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):
June 18, 2020
____________________________
ChineseInvestors.com, Inc.
(Exact name of registrant as specified in its charter)
____________________________
| Indiana | 000-54207 | 35-2089868 |
| (State of Organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
| 227 W. Valley Blvd. #208A, San Gabriel, CA | 91776 | |
| (Address of principal executive offices) | (Zip Code) |
(626) 589-2468
(Registrant’s telephone number, including area code)
Check appropriate box below if the Form 8-K filing is intended to simultaneously satisfying 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 under the Exchange Act (17 CFR 240.14a-12)
☐ 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))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each Class | Trading Symbol(s) | Name of each exchange on which registered |
| N/A | N/A | N/A |
Securities registered pursuant to Section 12(g) of the Act: None
☐ 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).
☐ 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 1.03 Bankruptcy or Receivership
On June 18, 2020, the Company filed a voluntary petition for reorganization under Chapter 11 of the Federal Bankruptcy Code in the United States Bankruptcy Court for the Central District of California, case no. 2:20-bk-15501-ER. The Court took jurisdiction over the Company’s operations effective June 18, 2020, the date the petition was filed.
Unlike a liquidating bankruptcy proceeding, a reorganization under Chapter 11 of the U.S. Bankruptcy Code, 11 U.S.C. §§1101 et seq., is intended to allow a company to continue as a going concern by presenting a plan to make modifications to the company’s debt obligations and equity securities to enhance the company’s likelihood of continuing as a going business. The Company will present its plan for reorganization to the Bankruptcy Court and ultimately to the holders of its debt obligations and equity securities for voting on the acceptability of the proposed treatment of their class of debt or equity under the proposed plan of reorganization.
Item 3.01 Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
The filing for bankruptcy reorganization constitutes the failure to satisfy a continued listing rule or standard for the OTC:QB market, on which the Company’s shares of common stock are listed for trading. The Company expects that the OTC market will suspend trading of the Company’s shares on the OTC:QB exchange as of the filing of the Company’s reorganization petition. The Company has notified the OTC markets of the filing of the reorganization petition by copy of this Current Report.
Item 3.03 Material Modification to Rights of Security Holders.
The Company’s reorganization plan, if confirmed and approved by the Bankruptcy Court, will materially modify the rights of all of the Company’s security holders. If approved, the Company’s general creditors will receive preferred equity having an equal face amount for their debt instruments, the preferred shareholders will receive shares of common stock for their preferred stock at an exchange rate to be determined and the current owners of common stock would be substantially diluted under the reorganization plan if confirmed and approved..
| Item 8.01 | Other Events. |
Suspension of Section 10 Filings.
The Company expects to file for a no-action letter from the Securities and Exchange Commission authorizing the Company to suspend its filing of quarterly reports on Form 10-Q and its annual report on Form 10-K during the pendency of the reorganization proceeding. If the Commission grants the no-action letter, the Company would not file an annual report on Form 10-K for the fiscal year ended May 31, 2020 and would not file a quarterly report on Form 10-Q for subsequent fiscal quarters while the Company’s plan of reorganization is still pending with the Bankruptcy Court. Instead, the Company will file monthly reports with the Bankruptcy Court and will file copies of those monthly reports with the Commission on a timely basis on a Current Report on Form 8-K.
Trading Securities
The Company cautions that acquiring the Company’s loans or trading in the Company’s securities during the pendency of the reorganization is highly speculative and poses substantial risks. The purchase or trading prices for the Company’s loans or securities may bear little or no relationship to the actual recovery, if any, by holders of the Company’s securities in the reorganization and the holders should be prepared to bear the risk the loss of all or most of the value of such loans or securities.
Press Release
The Company has issued a press release further designed to put the Company’s reorganization in perspective. That press release is enclosed as Exhibit 99.1.
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Item 9.01 Financial Statements and Exhibits
| Exhibit Number | Description |
| 99.1 | Press release dated June 18, 2020 |
Forward-Looking Statements
Certain statements herein and in the exhibits attached hereto, are “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements reflect the Company’s current expectations or beliefs concerning future events, and actual results of operations may differ materially from historical results or current expectations. Any such forward-looking statements are subject to various risks and uncertainties, including risks related to the terms of and potential transactions contemplated by the Company’s proposed plan of reorganization, the anticipated mailing date of solicitation materials to the Company’s securities holders, the ability of the Company to obtain requisite support for the reorganization from various stakeholders, the ability of the proposed plan of reorganization to satisfy all the requirements necessary for confirmation by the Bankruptcy Court, the ability of the Company to successfully execute the transactions contemplated by the reorganization plan without substantial disruption to the Company’s business, the high costs of bankruptcy proceedings and related fees, including the risk that the restructuring will take longer than anticipated, the actions and decisions of the Company’s creditors and other third parties who have interests in the reorganization that may be inconsistent with the Company’s operational and strategic plans, the ability of the Company to continue as a going concern, and the effects of disruption from the proposed restructuring making it more difficult to maintain business, financing and operational relationships and to retain key executives. Forward-looking statements are also subject to various risks and uncertainties related to the Company’s business, such as its ability to anticipate and timely respond to changes in trends and consumer preferences, the strength of the global economy, competitive market conditions, its ability to attract and retain key personnel, its ability to successfully develop, launch and grow its newer concepts and execute on strategic initiatives, product offerings, sales channels and businesses, its ability to implement its growth strategy, material disruption to its information systems, compromises to its data security, its ability to maintain the value of its brands and protect its trademarks, its ability to implement its business strategy, changes in demographic patterns, adverse or unseasonable weather or other interruptions in its operations, trade restrictions or disruptions, the impact of potential global health emergencies such as COVID-19 (coronavirus) pandemic, including potential negative impacts on the global economy, product demand, foreign sourcing and operations generally and other factors which are set forth in the section entitled “Risk Factors” and elsewhere in the Company’s Annual Report on Form 10-K for the May 31, 2019 fiscal year and in all filings with the Commission made subsequent to the filing of the Form 10-K through today’s date and any information that is otherwise provided to investors. Because of the factors described above and the inherent uncertainty of predicting future events, the Company cautions you against relying on forward-looking statements.
SIGNATURE
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: June 18, 2020
ChineseInvestors.com, Inc.
By: /s/ Wei Wang
Name: Wei Wang
Title: Chief Executive Officer
By: /s/ King Fai Leung____________________
Name: King Fai Leung
Title: Chief Financial Officer
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Exhibit 99.1
ChineseInvestors.com, Inc.
Takes Action to Reorganize and Strengthen its Capital Structure
Voluntarily Files for Chapter 11 Reorganization
Los Angeles, CA – June 18, 2020 - ChineseInvestors.com, Inc. (OTCQB:CIIX) (“CIIX” or “the Company”), an established financial news and investment portal, and a leading industrial hemp retailer for the Chinese-speaking community, today announced that it has commenced a voluntary restructuring under Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the Central District of California. The Chapter 11 filing provides immediate protection to the Company, which allows the Company to reorganize its debts during this time of financial strain. The Company will continue to operate in the ordinary course of business as it pursues approval of the restructuring plan.
The Company Continues to Operate as Usual Serving its Clients
"This restructuring is a necessary and positive step forward for the business;“ says CEO Warren Wang. Wang continued, “ChineseInvestors.com, Inc. remains a strong operating company and we are making every effort to ensure that the Company is able to operate as usual throughout this process. We are privileged to serve the global Chinese community and are committed to continuing to provide up-to-date investment news, information and education to our loyal subscribers and top-notch service to our investor relations clients seeking exposure in the Chinese speaking investment community. We are extremely grateful to all of our stakeholders, subscribers, vendors, investors, and employees who have contributed to our legacy, 20 years in the making. We look forward to the continued success long into the future."
Strong Earnings and Revenue Momentum Despite Global Challenges
In the past year the global economy has been affected by geopolitical tensions between the US and China, and the recent COVID-19 pandemic. With offices in both the US and China, the Company felt the effects of both of these challenges. Although the global economy is slowly opening up in recent weeks, during most of 2020, the world’s population was quarantined to their home necessarily. Most Americans will continue to work from home through the end of 2020, or even indefinitely. As a result of the majority of the world being homebound, for many months there has been a significant increase in online investing. With this in mind, the Company’s management pivoted and seized the opportunity for more focused engagement with its audience. This change in the investment environment, coupled with Mr. Wang’s unique ability to engage the Chinese speaking investment community, has led to record subscription revenues in recent months.
Taking Action to Reorganize its Capital Structure
As part of its restructuring plan, the Company has identified more efficient ways to monetize its revenue streams by turning to YouTube and other social media outlets, allowing it to reach a large Chinese audience and generate significant revenues with little to no advertising costs. Moreover, in an effort to stabilize operating cash flow, prior to implementing this digital programming, in 2019, the Company had begun scaling down its labor force significantly for both its cryptocurrency and industrial hemp lines, which in turn led to downsizing the Company’s physical office presence, and to refocus its business and marketing plans.
Reducing the Company’s Current Debt through the Chapter 11 Process will Position the Company for Future Success
Although the Company has made a significant upturn in subscription revenues in the past few months by strategically refocusing its marketing and pursuing cost-cutting measures, after extensive evaluation and consultation with its financial and legal advisors, the Company has determined that reorganizing the Company’s debt structure is essential to its future success. Restructuring through Chapter 11 will enable the Company to reduce its debt and interest expense, while providing increased financial flexibility to support ongoing operations. Although the Company is not at present in a position to repay its outstanding debt, by converting its existing debt to equity, shareholders will be in a position to participate in the continued growth of the public Company as we reorganize, recover and prosper. Going forward, the Company is committed to seeking out more innovative and cost-efficient opportunities to reach its intended audience, grow its customer base and maximize profits.
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First Day Motions
As part of the reorganization process, the Company will file customary "First Day" motions, which should allow it to maintain operations in the ordinary course. Again, the Company intends to continue to provide the same quality news, information, education and investor relations services without interruption; to pay vendors and suppliers under customary terms for services received on or after the filing date, and to pay its employees in the usual manner and to continue their primary benefits without disruption.
About ChineseInvestors.com
Founded in 1999, ChineseInvestors.com endeavors to be an innovative company providing: (a) real-time market commentary, analysis, and educational related services in Chinese language character sets (traditional and simplified); (b) advertising and public relation related support services; and (c) retail, online and direct sales of hemp-based products and other health related products.
For more information, visit www.ChineseInvestors.com.
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Forward-looking Statements
This press release contains “forward-looking statements.” Such statements may be preceded by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. Forward-looking statements are not guarantees of future performance, are based on certain assumptions and are subject to various known and unknown risks and uncertainties, many of which are beyond the Company’s control, and cannot be predicted or quantified and consequently, actual results may differ materially from those expressed or implied by such forward-looking statements.. More detailed information about the Company and the risk factors that may affect the realization of forward-looking statements is set forth in the Company’s filings with the Securities and Exchange Commission (SEC), including the Company’s Annual Report on Form 10-K for the fiscal year ended May 31, 2019 and its Quarterly Reports on Form 10-Q through the third quarter ended February 29, 2020. Investors and security holders are urged to read these documents free of charge on the SEC’s website at http://www.sec.gov. The Company assumes no obligation to publicly update or revise its forward-looking statements as a result of new information, future events or otherwise.
Contact:
ChineseInvestors.com
227 W. Valley Blvd., #208 A
San Gabriel, CA 91776
Investor Relations:
Alan Klitenic
+1-214-636-2548
PR@chinesefn.com
Corporate Communications:
NetworkWire (NNW)
New York, New York
www.NetworkNewsWire.com
+1-212-418-1217 Office
Editor@NetworkWire.com
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