UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant To Section 13 or 15(d) Of The Securities Exchange Act Of 1934
Date of Report (Date of Earliest Event Reported): April 2, 2018
LEO MOTORS, INC.
(Exact name of registrant as specified in its charter)
Nevada |
| 000-53525 |
| 81-4108026 |
(State or Other Jurisdiction |
| (Commission File Number) |
| (IRS Employer Identification No.) |
of Incorporation) |
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ES Tower 7F, Teheranro 52 Gil 17, Gangnamgu, Seoul |
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Republic of Korea |
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| 06212 |
(Address of Principal Executive Offices) |
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mart if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 1.01 Entry Into a Material Definitive Agreement.
Item 2.01 Completion of Acquisition or Disposition of Assets.
On April 2, 2018, Leo Members, Inc., a corporation incorporated in the Republic of Korea ("Members") and wholly-owned subsidiary of Leo Motors, Inc. (the “Company”), entered into sale and purchase agreements (the "Agreements"), with individual buyers pursuant to which Members sold an aggregate of four thousand (4,000) shares of common stock of Leo Motors Factory, Inc. (“Leo Factory 1”), an aggregate of three hundred (300) shares of common stock of Leo Motors Factory 2, Inc. (“Leo Factory 2”) and an aggregate of two thousand (2,000) shares of common stock of Leo Trading, Inc. (“Leo Trading”), all of which are subsidiaries of the Company, to the respective buyers for an aggregate of Two Million (2,000,000 KRW) South Korean Won (approximately $1,849 U.S. Dollars), an aggregate of One Million Five Hundred Thousand (1,500,000 KRW) South Korean Won (approximately $1,420 U.S. Dollars), and an aggregate of Two Million (2,000,000 KRW) South Korean Won (approximately $1,849 U.S. Dollars), respectively.
As a result of the transactions pursuant to the Agreements, Members’ interest in each of Leo Factory 1, Leo Factory 2 and Leo Trading decreased from 50% to 49%.
The foregoing description of the Agreements is not complete and is qualified in its entirety by reference to the Agreements, copies of which are attached hereto as Exhibit 10.1, Exhibit 10.2 and Exhibit 10.3, respectively, and are hereby incorporated herein by reference.
| Item 9.01 | Financial Statements and Exhibits. |
(b) Pro forma financial information.
The unaudited pro forma consolidated financial statements for the year ended December 31, 2017 are filed herewith as Exhibit 99.1. The unaudited pro forma consolidated financial statements for the three months ended March 31, 2018 will be filed by amendment when available.
| (d) | Exhibits. |
Exhibit No. |
| Description |
10.1 |
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10.2 |
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10.3 |
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99.1 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LEO MOTORS, INC. |
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Dated: April 6, 2018 | By: /s/Shi Chul Kang |
| Shi Chul Kang |
| Co-Chief Executive Officer (Principal Executive Officer)
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Exhibit 10.1
STOCK SALE AND PURCHASE AGREEMENT
is made and entered as of April 02, 2018
Seller: Leo Members, Inc.
Address: ES Tower 6F, Teheranro 52 Gil 17, Gangnamgu, Seoul Korea.
Buyer: Kwang-min Chae
Address: 10, Songijeong-ro 7-gil, Mapo-gu Seoul Korea.
AGREEMENT
The Seller desires to sell, and the Buyer desires to purchase, Four Thousand (4,000) shares of common stock (the “Shares”) of Leo Motors Factory 1, Inc. on the terms and conditions set forth in this Agreement.
In consideration of, and in express reliance upon, the representations and warranties of the Seller and the Buyer in this Agreement, the Seller agrees to sell, assign and transfer to the Buyer, all of its right, title and interest in and to the Share at the per sharers price of KRW 500, for an aggregate purchase price of 2,000,000 KRW ("Purchase Amount") for the Shares.
The Purchase Amount shall be paid by cash or wire transfer to bank account designated by the Seller within Ten (10) days from the Agreement established.
Leo Members, Inc. ("Seller")
By:
/s/ Shi Chul Kang
__________________________
Name:Shi Chul Kang
Title:CEO
Date: April 02, 2018
Kwang-min Chae ("Buyer ")
By:
/s/ Kwang-min Chae
__________________________
Name: Kwang-min Chae
Date: April 02, 2018
Exhibit 10.2
STOCK SALE AND PURCHASE AGREEMENT
is made and entered as of April 02, 2018
Seller: Leo Members, Inc.
Address: ES Tower 6F, Teheranro 52 Gil 17, Gangnamgu, Seoul Korea.
Buyer: Young-hee Kim
Address: 31, Sangmo-ro 10-gil, Gumi-si, Gyeongsangbuk-do, Korea.
AGREEMENT
The Seller desires to sell, and the Buyer desires to purchase, Three Hundred (300) shares of common stock (the “Shares”) of Leo Motors Factory 2, Inc. on the terms and conditions set forth in this Agreement.
In consideration of, and in express reliance upon, the representations and warranties of the Seller and the Buyer in this Agreement, the Seller agrees to sell, assign and transfer to the Buyer, all of its right, title and interest in and to the Share at the per sharers price of KRW 5,000, for an aggregate purchase price of 1,500,000 KRW ("Purchase Amount") for the Shares.
The Purchase Amount shall be paid by cash or wire transfer to bank account designated by the Seller within Ten (10) days from the Agreement established.
Leo Members, Inc. ("Seller")
By:
/s/ Shi Chul Kang
__________________________
Name:Shi Chul Kang
Title:CEO
Date: April 02, 2018
Young-hee Kim ("Buyer ")
By:
/s/ Young-hee Kim
__________________________
Name: Young-hee Kim
Date: April 02, 2018
Exhibit 10.3
STOCK SALE AND PURCHASE AGREEMENT
is made and entered as of April 02, 2018
Seller: Leo Members, Inc.
Address: ES Tower 6F, Teheranro 52 Gil 17, Gangnamgu, Seoul Korea.
Buyer: Young-hee Kim
Address: 31, Sangmo-ro 10-gil, Gumi-si, Gyeongsangbuk-do, Korea.
AGREEMENT
The Seller desires to sell, and the Buyer desires to purchase, Two Thousand (2,000) shares of common stock (the “Shares”) of Leo Trading, Inc. on the terms and conditions set forth in this Agreement.
In consideration of, and in express reliance upon, the representations and warranties of the Seller and the Buyer in this Agreement, the Seller agrees to sell, assign and transfer to the Buyer, all of its right, title and interest in and to the Share at the per sharers price of KRW 1,000, for an aggregate purchase price of 2,000,000 KRW ("Purchase Amount") for the Shares.
The Purchase Amount shall be paid by cash or wire transfer to bank account designated by the Seller within Ten (10) days from the Agreement established.
Leo Members, Inc. ("Seller")
By:
/s/ Shi Chul Kang
__________________________
Name:Shi Chul Kang
Title:CEO
Date: April 02, 2018
Young-hee Kim ("Buyer ")
By:
/s/ Young-hee Kim
__________________________
Name: Young-hee Kim
Date: April 02, 2018
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2017
(AMOUNTS EXPRESSED IN US DOLLAR)
UNAUDITED
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| Registrant |
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| Historical |
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| Adjustments |
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| Pro Forma |
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ASSETS |
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Cash and equivalents |
| 344,314 |
| $ | (13,899) | (a) | $ | 330,415 |
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Receivables |
| 612,617 |
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| (15,060) | (b) |
| 597,557 |
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Inventories |
| 1,195,949 |
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| (172,437) | (c) |
| 1,023,513 |
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Other current assets |
| 1,316,476 |
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| (271,342) | (d) |
| 1,045,134 |
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Property, plant and equipment |
| 430,058 |
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| (17,377) | (e) |
| 412,681 |
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Investment in Subsidiaries |
| - |
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| 204,755 | (f) |
| 204,755 |
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Deposits and other assets |
| 689,941 |
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| (257,966) | (g) |
| 431,975 |
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Total assets |
| 4,589,356 |
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| (257,966) |
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| 4,046,031 |
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LIABILITIES |
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Accounts payable and accruals |
| 5,086,818 |
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| (1,394,808) | (h) |
| 3,692,011 |
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Taxes payable |
| 1,825,427 |
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| (967,169) | (i) |
| 858,258 |
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Long-Term accruals |
| 364,169 |
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| (116,537) | (j) |
| 247,632 |
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Long-Term debt |
| 290,918 |
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| 290,918 |
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Total liabilities |
| 7,567,352 |
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| (2,478,514) |
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| 5,088,818 |
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EQUITY |
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Common stock |
| 175,019 |
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| - |
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| 175,019 |
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Additional paid-in capital |
| 21,678,402 |
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| - |
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| 21,678,402 |
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Other comprehensive income |
| 818,309 |
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| 777,580 | (k) |
| 1,595,888 |
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Retained earnings |
| 32,229,453 |
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| 953,983 | (l) |
| (31,275,470) |
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Total equity |
| (9,557,723) |
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| 1,731,563 |
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| (7,826,161) |
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Non-controlling interest |
| 6,579,748 |
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| (203,625) | (m) |
| 6,783,373 |
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Total liabilities and equity |
| 4,589,356 |
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| (543,325) |
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| 4,046,031 |
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LEO MOTORS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
TWELVEMONTHS ENDED DECEMBER 31, 2017
(AMOUNTS EXPRESSED IN US DOLLAR)
UNAUDITED
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| Historical |
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Revenue | $ | 2,863,223 |
| $ | (2,417,479) | (n) | $ | 445,744 |
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Cost of goods sold |
| 2,217,178 |
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| (2,234,891) | (o) |
| (17,713) |
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Operating expenses |
| 4,199,987 |
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| 3,084,043 | (p) |
| 3,292,778 |
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Other income and expense |
| 153,569 |
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| (349,455) | (q) |
| (247,073) |
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Income tax expense |
| (5,716) |
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| - |
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| 5,716 |
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Non-controlling interest |
| 952,854 |
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| 363,729 | (r) |
| (589,125) |
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Net income (loss) |
| (2,453,236) |
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| 11,851 |
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| (2,492,985) |
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EPS information not included |
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Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
On April 1, 2018, the Company sold one percent (1%) each of its fifty percent (50%) ownership in three subsidiaries making their investment in each of the three subsidiaries forty-nine percent (49%). As a result, the entities are no longer consolidated but accounted for on the equity method. The above pro forma financial statements reflect the financial statements as of December 31, 2017 and for the twelve months ended December 31, 2017as the historical numbers with adjustments to get to the pro forma column as if the subsidiaries were accounted for on the equity method for the full twelve months in 2017.
(a)This represents the change in cash due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(b)This represents the change in receivables due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(c)This represents the change in inventories due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(d)This represents the change in other current assets due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(e)This represents the change in property, plant and equipment due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(f)This represents the equity investment in subsidiaries due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method. Two of the subsidiaries had continual losses and no net revenue is considered likely in the short term so those two subsidiaries equity investment was written down to zero. This figure represents the equity investment of the third subsidiary increased by the Company’s portion of income for the twelve months ended 2017.
(g)This represents the change in deposits and other assets due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(h)This represents the change in accounts payable and accruals due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(i)This represents the change in taxes payable due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(j)This represents the change in long term accruals due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(k)This represents the change in taxes payable due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(l)This represents the change in other comprehensive income due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(m)This represents the change in retained earnings due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(n)This represents the change in non-controlling interest due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(o)This represents the change in revenue due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(p)This represents the change in cost of goods sold due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(q)This represents the change in operating expenses due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(r)This represents the change in other income and expense due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.
(s)This represents the change in non-controlling interest portion of net loss due to the subsidiaries no longer being consolidated but treated as an investment based upon the equity method.