as Managing
Director of SAS Conserve de Provence from 2006 to 2008. Prior to
that, Mr. Ma was the Senior Managing Partner of HJV (Hejun) Consulting (Ltd.)
from 2004 to 2005. Mr. Ma received his Master degree in
Economics/Finance from the Graduate School of Chinese Academy of
Sciences. He is also Ph.D. Candidate in Financial Economics from
Wageningen University, Netherlands.
Dianyuan
Song was appointed to be our Vice President-Marketing in February
2008. Prior to that Mr. Song was serving as Marketing and Sales
Director of the Company since joining us in October 2007. Mr. Song
served as a member of senior management of HuaKen Group of China, which is a
large enterprise group specializing in marketing and distributing of fertilizer
in China. Mr. Song holds a Bachelor’s degree from Agriculture
University of Shenyang.
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 Vice President on January 4, 2009, prior to that, Mr. Ma was
Associate Chief Financial Officer of the Company 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.
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 Grant
On
December 12, 2006, our Board of Directors granted 2,000,000 options under the
Plan, of which 823,700 shares were granted to the current executive officers and
directors. The exercise price was $0.175, equal to the closing price
of our common stock on December 12, 2006. Pursuant to the approval of
Board of Directors, after each of the first and second anniversaries of the
grant date, 33% percent of the options will become exercisable. After
the third anniversary of the grant date, 34% of the options will become
exercisable.
During
2008, a total number of 222,500 unexercised stock options were returned to the
Plan pool following the separation of certain company
employees. These stock options are available for future
grant.
On
December 12, 2008, 471,800 outstanding stock options were vested, among which
179,200 stock options in total are held by our current executive
officers.
No
options were granted under the Plan during 2008.
Outstanding
Equity Awards at 2008 Fiscal Year-End
The
following table sets forth the status of all outstanding equity awards of the
Company as of December 31, 2008.
Option
Exercises and Stock Vested
|
Option Awards
|
Stock Awards
|
|
|
|
|
|
Name
|
Number of Shares
Acquired on Exercise
(#)
|
Value Realized
on Exercise ($)
|
Number of Shares
Acquired on Vesting (#)
|
Value Realized
on Vesting ($)
|
|
|
|
|
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
Wei
Li
|
Nil
|
Nil
|
Nil
|
Nil
|
Lianjun
Luo
|
Nil
|
Nil
|
Nil
|
Nil
|
Yunlong
Zhang
|
Nil
|
Nil
|
Nil
|
Nil
|
Qi
Wang
|
Nil
|
Nil
|
Nil
|
Nil
|
Yvonne
Wang
|
Nil
|
Nil
|
Nil
|
Nil
|
Xin
Ma
|
Nil
|
Nil
|
Nil
|
Nil
|
Total
|
Nil
|
Nil
|
Nil
|
Nil
|
Aggregate
Option Exercises and Fiscal-Year-End Value
No stock
options were exercised by any executive officers during 2007 and
2008. We did not adjust or amend the exercise price of any stock
options previously awarded to any named executive officers during 2007 and
2008.
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 2008, all of the required filings
were made on a timely basis.
STOCKHOLDER
PROPOSALS FOR THE 2010 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,
2009.
In
accordance with our bylaws, in order to be properly brought before the 2010
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 2010 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 2010 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
[ ●
]
[FRONT]
PROXY
FOR
ANNUAL MEETING OF THE STOCKHOLDERS
KIWA
BIO-TECH PRODUCTS GROUP CORPORATION
This
Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints Wei Li
and Yvonne Wang (collectively, the “Proxies”), and each of them, with full power
of substitution, as proxies to vote the shares which the undersigned is entitled
to vote at the Annual Meeting of the Company to be held 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, on [
– ], 2009
at 10:00 a.m. local time and at any adjournments thereof.
1. Election
of
Directors:
|
FOR
all
Nominees
|
WITHHOLD
AUTHORITY
for
all Nominees
|
FOR
all Nominees
EXCEPT
|
|
o
|
o
|
o
|
Nominees:
(1) Wei
Li
(2) Xucheng
Hu
(3) Lianjun
Luo
(4) Yunlong
Zhang
(5) Qi
Wang
Instruction: To
withhold authority to vote for any individual nominee, mark “For All Nominees
Except” and write the name of the nominee(s) below:
2.
|
Ratify
the appointment of
|
FOR
|
WITHHOLD
|
|
AGCA,
Inc.
|
o
|
o
|
|
as
the Company’s independent auditors
|
|
|
|
for
the fiscal year ending
|
|
|
|
December
31, 2009
|
|
|
|
|
|
|
3.
|
Approve
an amendment to
|
FOR
|
WITHHOLD
|
|
our
certificate of incorporation
|
o
|
o
|
|
to
increase the number of authorized shares
|
|
|
|
of
our common stock from 400,000,000
|
|
|
|
to
800,000,000 shares
|
|
|
In their
discretion, the Proxies are authorized to vote upon such other business as may
properly come before the meeting.
This proxy when properly signed will be
voted in the manner directed herein by the undersigned stockholder. IF NO DIRECTION IS MADE, THIS PROXY
WILL BE VOTED “FOR” EACH OF THE NOMINEES SET FORTH IN PROPOSAL 1, “FOR” ON
PROPOSAL 2 AND PROPOSAL 3, AND IN THE DISCRETION OF THE PROXIES AS TO ANY OTHER
MATTERS THAT PROPERLY COME BEFORE THE ANNUAL MEETING.
|
|
Signature
|
|
|
|
|
|
Signature,
if held jointly
|
|
|
|
Dated:
____________________, 2009
|
|
IMPORTANT – PLEASE SIGN AND
RETURN PROMPTLY. When shares are held by joint tenants, both should
sign. When signing as attorney, executor, administrator, trustee, or
guardian, please give full title as such. If a corporation,
please sign in full corporate name by President or other authorized
officer. If a partnership, please sign in partnership name by an
authorized person.
|