Happiness Development to Acquire Hekangyuan, One of China’s Largest Health Products Distributors in Fuzhou Region
NANPING, ChinaMarch 7, 2022 /PRNewswire/ — Happiness Development Group Limited (“HAPP” or the “Company”), (NASDAQ: HAPP) an emerging and diversified company engaged in the production of nutraceutical and dietary supplements, providing marketing solutions commercial and e-commerce sales, and auto sales today announced that it has entered into a share transfer agreement (the “Agreement”) to acquire 100% equity interest in Fuzhou Hekangyuan Trading Co. , ltd. (“Hekangyuan”) to further strengthen the Company’s distribution network.
Hekangyuan believes that it is one of the largest health product distributors in Fuzhou, China. Hekangyuan generated revenues of $17.6 million and $13.5 millionwith a net income of approximately $790,000 and $579,000 for the year ended December 31, 2021 and 2020, respectively. Pursuant to the terms of the agreement, the parties have agreed that Hekangyuan’s valuation is $12 million and the Company will issue 10 million shares of Class A common stock to Hekangyuan shareholders in addition to a cash payment of $8 million, in exchange for Hekangyuan’s 100% stake. The Company will have the right to require Hekangyuan shareholders to repurchase the common stock for $12 million in cash if Hekangyuan is unable to achieve certain performance targets, including net profit of $40.5 million over the next three years of 2022, 2023 and 2024.
“Hekangyuan is known for its distribution network of health products in Fuzhou domain and we have discussed the acquisition with them over the past few months. We believe that after the acquisition of Hekangyuan, we will further strengthen our leading position in the field of health products by Northern Fujian. At the same time, through the successful expansion of our online sales, we will also help Hekangyuan make full use of its advantages in supply chain management and distribution capabilities,” said Mr. Xuezhu WangCompany CEO.
About Happiness Development Group Limited
Based in Nanping, China, Happiness Development Group Limited currently has three business segments: nutraceuticals and dietary supplements, e-commerce and automobile sales. The nutrition and dietary supplement business focuses on the research, development, manufacture and marketing of various products based on Chinese herbal extracts and other ingredients. Over the past 17 years, we have established a product portfolio consisting of 23 “Blue-Cap” SKUs registered by the PRC National Medical Products Administration of Nutraceuticals and Dietary Supplements. Our e-commerce business focuses on providing e-commerce solutions, including advertising and information technology services to small and medium-sized businesses from China. We also manage our online stores which carry our dietary supplement products and other selected products from small and medium enterprises in China. Our mission for e-commerce is to enable small and medium-sized businesses to take full advantage of the power of e-commerce to grow rapidly. Our auto sales adopts the B2B business model and is committed to optimizing the auto supply chain by connecting auto dealers on our online auto sales platform and offering the global services for auto purchasing. For more information, please visit: www.happ.org.cn
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding future plans, objectives, goals, strategies, events or performance, as well as underlying assumptions and other statements other than statements of historical fact. Where the Company uses words such as “may”, “will”, “intends”, “should”, “believes”, “expects”, “anticipates”, “projects”, “estimates” or similar expressions that do not relate solely to material, it makes forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause actual results to differ materially from the Company’s expectations described in the forward-looking statements. These statements are subject to uncertainties and risks, including, but not limited to, the following: the occurrence of any event, change or other circumstance that could give rise to terms of the Agreement that will not be recorded in a definitive agreement; the outcome of any legal proceedings that have been or will be brought against the Company or other parties to the Agreement after the announcement of the Agreement and the transactions contemplated therein; the inability to complete the transactions contemplated by the Agreement due to unsatisfied closing conditions; the risks that the proposed transaction will disrupt ongoing plans and operations following the announcement of the agreement and the consummation of the transaction described therein; costs related to the proposed transactions contemplated by the agreement; changes in applicable laws or regulations; and other risks and uncertainties described herein, as well as the risks and uncertainties contained in the reports filed by the Company with the Securities and Exchange Commission. For these and other reasons, investors are cautioned not to place undue reliance on any forward-looking statements contained in this press release. Other factors are discussed in the Company’s filings with the United States Securities and Exchange Commission, which may be viewed at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances occurring after the date hereof.
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SOURCE Happiness Development Group Limited