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
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