KBS Fashion Group Limited a leading fully-integrated casual menswear company in China, announced today that its Board of Directors approved a Binding Memorandum of Understanding regarding an exempt private offering of convertible preferred stock in the amount of up to $1,500,000 to a single investor. Under the MOU, the investor will purchase up to 100,000 shares of convertible preferred stock at a price of $15 per share. Each share of preferred stock will be convertible to shares of our common stock at a ratio of 15 shares of common stock for each share of preferred stock. All shares of common stock issuable upon conversion of the preferred stock will be subject to a two-year lock-up agreement running from the initial closing of the financing. Conversions will be limited such that the investor may not effect a conversion of the preferred stock to the extent that, immediately after such conversion, the investor would be the beneficial owner of more than 9.99% of our issued and outstanding common stock.

Formal documentation of the proposed private offering is pending and the offering is expected to close in the near future.

The proceeds are intended to be used by Flower Crown Holding (“FCH”), a fully owned subsidiary of KBSF, for its continuing business expansion. FCH is the owner of Luxventure, a social media platform launched in July of 2020 offering cross border merchandise through online and off-line channels and luxury tourism experiences to its members. Luxventure has entered into cooperation agreements with over 15 major corporations such as CITIC International Travel (Guangdong) Co., Ltd, Hangzhou Youzan Technology Co., Ltd. and Beijing Space Transformation Technology Co., Ltd, a subsidiary of Bytedance.

As one of the very few companies in China with the licenses to source, distribute and sale of cross border luxury merchandise, Luxventure offers its members a significant discount to its competitors’ price. In January of 2021, Luxventure formed a strategic partnership with a subsidiary of Hainan Strait Shipping Co., Ltd (“HSS”), which operates 45 cruise vessels in Hainan Island, for self-owned stores. For the year 2021, those cruise vessels are expected to have over 20,000,000 visitors. In January of 2021, Luxventure recruited Mr. Liu Ze, an expert in Artificial Intelligence and Blockchain, for its e-commerce portal.

Ms. Sun Lei, Chief Executive Officer of the Company commented: “We are proud of what Luxventure had accomplished in a short time. International travel restriction has increased demand for domestic travel and crossed border mechandise. Chinese consumers have flocked to Hainan Island to take advantage of its COVID-19 free environment and duty-free shopping. Sales of crossed border merchandise in China is one of the very few areas which had minimal impact by COVID-19. Given China’s designation of Hainan Island as a free port and Luxventure’s strong competitive advantage, this investment would allow it to further expand into this business.”

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, nor may there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

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