Cellular Biomedicine Group Inc (CBMG)

[gamood]

Form 8-K for COMPASS ACQUISITION CORP

28-May-2010

Changes in Control or Registrant, Completion of Acquisition or Dispositi


ITEM 1. CHANGES IN CONTROL OF REGISTRANT.

Share Exchange Agreement.
(a) Effective May 24, 2010, Compass Acquisition Corporation ("Compass") and its controlling shareholders entered into a share exchange agreement with Tsing Da Century Education Technology Co. Ltd., a British Virgin Islands business company ("Tsingda Technology") and its shareholders. Pursuant to the agreement, all of the shareholders of Tsingda Technology exchanged their shares for a total of 244,022.78 preferred shares of Compass. Each preferred share has identical rights as 100 ordinary shares except that each preferred share is convertible to 100 ordinary shares. The conversion will occur concurrent with the approval by the Compass shareholders of an increase of its authorized ordinary shares to 100,000,000, however, it will not be subject to the proposed 3 for 1 consolidation of its ordinary shares referenced in the following sentence. Compass expects to seek a shareholder vote to increase its ordinary shares to 100,000,000, consolidate its outstanding ordinary shares on a 3 for 1 basis, and change its name to Tsingda eEDU Corporation within the next 45 to 60 days. As a result of the transaction, Tsingda Technology became a wholly owned subsidiary of Compass.

In addition, pursuant to the transaction, Mr. Karl Brenza resigned as President and Chief Executive Officer of Compass, and Mr. Zhang Hui was appointed Chairman, President, and a Director of Compass, Liu Juntao was appointed Executive Vice President of the Compass, and Kang Chungmai was appointed Chief Financial Officer, and Secretary of Compass. Mr. Joseph Rozelle has agreed to resign as a member of the Board ten days following such time as the Company files and mails an Information Statement required by Rule 14f-1 regarding a change in the majority of the Board. The Compass filed and mailed the Information Statement required by Rule 14f-1 on or about June 1, 2010.

The share exchange agreement was adopted by the unanimous consent of the Board of Directors of both Compass and Tsingda Technology. All of the shareholders of Tsingda Technology were signatories to the agreement.

Tsingda Technology owns 100% of the issued and outstanding capital stock of Beijing Tsingda Century Management Consulting Ltd. ("Tsingda Management"), a wholly foreign owned enterprise incorporated under the laws of the People's Republic of China ("PRC"). On April 26, 2010, Tsingda Management entered into a series of contractual agreements with Beijing Tsingda Century Investment Consultant of Education Co. Ltd ("Tsingda Education"), a company incorporated under the laws of the PRC, and its shareholders, in which Tsingda Management assumed management of the business activities of Tsingda Education and has the right to appoint all executives and senior management and the members of the board of directors.

Immediately prior to the share exchange, the Company had authorized 39,062,500 ordinary shares, $.000128 par value of which 3,743,531 were issued and outstanding, and 781,250 preferred shares, $.000128 par value, of which no shares were outstanding. In connection with the share exchange, the Company issued 244,022.78 preferred shares to the Tsingda shareholders. Concurrent with the share exchange, we also issued 6,239,220 ordinary shares to a consultant pursuant to agreement with Compass. Upon effectiveness of the share exchange, the Company had 9,982,749 ordinary shares and 244,022.78 preferred shares outstanding. Each preferred share has identical rights as 100 ordinary shares except that each preferred share is convertible to 100 ordinary shares upon the approval by the Company's shareholders of the increase of its authorized ordinary shares from 39,062,500 to 100,000,000. The ordinary shares received upon conversion of the preferred shares will not be subject to the proposed 3 for 1 consolidation discussed above.

Unless the context indicates otherwise, any reference herein to "Tsingda" shall mean Tsingda Technology, Tsingda Management, and Tsingda Education.



ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS

As described in Item 1.01 above, on May 24, 2010, Compass acquired Tsingda, a provider of on-line and off-line educational services in the Peoples Republic of China.

Prior to the Tsingda transaction, the Company was a "shell company" (as such term is defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")). Accordingly, pursuant to the requirements of Item 2.01(a)(f) of Form 8-K, set forth below is the information that would be required if the Company were filing a general form for registration of securities on Form 10 under the Exchange Act giving effect to the Tsingda transaction.

BUSINESS OF TSINGDA

General

Unless the context indicates otherwise, any reference herein to "Tsingda" shall mean Tsingda Technology, Tsingda Management, and Tsingda Education, and the Company shall include Compass and Tsingda. All amounts are in US Dollars, unless indicated otherwise.

Tsingda Education was founded on October 24, 2003 in the Peoples Republic of China (PRC) and its actual operations commenced in 2006. The company is a leading on-line and off-line provider of educational services throughout PRC. It has established the largest chain of education centers, known as "Tsingda Learning Centers." As of the date of this report, it has approximately 1,800 learning centers nationwide. Tsingda Education focus is directed towards students ranging from generally six to eighteen years old. Off-line services are comprised of company owned locations as well as franchised learning centers. On-line educational services are a web based platform offering services similar to its learning centers.

Tsingda Education has received the following awards reflecting its strength and position in China education industry, stated as follows:
? Twice awarded "China Top-10 Brand of Education Chain" (2008 and 2009). ? "China Top-10 Institute for Online Education" in 2009. ? "The Most Valuable Education Chain for Investment" in 2009. ? "Most Trustworthy Institute for Supplementary Education" in 2009.

Tsingda Education's fiscal 2009 revenues increased approximately 101% from the prior year and pre-tax net income increased by approximately 79% from the prior year.

2009 2008
Revenue $ 14,629,667 $ 7,246,906
Expenses
Selling 3,875,404 1,511,841
General and administrative 3,741,229 1,753,361
7,616,633 3,265,202
Operating Income 7,013,034 3,981,704

Other Income (Expenses)
Other income 80,973 1,064
Other expenses (19,638 ) (1,956 )
Financial expense - (34,439 )
Total other income (expense) 61,335 (35,331 )
Income Before Income Taxes 7,074,369 3,946,373


Organization & Subsidiaries

Tsingda's organization was structured to abide by the laws of the PRC. Its structure is depicted below:

[[Image Removed]]

Compass was organized under the laws of the Cayman Islands on September 27, 2006. Tsingda Technology was organized under the laws of British Virgin Islands on December 11, 2009. Tsingda Management was organized under the laws of the Peoples Republic of China (PRC) on November 26, 2007. Tsingda Education was organized under the laws of the PRC on October 23, 2003.

Tsingda Technology owns 100% of the issued and outstanding capital stock of Tsingda Management. On April 26, 2010, Tsingda Management entered into a series of contractual agreements with Tsingda Education, and its shareholders, in which Tsingda Management effectively assumed management of the business activities of Tsingda Education and has the right to appoint all executives and senior management and the members of the board of directors of Tsingda Education Juice. The contractual arrangements are comprised of a series of agreements, including a Consulting Services Agreement, Operating Agreement, Voting Rights Proxy . . .


ITEM 3.02 UNREGISTERED SALES OF EQUITY SECURITIES.

Pursuant to the transaction, on May 24, 2010, we issued 244,022.78 preferred shares of Compass to the Tsingda shareholders in exchange for 100% of the outstanding shares of Tsingda Technology. In addition, we issued 6,239,220 ordinary shares to Eastbridge Investment Group Corporation pursuant to a consulting agreement between Compass and Eastbridge. Such securities were not registered under the Securities Act. These securities qualified for exemption under Section 4(2) of the Securities Act and the rules and regulations promulgated thereunder, including Regulation S. The offering was not a "public offering" as defined in Section 4(2) due to the insubstantial number of persons involved in the offering, manner of the offering and number of securities offered. These shareholders made certain representations and warranties, including their investment intent and that they were not US Persons as defined in Rule 902(k) of Regulation S as required by Section 4(2) and the rules and regulations promulgated thereunder, including Regulation S. They also agreed to and received share certificates bearing a legend stating that such securities are restricted pursuant to Rule 144 and Regulation S of the Securities Act. These restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a "public offering." It is the Company's position that the transaction met the requirements to qualify for exemption under Section 4(2) and the rules and regulations promulgated thereunder, including Regulation S of the Securities Act.

ITEM 5.01 CHANGES IN CONTROL OF REGISTRANT.

As explained more fully in Item 2.01, in connection with the Tsingda transaction, on May 24, 2010, Compass issued 244,022.78 preferred shares to the shareholders of Tsingda Technology. Each preferred share has identical rights as 100 ordinary shares except that each preferred share is convertible to 100 ordinary shares. After giving effect to the conversion rights, the Tsingda shareholders will own approximately 88% of the ordinary shares of the Company.

In connection with the Tsingda transaction, and as explained more fully in the above Item 2.01 under the section titled "Management" and below in Item 5.02 of this Current Report on Form 8-K, Mr. Karl Brenza resigned as Chief Executive Officer and President of the Company, and Mr. Hui Zhang was appointed Chairman of the Board of Directors, Chief Executive Officer and President of the Company. Joseph Rozelle resigned from his position as a director of the Company upon effectiveness of an information statement required by Rule 14f-1 promulgated under the Exchange Act. Further, in connection with the resignation of Joseph Rozelle, Mr. Liu Juntao and Mr. Kang Chungmai have been appointed as new directors of the Company upon effectiveness of the stated information statement.



ITEM 5.02 DEPARTURE OF DIRECTORS OR PRINCIPAL OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF PRINCIPAL OFFICERS.

(a) Resignation of Directors

Subject to the effectiveness of an information statement required by Rule 14f-1 promulgated under the Exchange Act, Joseph Rozelle resigned as members of our board of directors. There were no disagreements between Mr. Rozelle and us or any officer or director of the Company.

(b) Resignation of Officers

On May 24, 2010, Karl Brenza resigned as our President and Chief Executive Officer.

(c) Appointment of Directors and Officers

The names of our current officers and directors and the incoming directors, as well as certain information about them, are set forth below:

NAME AGE POSITION
Zhang Hui 44 Chairman of the Board of Directors, Chief
Executive Officer and President
Liu Juntao 48 Executive Vice President and Director (1)
Kang Chungmai 40 Secretary, Chief Financial Officer and Director
(1)
Joseph Rozelle 35 Director (2)


(1) Will become a director on the 10th day following the mailing of an information statement required by Rule 14f-1 promulgated under the Exchange Act which is expected to be on or about June 11, 2010.
(2) Current director until resignation which is expected to be on or about June 11, 2010.

Zhang Hui established Tsingda Century in 2003, and has been the company's chairman, chief executive officer since its inception. From 1999 to 2003, he was vice president of Singapore Holding Group, during when he has integrated management methods and cultural diversity under different background efficiently, and then setting up a new branch for Singapore Holding Group-Holding Technology (Shenzhen) Co., Ltd. From 1995 to 1999, Mr. Zhang worked as the newsroom director and vice chief editor of China technology information magazine, successfully hatching the publication of the best choice of Chinese excellently expertise, Chinese diathesis education, Chinese innovation education and China education research. He graduated from Wuhan University of Technology in 1989.

Liu Juntao has been the executive vice-president in Tsingda since its inception. Prior to his employ with Tsingda, he experienced over 10 years of administrative work for government. He also spent 5 years in private industry in the PRC where worked in product development, market exploiting and customer service. Mr. Liu graduated from Huazhong Agriculture University in 1983.

Kang Chungmai has been the chief financial officer and secretary of Tsingda since Jan. 2010. From 2004 to 2007, he worked as managing director in Zero2IPO Group in Beijing a financial consulting firm. From 1999 to 2002, he served as CFO in Optoma Electronics, the largest TFT-LCD backlight and DLP projector producer in the world. From 1996 to 1999, he served as financial manager in Far Eastern Department Stores, the largest chain of department stores in the Greater China Region based in Taipei. He had broad experiences in general financial management, debt and equity financing, foreign exchange hedging, offshore holding structure design, and investment evaluation. Mr. Kang holds his master degree in International Finance from the University of Westminster, London, UK in 1996. He also expects to receive the PhD degree in Management from the University of Edinburgh, Edinburgh, Scotland in 2010.

Joseph Rozelle has been one of our directors since April 2006 and served as our President and Chief Financial Officer from September 2006 until May 20, 2010. Immediately prior to the execution of the Share Exchange Agreement, Mr. Rozelle resigned from all offices he held with us. Mr. Rozelle also submitted his resignation as a member of our Board of Directors, which will become effective on the Effective Date. Mr. Rozelle is currently the President of Nautilus Global Partners, LLC, a company dedicated to facilitation of "going public" transactions for foreign and domestic operating companies on the public United States Exchanges. Prior to joining Nautilus Global Partners, LLC in 2006, Mr. Rozelle was a consultant with Accretive Solutions, providing Sarbanes-Oxley Compliance consulting and other accounting related consulting services. During his career he has served in several companies in positions where he worked in financial modeling, due diligence, preparation of investment summaries, asset securitization, planning and financial analysis, risk analysis, mergers and acquisition evaluation, corporate budgeting, commercial banking, auditing, and SEC filings involving corporate mergers, spin-offs, public debt offerings, and annual reports. Mr. Rozelle holds a Bachelors of Business Administration degree from the University of Houston and a Masters of Business Administration degree from the Jesse H. Jones School of Management at Rice University. Mr. Rozelle is also the sole director and sole executive officer of VPGI, Inc., a public corporation.

Except as noted above, there are no agreements or understandings for any of our executive officers or directors to resign at the request of another person and no officer or director is acting on behalf of nor will any of them act at the direction of any other person.

. . .


ITEM 5.06 CHANGE IN SHELL COMPANY STATUS

As explained more fully in Item 2.01 above, we were a "shell company" (as such term is defined in Rule 12b-2 under the Exchange Act) immediately before Tsingda transaction. As a result of the Tsingda transaction, Tsingda Management became our wholly owned subsidiary and became our main operational business. Consequently, we believe that the Combination has caused us to cease to be a shell company. For information about the Combination, please see the information set forth above under Item 2.01 of this Current Report on Form 8-K which information is incorporated herein by reference.

http://biz.yahoo.com/e/100528/13817908-k.html