6-K 1 ea146902-6k_kbsfashion.htm REPORT OF FOREIGN PRIVATE ISSUER

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF THE

SECURITIES EXCHANGE ACT OF 1934

 

For the month of September 2021

 

Commission File Number 001-35715

 

KBS FASHION GROUP LIMITED

(Translation of registrant’s name into English)

 

Xin Fengge Building

Yupu Industrial Park

Shishi City, Fujian Province 362700

People’s Republic of China

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F ☒ Form 40-F ☐

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

 

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

 

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

On September 3, 2021, we announced our unaudited financial results for 6 months ended on June 30, 2021, which are set forth below:

 

 

 

 

 

   As at
June 30,		   As at
December 31,		 
   2021   2020 
Non-current assets        
Property, plant and equipment, net   2,778,426    2,837,609 
Investment property, net   8,091,037    8,274,195 
Prepayments and premiums under operating leases   2,828,252    2,339,406 
Land use rights   603,830    604,970 
Deferred tax assets   18,270,070    16,960,839 
    32,571,615    31,017,019 
Current assets          
Inventories   2,199,904    1,854,997 
Trade receivables   9,279,256    11,352,617 
Other receivables and prepayments   784,833    1,549,002 
Related party receivables   298,218    - 
Prepayments and premiums under operating leases   87,837    80,494 
Cash and cash equivalents   14,104,354    16,621,290 
    26,754,402    31,458,400 
Total assets   59,326,017    62,475,419 
           
Current liabilities          
Short term bank loans   1,160,973    1,148,959 
Trade and other payables   2,027,930    5,356,542 
Dividend Payable   7,149,996    - 
Due to related parties   -    1,132,811 
Contract liabilities   186,627    257,529 
Income tax payable   2,958,083    47,916 
    13,483,609    7,943,757 
Total liabilities   13,483,609    7,943,757 
           
Equity          
Share capital   575    341 
Share premium   14,160,013    11,312,643 
Revaluation reserve   184,272    184,272 
Statutory surplus reserve   6,084,836    6,084,836 
Retained profits   28,305,558    40,406,391 
Foreign currency translation reserve   (2,892,845)   (3,456,821)
    45,842,409    54,531,662 
Total liabilities and equity   59,326,018    62,475,419 

 

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   For the six months ended 
   June 30,
2021		   June 30,
2020		 
         
Revenue   12,709,722    4,488,527 
Cost of sales   (11,956,851)   (3,334,862)
Gross profit   752,871    1,153,665 
           
Other income   24,159    195,703 
Other losses   (2,983,494)   (535,192)
Distribution and selling expenses   (1,213,768)   (3,280,598)
Administrative expenses   (2,622,510)   (1,593,570)
Loss from operations   (6,042,742)   (4,059,992)
           
Finance costs   (33,275)   (31,138)
           
Loss before tax   (6,076,017)   (4,091,130)
           
Income tax income   1,125,176    958,516 
           
Loss for the period   (4,950,841)   (3,132,614)
           
Other comprehensive loss          
- currency translation differences   563,976    (1,848,413)
Total comprehensive loss for the period   (4,386,865)   (4,981,027)
           
Loss per share of common stock attributable to the Company          
- Basic   (1.21)   (1.21)
- Diluted   (1.21)   (1.21)
Weighted average shares outstanding:          
- Basic   4,100,257    2,591,299 
- Diluted   4,100,257    2,591,299 

 

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   For the six months ended 
   June 30,
2021		   June 30,
2020		 
OPERATING ACTIVITIES        
Loss for the period   (4,950,840)   (3,132,614)
Adjustments for:          
Share-based payment   708,053    - 
Finance cost   33,275    31,138 
Interest income   (22,591)   (29,293)
Depreciation of property, plant and equipment & investment property   586,235    349,161 
Amortization of prepayments and premiums under operating leases   50,512    42,825 
Provision/ (reversal) of inventory obsolescence   1,779    (14,827)
Bad debt provision of trade receivables   2,981,680    777,847 
Gain on disposal of property, plant and equipment   -    6,900 
Operating cash flows before movements in working capital   (611,897)   (1,968,863)
           
Increase in trade and other receivables   (486,463)   (572,964)
Increase in inventories   (326,883)   (595,369)
Increase in other current assets   (260,330)   - 
Increase in deferred tax assets   (1,130,469)   (958,516)
Decrease in trade and other payables   (416,675)   (194,502)
Decrease in other current liabilities   (73,503)   - 
Decrease in income tax payable   (44,515)   - 
CASH USED IN OPERATING ACTIVITIES   (3,350,735)   (4,290,214)
NET CASH USED IN OPERATING ACTIVITIES   (3,350,735)   (4,290,214)
           
INVESTING ACTIVITIES          
Interest received   22,591    29,293 
Proceeds on disposal of property, plant and equipment   -    31,829 
Purchase of property, plant and equipment   (14,141)   - 
NET CASH FROM INVESTING ACTIVITIES   8,450    61,122 
           
FINANCING ACTIVITIES          
Proceeds from issuance of preferred shares   1,500,000    - 
Interest paid   (33,275)   (31,138)
New bank loans raised   1,159,525    1,065,152 
Repayment of borrowings   (1,159,525)   (1,065,152)
Advance from related party   2,826    249,485 
NET CASH FROM FINANCING ACTIVITIES   1,469,551    218,347 
           
NET DECREASE IN CASH AND CASH EQUIVALENTS   (1,872,734)   (4,010,745)
Effects of foreign currency translation   (644,202)   (234,788)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD   16,621,290    20,620,478 
CASH AND CASH EQUIVALENTS AT END OF PERIOD   14,104,354    16,374,945 

 

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On September 3, 2021, we release the press release furnished herewith as Exhibit 99.1

 

On September 1, 2021, our Board of Directors approved an amendment to Section 4 (Voting Rights) of our Certificate of Designation for our Series A Convertible Preferred Stock, to forbid voting of Series A Preferred Stock until one year from the date of issue, or April of 2022.

 

On September 1, 2021, our board of directors granted an aggregate of 650,000 shares of common stock pursuant to the Company’s 2018 Equity Incentive Plan to the Company’s executive officers, directors and certain employees as compensations for their services. The grants to the Company’s executive officers and directors were as follows:

 

●Keyan Yan, Co-Chairman and Chief Financial Officer, was granted 150,000 shares;

 

  ● Sun Lei, director and Chief Executive Officer, was granted 200,000 shares;

 

  ● Huidan Li, Co-Chairman and Chairman of ESG Committee, was granted 200,000 shares;
     
  ● Liu Ze, Chief Technology Officer, was granted 10,000 shares;

 

On September 1, 2021, we closed the private offering of convertible preferred stock. For total subscription proceeds of $1,500,000, we issued 150,000 shares of our newly-designated Series C Convertible Preferred Stock to Sun Lei, our Chief Executive Officer and a member of our board. Our Series C Convertible Preferred Stock features a stated value of $10.00 and is convertible to shares of our common stock at any time after 6 months from the date of issue. Series C Convertible Preferred Stock votes together without common stock on an as-if-converted basis, which is not exercisable for one year, has no special dividend rights, and ranks equally to our common stock with respect to rights upon liquidation. All shares of common stock issuable upon conversion of the Series C Preferred Stock are subject to a one-year lock-up agreement running from the initial closing of the financing. Our offer and sale of the Series C Preferred Stock was exempt under Rule 506(b) under Regulation D, as it did not involve any general solicitation or advertising and was made to an accredited investor within the meaning of Rule 501 under Regulation D. This transaction has been approved by the board of directors of the company and by written consent of majority of the shareholders of the company.

 

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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, thereunto duly authorized.

 

Date: September 1, 2021 KBS Fashion Group Limited
     
  By: /s/ Sun Lei
    Sun Lei
    Chief Executive Officer

 

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EXHIBIT INDEX

 

Exhibit Number   Description
3.1   Certificate of Designation for Series C Convertible Preferred Stock
3.2   Amendment to Certificate of Designation for Series A Convertible Preferred Stock
10.1   Form of Lock-up Agreement
99.1   Press Release

 

 

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