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
December 29, 2005
Date of Report (Date of earliest event reported)
China Digital Wireless, Inc.
(Exact name of registrant as specified in its charter)
Nevada 333-120431 90-0093373
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
429 Guangdong Road
Shanghai, China 200001
(Address of Principal Executive Offices and Zip Code)
(011) 86-21-6336-8686
(Registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if changed since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy 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))
Item 1.01 Entry into a Material Definitive Agreement
On December 29, 2005, Shanghai TCH Data Science & Technology Co. Ltd ("TCH"), a
wholly-owned subsidiary of China Digital Wireless, Inc. (the "Company"), entered
into a series of agreements to purchase (i) 95% of the equity interests of
Shanghai Kena Energy Saving Electric Co Ltd ("Kena") for an aggregate purchase
price of RMB 28,500,000; (ii) a related patent from one of the stockholders of
Kena for RMB 11,000,000; and (iii) related rights to make a patent application
from one of the stockholders of Kena for RMB 11,000,000. On February 10, 2006,
these agreements were amended to impose an additional condition on Zhang Naiyao,
the transferor of the patent and the right to make the patent application, that
if he fails to provide the necessary technical assistance services to enable TCH
to use the patented technology in producing products on a large scale that meet
the standards set by TCH within one year, TCH shall have the right to demand for
the return of the relevant payment received by him in full and to terminate the
agreement for the assignment of the patent and the right to apply for
registration of the patent. The amendments also set forth the arrangement for
payment of purchase price between TCH and Shanghai Sifang Co. Ltd ("Sifang").
The purchase price for both the equity interests in Kena and the consideration
for purchase of the patent and the right to apply for registration of the patent
shall be paid by Sifang on behalf of TCH. Sifang is an affiliate of the Company
in that Sifang's stockholders are also stockholders of the Company. According to
the amended agreements, the amount of the purchase consideration paid by Sifang
on behalf of TCH will be applied to offset the trade receivables owed to TCH by
Sifang. English summaries of the agreements, as amended, are attached hereto as
exhibits and incorporated herein.
Kena was established on April 26, 2005, by American Electronics Science and
Technology, SCT Holdings Electrical PTE Ltd and Tianci Group of China. It
specializes in the research, development and manufacture of energy-saving
products, as well as illumination projects in China. The patent and patent
application mentioned above relate to a "three phase transformer" which is used
in connection with a power supply system and utilizes technology that allows
manufacturers to produce transformers with high energy transfer efficiency at a
low costs. This technology is expected to be available for mass production
within one year.
The transactions are subject to regulatory approval in The People's Republic of
China.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
The exhibits listed below, which are filed with this report on Form 8-K, are
English summaries of the documents indicated, which were originally prepared and
executed in Chinese.
Exhibit No. Description
----------- -----------
10.1 English Summary of the Equity Transfer Termsheet.
2
10.2 English Summary of the Agreement relating to the assignment of
debt under the Equity Transfer Agreement.
10.3 English Summary of an Agreement relating to transfer of patent
ownership.
10.4 English Summary of an Agreement relating to transfer of right
to make patent application.
10.5 English Summary of an Agreement in relation to assignment of
debt under the Agreements for the transfer of patent rights.
3
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
CHINA DIGITAL WIRELESS, INC.
By /s/ Tai Caihua
-----------------------------------
Tai Caihua
President and Chairman of the Board
Dated: February 15, 2006
4