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): December 6, 2017
CLEANTECH SOLUTIONS INTERNATIONAL, INC.
(Exact name of registrant as specified in Charter)
| Nevada | 001-34591 | 90-0648920 | ||
(State
or other jurisdiction of |
(Commission File No.) | (IRS
Employee |
No. 9 Yanyu Middle Road
Qianzhou Village, Huishan District, Wuxi City
Jiangsu Province, People’s Republic of China
(Address of Principal Executive Offices)
(86) 51083397559
(Registrant’s Telephone number)
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 (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ 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 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 ☐
If an emerging growth company, indicate by check mark 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. ☐
Item 8.01 Other Events
On December 6, 2017, Cleantech Solutions International, Inc.’s (the “Company”) wholly-owned subsidiary, EC Assets Management Limited ("EC Assets"), entered into a conditional share swap agreement (“Agreement”) with Ever-Long Holdings Limited and certain of its officers and directors (“Ever-Long Parties”), to acquire a 51% interest in the issued share capital of Brighten Holdings Int’l Limited (“Brighten”), a subsidiary of Styland Holdings Limited, a Hong-Kong-listed company (0211.HK). The terms of the Agreement stipulate that the Ever-Long Parties shall transfer 51% of Brighten’s issued share capital (which is valued at US$16,447,500, based on 510,000 ordinary voting shares at a price of US$32.25 per Brighten share). In exchange, the Company shall issue a certain number of its shares of common stock, representing 19.5% of the issued and outstanding shares of CLNT, and a 5-year interest-free promissory note with a principal amount of US$13,762,125 to Brighten.. The Agreement is subject to various closing conditions, including entry into a definitive agreement satisfactory to both parties and legal and financial due diligence. There can be no assurances that the parties may enter into any agreement to do a transaction, and even if an agreement is entered into, there can be no assurances that such transaction will be consummated. A copy of the Agreement and the Company’s press release announcing the Agreement are attached hereto as Exhibit 99.1 and Exhibit 99.2.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
| 2 |
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.
| Date: December 6, 2017 | Cleantech Solutions International, Inc. | |
| By: | /s/ Jianhua Wu | |
| Jianhua Wu | ||
| Chief Executive Officer |
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Exhibit 99.1
| Date: | 6 December 2017 |
| To: | Each person set out in Appendix A (“Party A”) |
| From: | EC ASSETS MANAGEMENT LIMITED (“Party B”); and |
CLEANTECH SOLUTIONS INTERNATIONAL, INC. (“CLNT”)
Dear Sirs,
Share Swap – the issued share capital of Brighten Int’l Holdings Limited (“Brighten”) in exchange for shares and promissory notes of CLNT to be made between Party A, Party B and CLNT (together the “Parties”, and each a “Party”).
The purpose of this letter (this “Letter”) is to confirm that the Parties have agreed to swap shares in the following manner:
| 1. | Party A shall transfer or allocate, or arrange to be transferred or allocated, with full legal title, free of any rights, interest or any other encumbrances, the Relevant Percentage (set out next to the relevant Party A in Appendix A) of the issued share capital of Brighten as at the date of completion of this transaction, valued at the Relevant Amount (set out next to the relevant Party A in Appendix A) (based on the Relevant Number of (set out next to the relevant Party A in Appendix A) ordinary voting shares (the “Brighten Shares”) of Brighten and the price of the USD32.25 per Brighten Share (the “Initial Price”)), to Party B, a wholly owned subsidiary of CLNT, on or before the Completion Date (as defined in Clause 2), and Party A shall execute all documents and do everything necessary to ensure that Party B will own the full legal and beneficial title to the Relevant Percentage of the Brighten Shares. |
| 2. | Party B and CLNT shall issue and allocate, or arrange to be issued and allocated, with full legal title, free of any rights, interest or any other encumbrances, (i) such number of ordinary voting shares of CLNT (the “CLNT Shares”), which are based on the Relevant CLNT Percentage (set out next to the relevant Party A in Appendix A) of the issued share capital of CLNT as at the date of the Letter and the average closing price of US$5.6387 per CLNT Share as quoted on the NASDAQ stock exchange for the past five consecutive trading days ended 4 December 2017 (United States time), and (ii) a 5 year interest free promissory note (the “Promissory Note”) in a principal amount of the Relevant CLNT Amount (set out next to the relevant Party A in Appendix A) to be issued by CLNT, to Party A on or before 31 March 2018 (or such later date as CLNT is required to fulfil the relevant laws, regulations and rules in the United States of America for the transaction) (the “Completion Date”), and Party B and CLNT shall, or shall arrange for the relevant persons to, execute all documents and do everything necessary to ensure that Party A will own the full legal and beneficial title to the CLNT Shares and the Promissory Note. The consideration for the Relevant Percentage of Brighten Shares payable by Party B under Clause 1 shall be set off in full against the consideration for the CLNT Shares and the Promissory Note. |
| 3. | Party B and CLNT hereby, jointly and severally, agree and undertake to Party A, that: |
| a. | after the Completion Date, CLNT will, as and when required by Party A, raise funds for the existing and new business and the operation costs including salaries and rental expenses of Brighten (in the form of a 5 year interest free promissory note issued by Brighten to CLNT) through investors introduced by Party A, provided that the number of shares to be issued by CLNT for each fund raising shall be less than 20% of the issued share capital of CLNT at the relevant time; and |
| b. | with respect to the CLNT Shares to Party A, the closing price of CLNT Shares, on at least one NASDAQ Stock Exchange trading day in the 4 month period (the “Relevant Period”) immediately after such CLNT Shares become freely tradeable on the NASDAQ Stock Exchange (after the restricted period or otherwise, if any) shall be at least 1.3 times of the placement price (being the price of such CLNT Shares placed or issued to Party A) of such CLNT Shares (the “Repurchase Price”). Otherwise, Party B and CLNT shall, jointly and severally, repurchase such CLNT Shares at the Repurchase Price within the 5 business days after the Relevant Period ends. |
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| 4. | a. For the avoidance of doubt, each person set out in Appendix A shall be deemed to enter into a separate letter agreement with Party B and CLNT. The obligations of each Party A under this Letter and/or a definitive agreement to be entered into by the Parties (the “Definitive Agreement”) shall be several but not joint. |
b. Unless Party A shall sell a total of 51% of the issued share capital of Brighten to Party B simultaneously on or before the Completion Date, Party B shall not be required to acquire any Brighten Share and CLNT shall not be required to issue or allot any CLNT Shares or issue the Promissory Note to Party A.
| 5. | Each of Party B and CLNT jointly and severally undertakes to Party A that it will not and will procure that its agents, officers, employees and advisers will not, at any time after the date of this letter agreement, without the prior written consent of Party A or save as required by law or any rule of any relevant stock exchange body, disclose any information concerning the business, accounts, finance or contractual arrangements or other dealings, transactions or affairs of Brighten and/or its subsidiaries supplied to Party B, CLNT, their respective, agents officers, employees or advisers by Party A, to any third party (other than those of its agents, officers, employees or advisers as are necessarily required in the course of their duties to receive and acquire such documents, information and/or knowledge under the same duty of confidentiality). For the avoidance of doubt, CLNT shall make announcement(s) in respect of this Letter in accordance with the relevant rules, regulations and laws in the United States of America. |
| 6. | Party A undertakes to Party B and CLNT that it will not and will procure that its agents, officers, employees and advisers will not, at any time after the date of this letter agreement, without the prior written consent of Party B or save as required by law or any rule of any relevant stock exchange body, disclose any information concerning the business, accounts, finance or contractual arrangements or other dealings, transactions or affairs of Party B and/or CLNT supplied to Part A, their respective, agents officers, employees or advisers by Party B and/or CLNT, to any third party (other than those of its agents, officers, employees or advisers as are necessarily required in the course of their duties to receive and acquire such documents, information and/or knowledge under the same duty of confidentiality). For the avoidance of doubt, Styland Holdings Limited, the holding company of Ever-Long Holdings Limited, shall make announcement(s) in respect of this Letter in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited. |
| 7. | None of the parties may assign or transfer any of their rights or obligations under this Letter without the written consent of the Parties. |
The obligations of the Parties to consummate the transactions contemplated under this letter agreement (the “Transactions”) are subject to (a) the satisfactory completion of legal and financial due diligence on Brighten and its subsidiaries, provided that such due diligence exercise shall not cause material adverse disruption to the daily business operations of Brighten and its subsidiaries, (b) fulfillment of all necessary consents, approvals, permits and/or authorisations by each Party with respect to the Transactions, and (c) within 45 days from the date of this Letter (or such other date as shall be agreed by the Parties), entry into the Definitive Agreement in relation to the Transactions satisfactory to each Party. If any of the (a) and (b) conditions set out above is not satisfied on or before the Completion Date (or such later date as all the Party may agree in writing), this letter shall cease and terminate (save and except confidentiality obligations imposed on the Parties which shall continue to have full force and effect) and neither party shall have any obligations and liabilities hereunder and neither party shall take any action to claim for damages or to enforce specific performance or any other rights and remedies save for any antecedent breaches of the terms hereof.
This Letter shall be governed by, and construed in accordance with, the laws of Hong Kong and the Parties submit to the non-exclusive jurisdiction of the Hong Kong courts.
Each Party shall bear its own costs and expenses (including legal fees) incurred in connection with the preparation, negotiation, execution and performance of this Letter and all documents incidental or relating to the Transactions.
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Unless expressly provided to the contrary in this Letter, a person who is not a party to this Letter shall have no right under the Contracts (Rights of Third Parties) Ordinance (Cap. 623, Laws of Hong Kong) to enforce any of the terms of this Agreement, and whether so provided in this Letter or not, no consent of third party is required for the amendment to (including the waiver or compromise of any obligation), rescission of or termination of this Letter.
Yours faithfully,
Executed
for and on behalf of
EC ASSETS MANAGEMENT LIMITED
| /s/ Sharing Economy Limited | |
Sharing Economy Investment Limited DIRECTOR |
Executed
for and on behalf of
CLEANTECH SOLUTIONS INTERNATIONAL, INC.
| /s/ Tak Yin Yip | |
Tak Yin Yip CHIEF OPERATING OFFICER |
We hereby acknowledge and agree to the terms contained in this Letter.
DATED: 6 December 2017
Executed
for and on behalf of
EVER-LONG HOLDINGS LIMITED
| /s/ Mak Kit Ping | |
Mak Kit Ping Director |
Executed
| /s/ Woo Peter Ping | |
| Woo Peter Ping |
Executed
| /s/ So Han Meng Julian | |
So Han Meng, Julian |
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Appendix A
| Party A | Relevant Percentage | Relevant Amount in USD | Relevant Number | Relevant CLNT Percentage | Relevant CLNT Amount USD | Relevant CLNT Number | ||||||
| Ever-Long Holdings Limited | 28.05 | 9,046,125.00 | 280,500 | 10.725 | 7,569,169 | 261,932 | ||||||
| Woo Peter Ping | 11.475 | 3,700,687.50 | 114,750 | 4.3875 | 3,096,478 | 107,154 | ||||||
| So Han Meng, Julian | 11.475 | 3,700,687.50 | 114,750 | 4.3875 | 3,096,478 | 107,154 |
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Exhibit 99.2
Cleantech Solutions International Enters into Conditional Share Swap Agreement with Ever-Long Holdings Limited to Enter Investment Management Business
HONG KONG, Dec. 6, 2017 -- Cleantech Solutions International, Inc. ("Cleantech Solutions" or "the Company") (“CLNT”) (Nasdaq: CLNT) today announced that its wholly-owned subsidiary, EC Assets Management Limited ("EC Assets"), has entered into a conditional share swap agreement (“agreement”) with Ever-Long Holdings Limited and certain of its officers and directors (“Ever-Long Parties”), to acquire a 51% interest in the issued share capital of Brighten Holdings Int’l Limited (“Brighten”), a subsidiary of Styland Holdings Limited, a Hong-Kong-listed company (0211.HK). The terms of the agreement stipulate that the Ever-Long Parties shall transfer 51% of Brighten’s issued share capital (which is valued at US$16,447,500, based on 510,000 ordinary voting shares at a price of US$32.25 per Brighten share). In exchange, the Company shall issue a certain number of its shares of common stock, representing 19.5% of the issued and outstanding shares of CLNT, and a 5-year interest-free promissory note with a principal amount of US$13,762,125 to Brighten. The agreement is subject to various conditions, including entry into a definitive agreement satisfactory to both parties and legal and financial due diligence.
Brighten is a boutique investment firm specializing in securitization, mergers and acquisitions, and direct investments into technology companies related to the sharing economy, O2O (offline to online and vice versa), and Fintech (finance technology). For the first half of its fiscal year 2017, Brighten has recorded an unaudited net profit of HK$25 million, and it is currently engaged in either direct investments or joint ventures of more than 30 technology companies.
“We are excited to establish a collaborative relationship with CLNT as it focuses on developing its sharing economy businesses and pursuing technology and media innovation acquisitions,” said Peter Woo, COO of Brighten. “CLNT has been actively involved in the acquisition of innovative technology and media businesses, which are the sectors Brighten has been actively investing in as well. The collaboration will provide Brighten with a broader global platform to further expand our innovative technology investment options and provide more fruitful returns to our investors.”
"Our collaboration with Brighten opens some promising new growth areas for us as we explore innovative technology and media acquisition opportunities, as well as opening up a new investment management function in the group," said Parkson Yip, COO of Cleantech Solutions. "Brighten is led by industry veterans with extensive expertise in the capital markets at top-tier financial institutions. We believe Brighten’s expertise in investment management and direct investments in innovative technology and media companies, combined with our own competitive advantages and available resources, will result in an extremely beneficial collaboration for both parties.”
There can be no assurances that the parties may enter into any agreement to do a transaction, and even if an agreement is entered into, there can be no assurances that such transaction will be consummated.
About Cleantech Solutions International
Cleantech
Solutions International (“CLNT”), through its affiliated companies, designs, manufactures and distributes a line of
proprietary high and low temperature dyeing and finishing machinery to the textile industry. The Company's latest business
initiatives are focused on targeting the technology and global sharing economy markets, by developing online platforms and rental
business partnerships that will drive the global development of sharing through economical rental business models.
About Brighten International Holdings
Brighten is a boutique investment firm specializing in securitization, mergers and acquisitions, and direct investments into technology companies related to the sharing economy, O2O (offline to online and vice versa), and Fintech (finance technology). As a Fintech firm primarily operated by financial professionals, Brighten has successfully structured, invested, organized and managed an ecosystem of technology companies to achieve profitability. As of the first half of this financial year ending in March 2018, Brighten has achieved a net profit of about HKD25 million.
Safe Harbor Statement
This release contains certain "forward-looking statements" relating to the business of the Company and its subsidiary and affiliated companies and certain potential transactions that they may enter into. These forward looking statements are often identified by the use of forward looking terminology such as "believes," "expects" or similar expressions. Such forward looking statements involve known and unknown risks and uncertainties that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on its website, including factors described in "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Form 10-K for the year ended December 31, 2016 and in our Form 10-Q for the quarter ended September 30, 2017. All forward-looking statements attributable to the Company or to persons acting on its behalf are expressly qualified in their entirety by these factors other than as required under the securities laws. The Company does not assume a duty to update these forward-looking statements.
###
Contact Information:
Cleantech
Solutions International, Inc.
Parkson Yip, Chief Operating Officer
parkson.yip@cleantechsolutionsinternational.com
+852-31060372
Joseph Chow, Director of Investor Relations
ir@cleantechsolutionsinternational.com
Web: www.cleantechsolutionsinternational.com