10/2007 Vision Capital invested US$21.5 Million in YSYB!
{ NOBODY KNEW (THEN) THE GREAT RECESSION WOULD CLIFF ALL WORLDWIDE INTO A TROUGH. }
All ( Now Expired ) Warrants A to F: @ $2.75, $3.50, $2.37, $3.03, $3.85, $2.58, $3.01 !!
((( "The Group had a credit line facility up to $25.04 million (equivalent to RMB 159 million) with Agricultural Development Bank of China in 2012." )))
*** AND YSYB HAS SUBSTANTIALLY EXPANDED & GROWN SINCE!!! ***
Heilongjiang Yanglin Soybean Group, established in 1996, has become the biggest ( so called 'privately owned' public enterprise; apart from state run ) cooking oil group in not only Heilongjiang Province, but in the national market as well as worldwide.
Yanglin Soybean Group has ten ( 10 ) subsidiaries with over 2,000 employees involved in grain marketing, world class non-transgenic ( NON-GMO ) soybean & rice processing, agricultural research, livestock, poultry, & fish aquaculture breeding, hotel services, tourism resorts, & logistics services. Yanglin has received "China Top Brand" recognition, organic food certifications, NON-GMO Green certifications, & a host of dozens more enabling sales to Europe. They sell throughout China, as well as exporting to Japan, South Korea, Russia, Indonesia, Europe & many other neighboring countries. The five ( 5 ) existing soybean processing production lines now have been expanded above an annual capacity of over two ( 2 ) million tons of soybeans; while the world class refined rice production line annually processing over 50,000 tons of speciality rice. Yanglin Soybeans is the world's largest NON-GMO processor in the world, & not a China government "SOE" - 'state-owned-enterprise', but a public corporation listed as YSYB. The very successful organizational structure of this company places the CEO at the top, followed by the top management team ( the directors of finance, Human Resources, information technology, administration & business development ), & then about 50 middle-level managers in these departments ) all of who work in the headquarters of Yanglin Group; now a fast growing conglomerate of subsidiaries rising more quickly with expansion growth.
Quoted from 10K page 68:
"The following warrants expired on October 3, 2012,:(i) Series A Warrants to purchase an aggregate of 10,000,000 shares of Common Stock at $2.75 per share, (ii) Series B Warrants to purchase an aggregate of 5,000,000 shares of Common Stock at $3.50 per share, (iii) Series E Warrants to purchase 1,000,000 shares of Common Stock at $2.58 per share and (iv) Series F Warrants to purchase 500,000 shares of Common Stock at $3.01 per share."
Quoted from 10K page 96:
"The Group had a credit line facility up to $25.04 million (equivalent to RMB 159 million) with Agricultural Development Bank of China in 2012."
Quoted from 10K page 99:
"In connection with the sale of the Series A Convertible Preferred Stock during October 2007, the Company committed to apply to list and have its shares of common stock traded on the Nasdaq Capital Market, the Nasdaq Global Select Market or the Nasdaq Global Market or any successor market thereto (collectively, “Nasdaq”), or the New York Stock Exchange or any successor market thereto (together with Nasdaq, each a “National Stock Exchange”), no later than December 31, 2008. As a result of failing to achieve such listing, the Company’s majority shareholder, Winner State Investments Limited, committed to transfer 1,000,000 shares of common stock in the Company to the purchasers of shares of Series A Convertible Preferred Stock. The Company has accounted for this as a contribution of capital by its majority stockholder and recorded a charge to operations in the amount of $4,480,000 for the year ended December 31, 2008 based on the closing market price of $4.48 per share on December 31, 2008."
Quoted from 10K page 100:
" YANGLIN SOYBEAN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
(Stated in US Dollars)
16. CONVERTIBLE PREFERRED STOCK AND WARRANTS
SERIES A
On October 3, 2007, the Company sold 9,999,999 shares of Series A Preferred Stock and various stock purchase warrants for cash consideration totaling $21.5 million dollars. In addition, in connection with the sale of the Preferred Stock, certain advisors were provided warrants. The number of shares, exercise price and contractual terms eligible to be purchased with the warrants are summarized in the following table:
Number of warrants
Series of warrant 12/31/2012 12/31/2011 Exercise price Contractual term Expiration Date
Series A 0 10,000,000 $ 2.75 5 years October 2, 2012
Series B 0 5,000,000 $ 3.50 5 years October 2, 2012
Series J 0 0 $ 2.37 1.5 years April 3, 2009
Series C 0 0 $ 3.03 5 years April 3, 2009
Series D 0 0 $ 3.85 5 years April 3, 2009
Series E 0 1,000,000 $ 2.58 5 years October 2, 2012
Series F 0 500,000 $ 3.01 5 years October 2, 2012
Total 0 16,500,000
On April 3, 2009, the series J, C and D warrants expired unexercised.
On October 2, 2012, the series A,B,E and F warrants expired unexercised.
Series A Convertible Preferred Stock has liquidation rights senior to common stock and to any other class or series of stock issued by the Company not designated as ranking senior to or pari passu with Series A Convertible Preferred Stock. In the event of a liquidation of the Company, holders of Series A Convertible Preferred Stock are entitled to receive a distribution equal to $2.15 per share prior to any distribution to the holders of common stock or any other stock that ranks junior to the Series A Convertible Preferred Shares. Series A Convertible Preferred Stock is entitled to non-cumulative dividends only upon declaration of dividends by the Company. To date, no dividends have been declared or accrued. Series A Convertible Preferred Stock will participate based on their respective “as-if” conversion rates if the Company declares any dividends. Holders of Series A Convertible Preferred Stock also have voting rights required by applicable law and the relevant number of votes shall be equal to the number of shares of Common Stock issuable upon conversion of Series A Convertible Preferred Stock.
The gross proceeds of the sale were $21.5 million. The proceeds from the sale were allocated to Series A Convertible Preferred Stock, warrants and beneficial conversion features based on the relative fair value of the securities. The value of Series A Convertible Preferred Stock was determined by reference to the market price of the common stock into which it converts, and the fair value of the warrants was calculated using the Black-Scholes model with the following assumptions: expected life of 5 year, expected dividend rate of 0%, volatility of 27% and an interest rate of 4.24%.
100
YANGLIN SOYBEAN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
(Stated in US Dollars)
16. CONVERTIBLE PREFERRED STOCK AND WARRANTS (Continued)
The Company recognized a beneficial conversion feature discount on Series A Convertible Preferred Stock at its intrinsic value, which was the fair value of the common stock at the commitment date for Series A Convertible Preferred Stock investment, less the effective conversion price but limited to the $21.5 million of proceeds received from the sale. The Company recognized the $8.0 million beneficial conversion feature as an increase in paid in capital in the accompanying consolidated balance sheet on the date of issuance of Series A Convertible Preferred Stocks since these shares were convertible at the issuance date.
Each share of Series A Convertible Preferred Shares is convertible into one share of Common Stock, subject to standard adjustment provisions as set forth in the Certificate of Designations for our Series A Convertible Preferred Shares,
During the year ended December 31, 2012 710,000 shares of Series A Convertible Preferred Stock were converted into 710,000 shares of common stock. During the year ended December 31, 2011, 400,000 shares of Series A Convertible Preferred Stock were converted into 400,000 shares of common stock.
In connection to the Series A Convertible Preferred Stock as described above, on October 10, 2007, the Company also issued 1,000,000 Series E warrants at an exercise price of $2.58 per share and 500,000 Series F warrants at an exercise price of $3.01 per share to an investment banker and financial advisor, respectively. These warrants each have a five year term. The fair value of Series E warrants was $532,800 and Series F warrants was $205,452, and was recorded as offering cost of Series A Convertible Preferred Stock transaction.
The fair value of the Series E and F warrants was calculated using the Black-Scholes model with the following assumptions: expected life of 5 year, expected dividend rate of 0%, volatility of 27% and an interest rate of 4.24%.
The agreement also provides that if the Company doesn’t file, or if the registration statements aren’t declared effective throughout the required period, or if the Company ceases to trade on certain exchanges as defined, the Company shall pay damages equal to 1.5% of the amount invested for each calendar month capped at a cumulative damage payment amount of 15%. In connection with the sale of the Series A Convertible Preferred Stock during October 2007, the Company committed to apply to list and have its shares of common stock traded on the Nasdaq Capital Market, the Nasdaq Global Select Market or the Nasdaq Global Market or any successor market thereto (collectively, “Nasdaq”), or the New York Stock Exchange or any successor market thereto (together with Nasdaq, each a “National Stock Exchange”), no later than December 31, 2008. As a result of failing to achieve such listing, the Company’s majority shareholder, Winner State Investments Limited, committed to transfer 1,000,000 shares of common stock in the Company to the purchasers of shares of Series A Convertible Preferred Stock of the Company. The Company has accounted for this as a contribution of capital by its majority stockholder and recorded a charge to operations in the amount of $4,480,000 for the year ended December 31, 2008. Such shares were valued based on the closing market price of $4.48 per share on December 31, 2008.
101
YANGLIN SOYBEAN INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011
(Stated in US Dollars)
16. CONVERTIBLE PREFERRED STOCK AND WARRANTS (Continued)
Pursuant to the Registration Rights Agreement dated as of October 3, 2007 by and among the Company and certain holders (the Holders), the Company agreed to have a registration statement registering certain of the securities of the Holders declared effective with the Securities and Exchange Commission (“SEC”) on or prior to the Effectiveness Date defined in the Registration Rights Agreement, which was December 31, 2008, or pay the liquidated damages.
Although the registration statement was not declared effective as of December 31, 2008, pursuant to a Waiver and Release dated December 31, 2008, the Holders have waived their right to the liquidated damages for the Company’s failure to have the registration statement declared effective on or prior to the Effectiveness date under Registration Rights Agreement.
In exchange for the waiver and release of the liquidated damages, the Company entered into an Agreement dated December 31, 2008 (the Agreement). Under the Agreement, the Company agreed to hire and engage, by February 28, 2009, three (3) independent directors as defined by NASDAQ Rule 4200(a)(15) and who are acceptable to the Holders. Further, the Company shall comply with all of the provisions of NASDAQ Rule 4350 by February 28, 2009. If these requirements are not met, the Company shall pay to each Holder five percent (5%) of its initial investment under the Securities Purchase Agreement by and among the Company and the Holders dated October 3, 2007. On February 27, 2009, the Company signed an addendum to the Agreement with the Holders, which extended the deadline for hiring and engaging three (3) independent directors to March 13, 2009. On March 9, 2009, the Company adopted a form of new Bylaws, appointed three (3) independent directors, established three (3) standing committees under the Board of Directors (audit committee, compensation committee and governance and nominating committee), and approved the articles of the three (3) above mentioned standing committees and the Code of Conduct and Ethics, and thus has been compliant with the provisions of NASDAQ Rule 4350. In addition, the Company agreed to effect and announce, no later than June 30, 2009, a change to the Company’s current independent audit firm and engage a new independent audit firm listed as a Top 10 audit firm according to Public Accounting Report’s 2008 Annual Audit Rankings to audit the 2009 financial statements and review the interim financial statements. The Company has engaged UHY LLP, Inc. as its independent audit firm starting with the quarter ended June 30, 2009.
If these requirements were not met, the Company had to pay to each Holder ten percent (10%) of its initial investment under the Securities Purchase Agreement. Furthermore, the Company and the Holders agreed to extend the required Effectiveness Date of the Company’s Registration Statement filed with the Securities and Exchange Commission to September 30, 2009. The Company has complied with these requirements as of September 30, 2009 and the Registration Statement was declared effective by the SEC on June 29, 2009."
End quote.
VISION CAPITAL INVESTED $21.5 MILLION IN YSYB !!!!!!!!!
GO YSYB!!
