NANPING, China,
Oct. 25, 2021
/PRNewswire/ -- Happiness Biotech Group Limited (the
"Company" or Nasdaq: HAPP), a China-based company engaging in the business
of production of nutraceutical and dietary supplements, providing
e-commerce solutions, and the sales of automobile, today announced
that it and its wholly owned-subsidiary, Fujian Happiness Biotech
Co., Limited ("Happiness Fujian") have signed a share transfer
agreement (the "Agreement") to acquire 70% of the equity interest
in Fujian Shennong Jiagu Development Co., Ltd. ("Fujian Shennong")
to further strengthen the Company's industrial integration.
Fujian Shennong is a company with a solid customer's base,
focusing on the trading of agriculture products and the supply
chain management. Fujian Shennong had generated annual revenues of
over $20 million on average from the
fiscal year of 2014 to the fiscal year of 2019. However, due to the
outbreak of COVID-19 in early 2020, the business of Fujian Shennong
was severely affected and its business was not able to return to
the normal level until the second fiscal quarter of 2021.
The parties agreed that the valuation of Fujian Shennong is
approximately RMB103 million
(approximately $16.1 million).
Pursuant to the terms of the Agreement, Happiness Biotech will
issue 4.2 million shares to a certain equity owner of Fujian
Shennong (the "Seller") and make a cash payment of RMB48 million (approximately $7.5 million) in exchange for the 70% equity of
Fujian Shennong. The Company and Happiness Fujian will have
the right to require the Seller to purchase back the equity
interests of Fujian Shennong at a consideration of 72.1 million
(approximately $11.3 million) in cash
if Fujian Shennong cannot reach an aggregate net profit of
RMB 45 million (approximately
$7.04 million) during the next three
fiscal years.
"We are very glad that we have finally entered into an agreement
for the acquisition of the majority equity of Fujian Shennong. We
have had a lengthy negotiation with Fujian Shennong and after the
in-depth due diligence and audit of Fujian Shennong, we are very
impressed with Shennong's management and achievements in its
trading and supply chain business. Fujian Shennong's advantages in
trading of agricultural products and supply chain management will
greatly improve our margin and efficiency in the nutraceutical and
dietary supplements products business and our e-commerce business.
At the same time, we also believe that with our cooperation and
support, Fujian Shennong will quickly return to the business level
before the COVID-19 pandemic, and even delivery better performance.
This will be a win-win deal," said Mr. Xuezhu Wang, CEO of the Company.
About Happiness Biotech Group Limited
Headquartered in Nanping, China, Happiness Biotech Group Limited
currently has three business lines：nutraceutical and dietary
supplements, e-commerce and auto sales. The nutrition and dietary
supplements business is focusing on the research, development,
manufacture and marketing of various products made from Chinese
herbal extracts and other ingredients. Over the past 17 years, we
have established a product portfolio consisting of 23 PRC National
Medical Products Administration registered "Blue-Cap" SKUs of
nutraceutical and dietary supplements products. Our e-commerce
business focuses on offering e-commerce solutions, including
advertising and information technology services to small and
medium-sized enterprises in China.
We also run our online stores which carries our products of dietary
supplements and other selected products sourced from the small and
medium-sized enterprises in China.
Our mission for the e-commerce business is to enable small and
medium-sized enterprises to fully leverage the power of e-commerce
to grow rapidly. Our automobile sales adopts the B2B business model
and is committed to optimizing the auto supply chain by connecting
car dealers on our online automobile sales platform and offering
the overall services for purchasing automobiles. For more
information, please visit: www.happ.org.cn
Forward-Looking Statements
This press release contains forward-looking statements as
defined by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements that are other than
statements of historical facts. When the Company uses words such as
"may, "will, "intend," "should," "believe," "expect," "anticipate,"
"project," "estimate" or similar expressions that do not relate
solely to historical matters, it is making forward-looking
statements. Forward-looking statements are not guarantees of future
performance and involve risks and uncertainties that may cause the
actual results to differ materially from the Company's expectations
discussed in the forward-looking statements. These statements are
subject to uncertainties and risks including, but not limited to,
the following: the Company's goals and strategies; the
Company's future business development; product and service demand
and acceptance; changes in technology; economic conditions;
reputation and brand; the impact of competition and pricing;
government regulations; fluctuations in general economic and
business conditions in China, the
COVID-19 outbreak and its impact on our operations and assumptions
underlying or related to any of the foregoing and other risks
contained in reports filed by the Company with the Securities and
Exchange Commission. For these reasons, among others,
investors are cautioned not to place undue reliance upon any
forward-looking statements in this press release. Additional
factors are discussed in the Company's filings with the U.S.
Securities and Exchange Commission, which are available for review
at www.sec.gov. The Company undertakes no obligation to publicly
revise these forward-looking statements to reflect events or
circumstances that arise after the date hereof.
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SOURCE Happiness Biotech Group Limited
