SGTI Shengtai Pharmaceutical Inc (GM)

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

(Mark One)

FORM 10 –K/A

 

Amendment No. 1

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the fiscal year ended June 30, 2011

 

or

 

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from ______________ to __________________

 

Commission file number: 000 - 51312

 

SHENGTAI PHARMACEUTICAL, INC.

(Exact name of registrant as specified in its charter )

Delaware State or other jurisdiction of incorporation or organization

54-2155579 (I.R.S. Employer Identification No.)

 

Changda Road East, Development District, Changle County, Shandong, People’s Republic of China Address of principal executive offices)

262400 (Zip Code)

 

Registrant’s telephone number, including; area code   011 - 86 - 536 - 2188831

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Name of each exchange on which registered

 

Securities registered pursuant to section 12(g) of the Act:

Common Stock par value $0.001

(Title of class)

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.   ¨  Yes   x No

 

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.   ¨  Yes   x No

 

Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange  Act from their obligations under those Sections.

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   x   Yes    ¨ No

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   o  Yes     x No

 

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   ¨   Yes    x No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting companies” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).   ¨   Yes    x No

 

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.

 

Note.— If a determination as to whether a particular person or entity is an affiliate cannot be made without involving unreasonable effort and expense, the aggregate market value of the common stock held by non-affiliates may be calculated on the basis of assumptions reasonable under the circumstances, provided that the assumptions are set forth in this Form.

 

The aggregate market value of the voting and non-voting common equity held by non-affiliates* computed by reference to the price of $2.90 per share of common stock at which the common equity was last sold on December 31, 2010, the last day of our most recently completed second fiscal quarter, as reported on www.yahoo.com was: $14,794,753.

 

* Excludes 5,101,693 shares of common stock held by executive officers, directors and stockholders whose individual ownership exceeds 10% of common stock outstanding on June 30, 2011.

 

Note. —If a determination as to whether a particular person or entity is an affiliate cannot be made without involving unreasonable effort and expense, the aggregate market value of the common stock held by non-affiliates may be calculated on the basis of assumptions reasonable under the circumstances, provided that the assumptions are set forth in this Form.

 

APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.   ¨ Yes   ¨   No

 

(APPLICABLE ONLY TO CORPORATE REGISTRANTS)

 

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

 

There were 9,584,912 shares of Common Stock, par value $0.001, issued and outstanding as of September 27, 2011.

 

DOCUMENTS INCORPORATED BY REFERENCE

 

None.

 

 

TABLE OF CONTENTS  

 

E XPLANATORY NOTE
PART III
Item 11.		Executive Compensation	1
		Compensation Discussion and Analysis	1
		Compensation Committee Report
		Compensation Risk Assessment
		Compensation Tables
PART IV
Item 15.		Exhibits, Financial Statement Schedules	5
INDEX TO EXHIBITS			7

 

 

EXPLANATORY NOTE TO 10K/A

 

The purposes of this Amendment No. 1 to the Annual Report on Form 10K/A for the fiscal year ended June 30, 2011 (the “Report”) of Shengtai Pharmaceuticals, Inc., a Nevada corporation (the “Company”), which was originally filed with the Securities and Exchange Commission (the “SEC”) on October 7, 2011 (the “Original Filing”), to: (1) amend Part III, Item 11 to revise the Summary Compensation Table and include disclosures on the decrease of base salaries of Mr. Qingtai Liu and Mr. Yongqiang Wang, and (2) update the Exhibit Index and file Exhibits 10.8 and 10.9. All other information contained in the Report remains unchanged.

 

Except for the amendments described above, the information in this Amendment No. 1 has not been updated to reflect events that occurred after October 7, 2011, the filing date of the Original Filing. Accordingly, this Amendment No.1 should be read in conjunction with our filings made with the SEC subsequent to the filing of the Original Filing, including any amendments to those filings.

 

 

PART III

 

 

Item 11.  Executive Compensation

 

Compensation Discussion and Analysis

 

We endeavor to provide our “named executive officers,” as defined in Item 402 of Regulation S-K, with a competitive base salary that is in- line with their roles and responsibilities when compared to peer companies of comparable size in the same or similar locality.

 

It is not uncommon for PRC private corporations in that locality to have base salaries as the sole and only form of compensation. The base salary level is established and reviewed based on the level of responsibilities, the experience and tenure of the individual and the current and potential contributions of the individual. The base salary is compared to the list of similar positions within comparable peer companies and with consideration of the executive’s relative experience in his or her position. Base salaries are reviewed periodically and at the time of promotion or other changes in responsibilities.

 

We plan to implement a more comprehensive compensation program, which takes into account other elements of compensation, including without limitation, short and long term compensation, cash and non-cash, and other equity-based compensation such as stock options. This compensation program shall be comparative to our peers in the industry and aimed to retain and attract talented individuals.

 

We have formed a Compensation Committee of the Board of Directors comprised solely of independent directors to oversee the compensation of our named executive officers. The members of our Compensation Committee are Fei He (Chairman), Yaojun Liu and Winfred Lee.  The Board has determined that all members of the compensation committee are independent directors under the rules of the Nasdaq Stock Market or NYSE Amex, as applicable. The compensation committee administers the Company’s benefit plans, reviews and administers all compensation arrangements for executive officers, and establishes and reviews general policies relating to the compensation and benefits of our officers and employees. The compensation committee operates under a written charter that is made available on the website mentioned above.

 

Summary Compensation Table

 

The following table sets forth information with respect to the compensation of each of the named executive officers for services provided in all capacities to the Company in the fiscal years ended June 30, 2011 and 2010 in their capacity as such officers.  No other executive officer or former executive officer received more than $100,000 in compensation in the fiscal years reported below.

 

 

Name and Principal Position		Fiscal Year				Salary ($)				Bonus ($)				Stock Awards ($)				Option Awards ($)				Non-equity Incentive Plan Compensation ($)				Change in Pension Value and Nonqualified Deferred Compensation Earnings ($)				All Other Compensation ($)				Total ($)
Qintai Liu			2011				18,564				—				—				—				—				—				—				18,564
Chairman & Chief
Executive			2010				107,676				—				—				—				—				—				—				107,676
Officer
Hu Ye
Chief			2011				36,976				—				—				35,206				—				—				—				72,182
Financial
Officer (1)			2010				48,831				—				—				46,303				—				—				—				95,134
Yongqiang Wang
Chief			2011				13,923				—				—								—				—				—				13,923
Financial
Officer (2)			2010				68,521				—				—				—				—				—				—				68,521

 

(1)	Mr. Hu Ye resigned as our Chief Financial Officer on December 1, 2010.
(2)	Mr. Yongqiang Wang was appointed as Chief Financial Officer on December 1, 2010.

 

In 2011 fiscal year, the base salaries of Messrs. Liu and Wang were decreased to provide additional cash flow for the Company so that it could lock in lower prices of raw materials due to inflation in China. Messrs. Liu and Wang agreed to reduce their salaries to $18,564 and $13,923, respectively, for fiscal year 2011 and executed addendums to their Employment Agreements to this effect (“2011 Addendums”).

 

In the Chief Financial Officer Employment Agreement entered into on March 1, 2010 between the Company and Mr. Hu Ye, the Chief Financial Officer, the Company granted Mr. Hu Ye an option to purchase 150,000 shares of common stock of the Company. The shares vest over 3 years starting March 1, 2010 and terminate on the third anniversary of the date of issuance of this option. The Company valued the shares at $5.20 per share, which represents 130 % of the fair market value being calculated in the private placement price on May 15, 2007. The fair values of stock options granted to the Chief Financial Officer were estimated at the date of grant with the following assumptions:

 

Weighted average risk-free interest rate			2.79	%
Expected term			3 years
Expected volatility			133	%
Expected dividend yield			0	%
Weighted average grant-date fair value per option		$	3.00

 

Grants of Plan-Based Awards in Fiscal 2008

 

On January 4, 2008, the Company adopted “Shengtai Pharmaceutical, Inc. 2007 Stock Incentive Plan,” the “Stock Incentive Plan.”

 

In 2008, the Company granted 250,000 stock options and 80,000 non-qualified stock options pursuant to the Stock Incentive Plan. All options have an exercise price of $6.60, which is the closing price on the date of grant, and expire five years after the date of grant. All options vest over a period of three years from the date of grant.

 

Outstanding Equity Awards at 2011 Fiscal Year End

 

As of June 30, 2011, there are 255,000 shares of options outstanding.

 

 

Outstanding Equity Awards at June 30, 2011

 

Name		Option awards																		Stock awards
		Number of securities underlying unexercised options (#) exercisable				Number of securities underlying unexercised options (#) unexercisable				Equity incentive plan awards: Number of securities underlying unexercised unearned options (#)				Option exercise  price ($)				Option expiration date		Number of shares or units of stock that have not vested (#)				Market value of shares of units of stock that have not vested ($)				Equity incentive plan awards: Number of unearned shares, units or other rights that have not vested (#)				Equity incentive plan awards: Market or payout value of unearned shares, units or other rights that have not vested ($)
Qintai Liu			100,000				-				100,000				6.60			January 8, 2011			-				-				-				-
Yongqiang Wang			10,000				-				10,000				6.60			January 8, 2011			-				-				-				-

 

Option Exercises and Stock Vested in Fiscal 2011.

 

There were no options exercised and no stock vested in 2011.

 

Employment Agreements

 

We have employment agreements with Qingtai Liu, our chief executive officer, and with Yongqiang Wang , our Chief Financial Officer.

 

Compensation of Directors.

 

Our current non-executive directors are compensated for all services they perform as directors, including attendance at Board of Directors meetings and service as members of committees of the Board of Directors to which they are appointed. Executive officers are not compensated for services they perform as directors of the Company.

 

The details of such compensation are:

 

	•	Annual compensation of $22,500 to $30,000; and
	•	we may also grant the non-executive directors certain options to purchase our shares, the amount and terms of which shall be determined by the Board of Directors.

 

The non-executive directors are also reimbursed for all of their out-of-pocket expenses in traveling to and attending meetings of the Board of Directors and committees on which they would serve.

 

The following table sets forth a summary of compensation paid to our directors who are not listed in the Summary Compensation Table during the fiscal year ended June 30, 2011

 

 

Name		Fees earned or paid in cash ($)				Stock awards ($)				Option awards ($)				Non-equity incentive plan compensation ($)				Nonqualified deferred compensation earnings ($)				All other compensation ($)				Total ($)
Winfred Lee (1)			22,500				-				9,625								-				-				32,125
Yaojun Liu (2)			30,000								27,602																57,602
Fei He (3)			30,000								27,602																57,602

 

	(1)	Mr. Lee was granted 10,000 shares of stock options to purchase our shares.
	(2)	Mr. Liu was granted 40,000 shares of stock options to purchase our shares.
	(3)	Mr. He was granted 40,000 shares of stock options to purchase our shares.  Mr. He resigned from his position as director on August 20, 2011 and all of his options were forfeited.

 

 

PART IV

 

Item 15. Exhibits, Financial Statement Schedules

 

(b)

Exhibits

 

See Exhibit Index

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacity and on the date indicated.

 

	SHENGTAI PHARMACEUTICAL, INC.
	(Registrant)
Date: April 9, 2012	By:	/s/ Qingtai Liu
		Qingtai Liu
		Chief Executive Officer
		(Principal Executive Officer)

 

	By:	/s/ Yongqiang Wang
		Yongqiang Wang
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

 

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

 

Signature		Title		Date
/s/ Qingtai Liu		Chief Executive Officer (Principal Executive Officer) and Director		April 9, 2012
Qingtai Liu
/s/ Yongqiang Wang		Chief Financial Officer (Principal Financial Officer, Principal Accounting Officer), and Director		April 9, 2012
Yongqiang Wang
/s/ Yaojun Liu		Director		April 9, 2012
Yaojun Liu
/s/ Tao Jin		Director		April 9, 2012
Tao Jin
/s/ Lawrence Lee		Director		April 9, 2012
Lawrence Lee

  

 

EXHIBIT INDEX

 

Exhibit No.		Description
3.1		Amended and Restated Certificate of Incorporation as filed with the Secretary of State of the State of Delaware on March 10, 2004, as amended to date (incorporated by reference to Exhibit 3.1 to the registrant’s Form 10-SB filed on September 26, 2005 in commission file number 000-51312).
3.2		Certificate of Amendment filed with Secretary of State of Delaware on November 9, 2010 (incorporated by reference to Exhibit 99.1 to the registrant's Form 8-K filed on November 12, 2010).
3.3		Bylaws of the registrant (incorporated by reference to Exhibit 3.2 to the registrant’s Form 10-SB filed on September 26, 2005 in commission file number 000-51312).
4.1		Form of Warrants to Investors (incorporated by reference to Exhibit 4.1 to the registrant’s Form 8-K filed on May 21, 2007 in commission file number 000-51312) .
10.1		Share Exchange Agreement dated May 15, 2007 by and among the Company and Shengtai Holding, Inc. (incorporated by reference to Exhibit 10.1 to the registrant’s Form 8-K filed on May 21, 2007 in commission file number 000-51312).
10.2		Share Purchase Agreement dated as of May 15, 2007 between the Company and the Purchasers (incorporated by reference to Exhibit 10.2 to the registrant’s Form 8-K filed on May 21, 2007 in commission file number 000-51312).
10.3		Research and Development Agreement between Hebei University and Technology of the Company, dated December 8, 2010. (incorporated by reference to Exhibit 10.3 to the registrant’s Form 10-K filed on October 6, 2011 in commission file number 000-51312).
10.4		Employment Agreement between the Company and Qingtai Liu, dated July 8 th , 2009 (incorporated by reference to Exhibit 10.4 to the registrant’s Form 10-K filed on October 6, 2011 in commission file number 000-51312).
10.5		Employment Agreement between the Company and Yongqiang Wang, dated September 1 st , 2009 (incorporated by reference to Exhibit 10.3 to the registrant’s Form 10-K/A filed on April 9, 2012 in commission file number 000-51312).
10.6		2010 Addendum between the Company and Qingtai Liu, dated June 30, 2010 (incorporated by reference to Exhibit 10.3 to the registrant’s Form 10-K/A filed on April 9, 2012 in commission file number 000-51312).
10.7		2010 Addendum between the Company and Yongqiang Wang, dated June 30, 2010 (incorporated by reference to Exhibit 10.3 to the registrant’s Form 10-K/A filed on April 9, 2012 in commission file number 000-51312).
10.8		2011 Addendum between the Company and Qingtai Liu, dated June 30, 2011*
10.9		2011 Addendum between the Company and Yongqiang Wang, dated June 30, 2011*
16.1		Letter dated October 20, 2009 from Moore Stephens Wurth Frazer and Torbet, LLP (incorporated by reference to Exhibit 16.1 to the registrant’s Form 8-K filed on October 21, 2009 in commission file number 000-51312).
21.1		List of subsidiaries of the registrant (incorporated by reference to Exhibit 21.1 to the registrant’s Form 8-K filed on May 21, 2007 in commission file number 000-51312).
31.1		Certification of the Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2		Certification of the Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1		Certification of the Chief Executive Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2		Certification of the Chief Financial Officer pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

 

* filed herewith