AIXN AiXin Life International Inc (QB)

Item 1.01 Entry into a Material Definitive Agreement.

On June 2, 2021, Aixin Life International, Inc. (“we”, “us” or the “Company”), entered into an Equity Transfer Agreement (the “Transfer Agreement”) with Quanzhong Lin, the Chairman and President of our Company and the holder of a majority of the shares of our outstanding common stock, Ting Li and Xiao Ling. Pursuant to the Transfer Agreement, we have agreed to purchase Chengdu Aixin Pharmacy Co., Ltd. and certain affiliated entities, each of which operates a pharmacy. Consummation of the acquisition is subject to the satisfaction or waiver of certain conditions, including the approval of the independent members of our Board of Directors which was obtained at a meeting held on May 28, 2021.

Under the terms of the Transfer Agreement, we have agreed to purchase all of the outstanding equity of nine entities (the “Pharmacy Cos”), each of which is the owner and operator of a pharmacy located in Chengdu for an aggregate purchase price of RMB 34,635,845 or US$5,308,257 based on an exchange rate of RMB/ US$ 6.5249 yuan per dollar on December 31, 2020. The purchase price will be reduced by an amount equal to any amounts paid or distributed by any of the Pharmacy Cos to Mr. Lin or Ting Li and Xiao Ling after December 31, 2020 and increased by an amount equal to any monies they contributed to any of the Pharmacy Cos after such date. Mr. Lin owns in excess of 95% of the outstanding equity the Pharmacy Cos. The balance is owned by Ting Li and Xiao Ling.

The names of the Pharmacy Cos to be acquired and the location of each pharmacy are follows:

The first of the nine pharmacies was established in 2016. Each of the pharmacies engages in the retail sale of pharmaceuticals; sales of pre-packaged food and bulk food, health food, dairy products, cosmetics, electronic products, disinfecting supplies, class-I, and class-II medical equipment and the staff at each pharmacy consults with customers regarding common nutrition and health issues, though they are not licensed to make a diagnosis and when appropriate refer customers to a physician.

We received an appraisal from Zhengyuanzin Real Estate Land and Assets Appraisal Co., Ltd. which valued the Pharmacy Cos as of the end of November 30, 2020, at an aggregate amount equal to the purchase price. In reaching a purchase price for the pharmacies, the parties focused on the annual revenues of each pharmacy which is the metric used for private transfers of pharmacies in China. For the twelve months ended November 30, 2020, the aggregate annual operating revenues of the nine pharmacies were RMB 8,328,992. Due to the impact of Covid-19, this included revenues of RMB 5,154,039.60 from the sales of masks. The parties agreed these were extraordinary revenues and the purchase price was based upon normalized annual revenues of RMB 3,463,584 to determine the purchase price of RMB 34,635,845.

The Transfer Agreement contains customary representations, warranties, and covenants of the parties and post-closing indemnities. The representations and warranties set forth in the Agreement generally survive for 18 months following the closing.

The Company expects the closing of the acquisition to occur no later than July 1, 2021.

A copy of the Transfer Agreement is attached as an exhibit to this report on Form 8-K. The foregoing description of the Transfer Agreement does not purport to be complete and is qualified in its entirety by reference to the Transfer Agreement.