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EX-5.1 - LEGAL OPINION - Feihe International Inc | v162463_ex5-1.htm |
EX-23.1 - CONSENT OF GRANT THORNTON - Feihe International Inc | v162463_ex23-1.htm |
As
filed with the Securities and Exchange Commission on October 13,
2009
Registration
No. 333-161840
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Amendment
No. 1
to
FORM
S-1
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
American
Dairy, Inc.
(Exact
name of registrant as specified in its charter)
Utah
|
2020
|
90-0208758
|
(State
or other jurisdiction of
incorporation
or organization)
|
(Primary
Standard Industrial
Classification
Code Number)
|
(I.R.S.
Employer
Identification
No.)
|
Star
City International Building, 10 Jiuxianqiao Road, C-16th Floor
Chaoyang District, Beijing, China,
100016
(Address,
including zip code, and telephone number,
including
area code, of registrant’s principal executive offices)
Jonathan
H. Chou
Chief
Financial Officer
American
Dairy, Inc.
2275
Huntington Drive #278
San
Marino, CA 91108
+1
(626) 757-8885
(Name,
address, including zip code, and telephone number, including area code, of agent
for service)
It
is respectfully requested that the Securities and Exchange Commission send
copies of all notices, orders and communications to:
Matthew
D. Adler
Andrew
D. Ledbetter
DLA
Piper LLP (US)
701
Fifth Avenue, Suite 7000
Seattle,
WA 98104-7044
Telephone:
+1 (206) 839-4800
Facsimile:
+1 (206) 839-4801
|
Rocky
T. Lee
DLA
Piper UK LLP
20th
Floor, South Tower
Beijing
Kerry Center
1
Guanghua Road, Chaoyang District
Beijing
100020, PRC
Telephone:
+86 10 6561 1788
Facsimile:
+86 10 6561 5158
|
Approximate
date of commencement of proposed sale to public: as soon as practicable after this
Registration Statement is declared effective.
If any of
the securities being registered on this form are to be offered on a delayed or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, check
the following box. x
If this
Form is filed to register additional securities for an offering pursuant to Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier registration statement for the same
offering. o
If this
Form is a post-effective amendment filed pursuant to Rule 462(d) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier registration statement for the same
offering. o
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
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act. (Check
one):
Large
accelerated filer o
|
Accelerated filer o
|
Non-accelerated
filer o
|
Smaller reporting company x
|
(Do not
check if a smaller reporting company)
The
Registrant hereby amends this Registration Statement on such date or dates as
may be necessary to delay its effective date until the Registrant shall file a
further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
SUBJECT
TO COMPLETION, DATED OCTOBER 13, 2009
The
information in this preliminary prospectus is not complete and may be changed.
These securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This preliminary prospectus is
not an offer to sell nor does it seek an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
PROSPECTUS
2,647,542
Shares
|
|
American
Dairy, Inc.
Common
Stock
This
prospectus relates to the resale, by the selling shareholders identified in this
prospectus, of up to 2,647,542 shares of our common stock issued or issuable to
the selling shareholders, including 2,100,000 shares of our common stock issued
to the selling shareholders on August 26, 2009 pursuant to a subscription
agreement by and among us and the selling shareholders dated August 11, 2009, or
the Subscription Agreement, up to 525,000 shares of our common stock that we may
issue to the selling shareholders if we fail to meet certain earnings per share
targets for 2009 and 2010 in accordance with the terms of the Subscription
Agreement, or the Performance Shares, and up to 22,542 shares of our common
stock issuable upon exercise of a warrant, at an exercise price of $1.50 per
share, issued to one of the selling shareholders in June 2005 as
compensation for investment banking services, or the Warrant
Shares.
We will
not receive any proceeds from the sale by the selling shareholders of these
shares. We are paying the cost of registering the shares covered by
this prospectus as well as various related expenses, although the holder of the
Warrant Shares is paying our legal expenses relating to registering the Warrant
Shares. The selling shareholders are responsible for all discounts,
selling commission and other costs related to the offer and sale of their
shares. If required, the number of shares to be sold, the public
offering price of those shares, the names of any broker-deals and any applicable
commission or discount will be included in a supplement to this prospectus,
called a prospectus supplement.
The
selling shareholders and any participating broker-dealers may be deemed to be
“underwriters” within the meaning of the Securities Act of 1933, as amended, or
the Securities Act, in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the share purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
Our
common stock is quoted on the New York Stock Exchange, Inc., or the NYSE, under
the symbol “ADY.” On October 1, 2009, the closing price of our common stock as
reported on the NYSE was $27.08 per share.
Investing
in our common stock is highly speculative and involves a high degree of risk.
You should consider carefully the risks and uncertainties in the section
entitled “Risk Factors” beginning on page 3 of this prospectus.
NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS
APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR
ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
The
date of this prospectus is [____________], 2009.
TABLE
OF CONTENTS
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Page
|
|
SUMMARY
|
|
1
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THE OFFERING
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2
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|
RISK FACTORS
|
|
3
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FORWARD-LOOKING STATEMENTS
|
|
13
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USE OF PROCEEDS
|
|
13
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PRICE RANGE OF OUR COMMON
STOCK
|
|
13
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DIVIDEND POLICY
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13
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MANAGEMENT
|
|
14
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CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
|
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17
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PRINCIPAL SHAREHOLDERS
|
|
18
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OTHER INFORMATION REGARDING THE
COMPANY
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20
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SELLING SHAREHOLDERS
|
|
21
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DESCRIPTION OF SECURITIES TO BE
REGISTERED
|
|
23
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PLAN OF DISTRIBUTION
|
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24
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LEGAL MATTERS
|
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26
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EXPERTS
|
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26
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INTERESTS OF NAMED EXPERTS AND
COUNSEL
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26
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MATERIAL CHANGES
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26
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WHERE YOU CAN FIND MORE
INFORMATION
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26
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INCORPORATION OF CERTAIN INFORMATION BY
REFERENCE
|
27
|
Unless the context otherwise
requires, the terms “we,” “us,” “our,” “American
Dairy,” and “the Company” refer to American Dairy, Inc., a Utah corporation, and
its consolidated subsidiaries. References to “dollars” and “$” are
to United States dollars. Any logos or trademarks mentioned in
this prospectus are the property of their respective owners.
You may
rely only on the information contained in this prospectus. We have not
authorized anyone to provide information or to make representations not
contained in this prospectus. This prospectus is neither an offer to sell nor a
solicitation of an offer to buy any securities other than those registered by
this prospectus, nor is it an offer to sell or a solicitation of an offer to buy
securities where an offer or solicitation would be unlawful. Neither the
delivery of this prospectus, nor any sale made under this prospectus, means that
the information contained in this prospectus is correct as of any time after the
date of this prospectus.
SUMMARY
This
summary highlights selected information from this prospectus and the documents
incorporated by reference into this prospectus. This summary may not contain all
of the information that may be important to you. Please carefully read the
entire prospectus, including the information under the heading “Risk Factors”
and our financial statements and the related notes incorporated by reference
into this prospectus, before making an investment decision.
Overview
We are a
leading producer and distributor of milk powder, soybean milk powder, and
related dairy products in the People’s Republic of China, or the
PRC. Using proprietary processing techniques, we make products that
are specially formulated for particular ages, dietary needs and health
concerns. We have over 200 company-owned milk collection stations,
six production facilities with an aggregate milk powder production capacity of
approximately 1,220 tons per day and an extensive distribution network that
reaches over 84,000 retail outlets throughout China.
Our
products fall into four main product categories: milk powder, soybean powder,
rice cereal and walnut products. Milk powder is our primary product
and is divided into several sub-categories. We produce milk powder
for infants and young children formulated for zero to six months, six months to
one year, one to three years and three to six years of age. We also
produce milk powder for expectant mothers, students and for the middle-aged and
elderly populations. In addition, we purchase semi-finished milk
powder, or raw milk powder, from third parties, process it, and then distribute
it to beverage manufacturers and other wholesalers for use in their blended
drink products. We also produce soybean powder, rice cereal and
walnut products.
We own
and operate six production and packaging facilities. The production facilities
we have constructed comply with pharmaceutical good manufacturing practice, a
higher level of quality control than required for consumer goods manufacturing
facilities. Additionally, our production facilities are designed to
comply with, and have obtained, several quality assurance certifications, as
well as quality certifications from the PRC regulatory
authorities. We believe that our design standards help us assure our
product quality. Continuing our commitment to quality, we have also
added testing equipment and other quality control procedures to our processing
equipment manufactured by known European and American manufacturing
companies. We apply a 25-step quality control process that involves
over a hundred points of testing from the feed for the dairy cows, throughout
our manufacturing process, and extending to semi-finished products, which we
purchase from third parties for further processing, and finished
products.
Our
Corporate Information
We were
incorporated in the State of Utah on December 31, 1985, originally under the
corporate name of Gaslight, Inc. We were inactive until March 30, 1988, when we
changed our corporate name to Lazarus Industries, Inc. and engaged in the
business of manufacturing and marketing medical devices. We
discontinued this business in 1991 and became a non-operating public company
shell. Effective May 7, 2003, we acquired 100% of the issued and
outstanding capital stock of American Flying Crane Corporation, a Delaware
corporation that operates a dairy business in China through various
subsidiaries. In connection with that acquisition, we changed our
name to American Dairy, Inc. Today, we own various subsidiaries in
the PRC that operate our business.
Our
principal executive offices are located at Star City International Building, 10
Jiuxianqiao Road, C-16th Floor, Chaoyang District, Beijing, China 100016. Our
telephone number is 1 (626) 757-8885. Our Internet address is
www.americandairyinc.com. The information contained in or accessible through our
website does not constitute a part of this prospectus.
1
THE
OFFERING
Common
stock outstanding before the offering
|
21,671,730
shares as of October 1, 2009.
|
|
Common
stock offered by selling shareholders
|
Consists
of up to 2,647,542 shares of our common stock issued or issuable to the
selling shareholders, including 2,100,000 shares of our common stock
issued to the selling shareholders on August 26, 2009 pursuant to the
Subscription Agreement, up to 525,000 Performance Shares, and up to 22,542
Warrant Shares.
|
|
Common
stock to be outstanding after the offering
|
21,694,272
shares, assuming the Performance Shares are not issued and assuming the
issuance of all Warrant Shares.
|
|
Use
of proceeds
|
We
will not receive any proceeds from the sale of the common stock hereunder.
We
will, however, receive the exercise price of any common stock we sell for
cash to a selling shareholder upon exercise of a warrant to acquire the
Warrant Shares. See “Use of Proceeds” for a complete
description.
|
|
NYSE
Symbol
|
ADY
|
|
Risk
Factors
|
Please
read the section entitled “Risk Factors” beginning on page 3 of this
prospectus for a discussion of factors you should carefully consider
before deciding to invest in shares of our common
stock.
|
2
RISK
FACTORS
Investing
in our common stock involves a high degree of risk. You should carefully
consider the following risk factors and all other information contained in this
prospectus before purchasing our common stock. If any of the following events
were to occur, our business, financial condition or results of operations could
be materially and adversely affected. In these circumstances, the market price
of our common stock could decline, and you could lose some or all of your
investment. Additional risks and uncertainties not currently known to us or that
we currently believe to be immaterial could also materially and adversely affect
our business, financial condition, operating results and/or cash
flow.
Any
negative public perception regarding our products or industry, or any ill
effects or product liability claims, could harm our reputation, damage our
brand, result in costly and damaging recalls, and expose us to government
investigations and sanctions, which would materially and adversely affect our
results of operations.
We sell
products for human consumption, which involves risks such as product
contamination, spoilage and tampering. In 2008, sales in China of substandard
milk formula contaminated with a substance known as melamine caused the death of
six infants as well as illness of nearly 300,000 others. Although
this incident did not involve any of our products, China’s Administration of
Quality Supervision, Inspection and Quarantine found that the products of 22
Chinese milk and formula producers were contaminated by melamine, a substance
not approved for use in food, which caused significant negative publicity for
the entire dairy industry in China. The mere publication of
information asserting that our milk powder, infant formula or other products
contain melamine or other contaminants could have a material adverse effect on
us, regardless of whether these reports are scientifically supported or concern
our products or the raw materials used in our products. In addition,
if the consumption of any of our products causes injury, illness or death, we
may face product liability claims, product recalls, temporary or permanent
suspensions of operations, government investigations or sanctions, any of which
could be extremely expensive and damaging to our business.
Prior to
the 2008 melamine crisis, there have also been widely publicized occurrences of
counterfeit, substandard milk products in China. For example, in
April 2004, such sales of counterfeit and substandard infant formula in Anhui
Province, China caused the deaths of 13 infants and harmed many
others. Counterfeiting or imitation of our products may occur in the
future, and we may not be able to detect it and deal with it effectively. Any
occurrence of counterfeiting or imitation could negatively impact our corporate
brand and image or consumers’ perception of our products or similar nutritional
products generally, particularly if the counterfeit or imitation products cause
injury or death to consumers.
We
expect to incur costs related to our planned acquisitions and expansion into new
plants and ventures, which may not prove to be profitable. Moreover, any delays
in our expansion plans could cause our profits to decline and jeopardize our
business.
We
anticipate that our proposed expansion of our milk production facilities may
include the acquisition and construction of new or additional facilities. Our
cost estimates and projected completion dates for construction of new production
facilities may change significantly as the projects progress. In addition, our
projects will entail significant construction risks, including shortages of
materials or skilled labor, unforeseen environmental or engineering problems,
weather interferences and unanticipated cost increases, any of which could have
a material adverse effect on the projects and could delay their scheduled
openings. A delay in scheduled openings of production facilities will delay our
receipt of sales revenues from such facilities, which, when coupled with the
increased costs and expenses of our expansion, could cause a decline in our
profits.
Our plans
to finance, develop, and expand our production facilities will be subject to the
many risks inherent in the rapid expansion of a high growth business enterprise,
including unanticipated design, construction, regulatory and operating problems,
and the significant risks commonly associated with implementing a marketing
strategy in changing and expanding markets. These projects may not become
operational within their estimated time frames and budgets as projected at the
time we enter into a particular agreement, or at all. In addition, we may
develop projects as joint ventures in an effort to reduce our financial
commitment to individual projects. The significant expenditures required to
expand our production plants may not ultimately result in increased
profits.
When our
future expansion projects become operational, we will be required to add and
train personnel, expand our management information systems and control expenses.
If we do not successfully address our increased management needs or are
otherwise unable to manage our growth effectively, our operating results could
be materially and adversely affected.
Our
products may not achieve market acceptance.
We are
currently selling our products principally in northern, central, and eastern
China. Achieving market acceptance for our products, particularly in
new markets, will require substantial marketing efforts and the expenditure of
significant funds. There is substantial risk that any new markets may
not accept or be as receptive to our products. In addition, we intend
to market our products as premium and super-premium products and to adopt a
corresponding pricing model, which may not be accepted in new or existing
markets. Market acceptance of our current and proposed products will
depend, in large part, upon our ability to inform potential customers that the
distinctive characteristics of our products make them superior to competitive
products and justify their pricing. Our current and proposed products
may not be accepted by consumers or able to compete effectively against other
premium or non-premium dairy products. Lack of market acceptance would limit our
revenues and profitability.
3
Our
planned growth may require more raw milk than is available and could diminish
the quality of our dairy products.
Our
business requires a supply of raw milk. Our growth will be limited if the supply
of raw milk is insufficient to meet demand. Moreover, as we attempt to implement
our growth strategy, it may become difficult to maintain current levels of
quality control. Inadequate quality control could harm our reputation and the
demand for our products, which would also limit our growth. The raw milk used in
our products is supplied to us, in part, by numerous local farms under
output contracts. We believe that our farmers can increase their production of
raw milk. We further believe, however, that this supply may not be sufficient to
meet increased demand for our products associated with our proposed marketing
efforts and that such increase may compromise quality. Though we believe that
additional raw milk is available locally, if needed, we may not be able to enter
into arrangements with the producers of such milk on terms acceptable to us, if
at all. An inadequate supply of raw milk, coupled with concern over quality
control, could increase costs for raw milk or decrease the sales price for our
products, which could limit our ability to grow, cause our earnings to decline
and make our business less profitable.
The
recent global economic and financial market crisis could significantly impact
our financial condition.
Current
global economic conditions could have a negative effect on our business and
results of operations. Economic activity in China, United States and throughout
much of the world has undergone a sudden, sharp economic downturn following the
recent housing downturn and subprime lending collapse in both the United States
and Europe. Market disruptions have included extreme volatility in
securities prices, as well as severely diminished liquidity and credit
availability. The economic crisis may adversely affect us in a
variety of ways. Access to lines of credit or the capital markets may be
severely restricted, which may preclude us from raising funds required for
operations and to fund continued expansion. It may be more difficult
for us to complete strategic transactions with third parties. The financial and
credit market turmoil could also negatively impact our suppliers and customers,
which could decrease our ability to source, produce and distribute our products
and could decrease demand for our products. While it is not possible to predict
with certainty the duration or severity of the current disruption in financial
and credit markets, if economic conditions continue to worsen, it is possible
these factors could significantly impact our financial condition.
Our
results of operations may be affected by fluctuations in availability and price
of raw materials.
The raw
materials we use are subject to price fluctuations due to various factors beyond
our control, including, among other pertinent factors:
•
|
increasing
market demand;
|
•
|
inflation;
|
•
|
severe
climatic and environmental
conditions;
|
•
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seasonal
factors, with dairy cows generally producing more milk in temperate
weather as opposed to cold or hot weather and extended unseasonably cold
or hot weather potentially leading to lower than expected
production;
|
•
|
commodity
price fluctuations;
|
•
|
currency
fluctuations; and
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•
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changes
in governmental and agricultural regulations and
programs.
|
For
example, our raw milk cost increased by approximately 45% in 2008 due to various
factors, including, we believe, general economic conditions, such as inflation
and fuel prices, and rising production costs. We also expect that our
raw material prices will continue to fluctuate and be affected by these factors
in the future. Changes to our raw materials prices may result in increases in
production and packaging costs, and we may be unable to raise the prices of our
products to offset such increases in the short term or at all. As a result, our
results of operations may be materially and adversely affected.
4
We
are subject to public company reporting and other requirements for which we will
incur substantial costs and our accounting and other management systems and
resources may not be adequately prepared.
We incur
significant legal, accounting, insurance and other expenses as a result of being
a public company. For example, laws and regulations affecting public
companies, including the provisions of the Sarbanes-Oxley Act of 2002, or SOX,
and rules related to corporate governance and other matters subsequently adopted
by the U.S. Securities and Exchange Commission, or the SEC, and the NYSE, result
in substantial costs to us, including legal and accounting costs, and may divert
our management’s attention from other matters that are important to our
business. Compliance with Section 404 of SOX requires that our
management annually assess the effectiveness of our internal control over
financial reporting. During our review of our financial statements
and results for the year ended December 31, 2008 and the quarter ended June 30,
2009, our management identified several internal control matters that constitute
material weaknesses and significant deficiencies and, consequently, has
concluded that our internal control over financial reporting was not effective
at December 31, 2008 or June 30, 2009. In addition, management has
concluded, based primarily on the identification of the material weaknesses and
significant deficiencies, that our disclosure controls and procedures were not
effective at June 30, 2009. Material weaknesses in our internal
controls over financial reporting related to financial statement review
procedures, accounting treatment for routine and non-routine transactions, our
internal audit function, and our untimely assessment of our internal controls
over financial reporting. Significant deficiencies in our internal
controls over financial reporting related to period-end closing procedures,
access to administrative and accounting systems, documentation of accounts
receivable transfers and promoters expenses, and division of treasury and
accounting duties.
A
“material weakness” is a deficiency, or a combination of deficiencies, in
internal control over financial reporting such that there is a reasonable
possibility that a material misstatement of the registrant’s annual or interim
financial statements will not be prevented or detected on a timely basis by the
company’s internal controls. A “significant deficiency” is a
deficiency, or a combination of deficiencies, in internal control over financial
reporting that is less severe than a material weakness, yet important enough to
merit attention by those responsible for oversight of the registrant’s financial
reporting. A “deficiency” in internal control over financial
reporting exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned
functions, to prevent or detect misstatements on a timely basis. We
are devoting significant resources to remediating and improving our internal
controls, including hiring additional accounting, internal audit and finance
staff, engaging consultants to assist with these functions, upgrading our
systems, and implementing additional financial and management controls,
reporting systems and procedures. These measures cost us an aggregate
of approximately $690,000 as of August 13, 2009, are not expected fully to
remediate our material weaknesses until at least December 31, 2009, and may not
ensure the adequacy of our internal controls over our financial processes and
reporting in the future. These measures may not ensure the adequacy
of our internal controls over our financial processes and reporting in the
future. If we are unable to remediate successfully these material
weaknesses and significant deficiencies in a timely manner, investors may lose
confidence in our reported financial information, which could lead to a decline
in our stock price, limit our ability to access the capital markets in the
future, and require us to incur additional costs to improve our internal control
systems and procedures.
We
significantly depend on our management team.
Each of
our executive officers is responsible for an important aspect of our
operations. In addition, we rely on management and senior personnel
to ensure that our sourcing, production, sales, distribution and other business
functions are effective. Losing the services of our executive
officers or key personnel could be detrimental to our operations. We
do not have key-man life insurance for any of our executive officers or other
employees.
Investors
may not be able to enforce judgments entered by United States courts against
certain of our officers and directors.
We are
incorporated in the State of Utah. However, a majority of our
directors and executive officers, and certain of our principal shareholders,
live outside of the U.S., principally in China. As a result, you may not be able
to effect service of process upon those persons within the U.S. or enforce
against those persons judgments obtained in U.S. courts.
We
face substantial competition in connection with the marketing and sale of our
products.
Our
products compete with other premium quality dairy brands as well as less
expensive, non-premium brands. Our products face competition from non-premium
producers distributing in our marketing area and other producers packaging their
products in our marketing area. Many of our competitors are well established,
have greater financial, marketing, personnel and other resources, have more
established distribution channels into major markets, and have products that
have gained wide customer acceptance in the marketplace. Our largest competitors
are multinational dairy companies and dairies owned by the government of
China. The greater financial resources of such competitors will
permit them to procure retail store shelf space and to implement extensive
marketing and promotional programs, both generally and in direct response to
advertising efforts by us. The dairy industry in China is also characterized by
the frequent introduction of new products, accompanied by substantial
promotional campaigns. We may be unable to compete successfully or our
competitors may develop products which have superior qualities or gain wider
market acceptance than ours.
5
We
face the potential risk of product liability associated with food
products.
We face
the risk of liability in connection with the sale and consumption of dairy
products and other products should the consumption of such products cause
injury, illness or death. Such risks may be particularly great in a company
undergoing rapid and significant growth. The successful assertion of product
liability claims against us could result in potentially significant monetary
damages, divert management resources and require us to make significant payments
and incur substantial legal expenses. We do not currently maintain product
liability insurance. Any insurance that we may obtain in the future may be
insufficient to cover potential claims or the level of insurance coverage needed
may be unavailable at a reasonable cost. Even if a product liability claim is
not successfully pursued to judgment by a claimant, we may still incur
substantial legal expenses defending against such a claim and our brand image
and reputation would suffer. Finally, serious product quality concerns could
result in governmental action against us, which, among other things, could
result in mandatory recalls of our products, the suspension of production or
distribution of our products, loss of certain licenses, or other governmental
penalties, including possible criminal liability.
Doing
business in China involves various political and economic risks.
We
conduct substantially all of our operations and generate most of our revenue in
China. Accordingly, our business, financial condition, results of operations and
prospects are affected significantly by economic, political and legal
developments in China. China’s economy differs from the economies of most
developed countries in many respects, including:
•
|
the
higher level of government involvement and
regulation;
|
•
|
the
early stage of development of the market-oriented sector of the
economy;
|
•
|
the
rapid growth rate;
|
•
|
the
higher level of control over foreign exchange;
and
|
•
|
government
control over the allocation of many
resources.
|
As
China’s economy has been transitioning from a planned economy to a more
market-oriented economy, the government of China has implemented various
measures to encourage economic growth and guide the allocation of resources.
While these measures may benefit the overall economy of China, they may also
have a negative effect on us.
Although
the government of China has in recent years implemented measures emphasizing the
utilization of market forces for economic reform, the PRC government continues
to exercise significant control over economic growth in China through the
allocation of resources, controlling payment of foreign currency-denominated
obligations, setting monetary policy and imposing policies that impact
particular industries or companies in different ways. Any adverse
change in the economic conditions or government conditions or government
policies in China could have a material adverse effect on the overall economic
growth and the level of consumer spending in China, which in turn could lead to
a reduction in demand for our products and consequently have a material adverse
effect on our business and prospects.
Extensive
regulation of the food processing and distribution industry in China could
increase our expenses resulting in reduced profits.
We are
subject to extensive regulation by China’s Agricultural Ministry, and by other
provincial and local authorities in jurisdictions in which our products are
processed or sold, regarding the processing, packaging, storage, distribution
and labeling of our products. For instance, in June 2009, regulatory
requirements became effective in China requiring new package labeling for dairy
products, which we believe impacted our sales cycles during the three months
ended June 30, 2009. Other applicable laws and regulations governing
our products may include nutritional labeling and serving size requirements. Our
processing facilities and products are subject to periodic inspection by
national, provincial and local authorities. We believe that we are currently in
substantial compliance with all material governmental laws and regulations and
maintain all material permits and licenses relating to our operations.
Nevertheless, we may fall out of substantial compliance with current laws and
regulations or may be unable to comply with any future laws and regulations. To
the extent that new regulations are adopted, we will be required, possibly at
considerable expense, to adjust our activities in order to comply with such
regulations. Our failure to comply with applicable laws and regulations could
subject us to civil remedies, including fines, injunctions, recalls or seizures,
as well as potential criminal sanctions, which could have a material adverse
effect on our business, operations and finances.
6
Regulations
affecting acquisitions of PRC companies by foreign entities may make it more
difficult for us to complete acquisitions and grow our business.
In 2005,
the PRC State Administration of Foreign Exchange, or SAFE, issued a public
notice, known as “Circular 75,” concerning the application of foreign exchange
regulations to mergers and acquisitions involving foreign investment in
China. Among other things, the public notice provides that if an
offshore company controlled by PRC residents intends to acquire a PRC company,
such acquisition will be subject to strict examination by the relevant foreign
exchange authorities. Under Circular 75, if an acquisition of a PRC
company by an offshore company controlled by PRC residents occurred prior to the
issuance of Circular 75, certain PRC residents were required to submit a
registration form to the local SAFE branch to register their ownership interests
in the offshore company before March 31, 2006. Such PRC residents
must also amend the registration form if there is a material event affecting the
offshore company, such as, among other things, a change to the company’s share
capital, a transfer of shares, or if the company is involved in a merger, an
acquisition or a spin-off transaction or uses its assets in China to guarantee
offshore obligations.
As there
is still significant uncertainty in China regarding the interpretation and
implementation of Circular 75, we cannot predict how these regulations will
affect our future acquisition strategy and business operations. For example, if
we decide to acquire additional PRC companies, we or the owners of such
companies may not be able to complete the filings and registrations, if any,
required by the SAFE notices. This may restrict our ability to implement our
acquisition strategy and could adversely affect our business and
prospects.
In
addition, in 2006 six PRC regulatory authorities, including the PRC Ministry of
Commerce and the PRC Securities Regulatory Commission, jointly promulgated a
rule entitled “Provisions regarding Mergers and Acquisitions of Domestic
Enterprises by Foreign Investors,” or the New M&A Rules. The New M&A
Rules establish additional procedures and requirements that could make merger
and acquisition activities by foreign investors more time-consuming and complex,
including, in some circumstances, advance notice to the Ministry of Commerce of
any change-of-control transaction in which a foreign investor takes control of a
PRC domestic enterprise. Compliance with the New M&A Rules, and any related
approval processes, including obtaining approval from the Ministry of Commerce,
may delay or inhibit our ability to complete such transactions, which could
affect our ability to expand our business or maintain our market
share.
The
PRC government’s recent measures to curb inflation rates could adversely affect
future results of operations.
China has
faced rising inflation in recent years. The government of China undertook
various measures to alleviate the effects of inflation, especially with respect
to key commodities. In January 2008, the PRC National Development and
Reform Commission announced national price controls on various products,
including milk. Similarly, the government of China may conclude that
the prices of infant formula or other of our products are too high and may
institute price controls that would limit our ability to set prices for our
products as we might wish. The government of China has also
encouraged local governments to institute price controls on similar
products. Such price controls could adversely affect our future
results of operations and, accordingly, the price of our common
stock.
The
PRC currency is not a freely convertible currency, which could limit our ability
to obtain sufficient foreign currency to support our business operations in the
future.
The PRC
currency, the “Renminbi” or “RMB,” is not freely convertible into other foreign
currencies, and we receive substantially all of our revenues in Renminbi. We
rely on the PRC government’s foreign currency conversion policies, which may
change at any time, in regard to our currency exchange needs. In China, the
government has control over Renminbi reserves through, among other things,
direct regulation of the conversion of Renminbi into other foreign currencies
and restrictions on foreign imports. Although foreign currencies that are
required for current account transactions can be bought freely at authorized PRC
banks, the proper procedural requirements prescribed by PRC law must be met. At
the same time, PRC companies are also required to sell their foreign exchange
earnings to authorized PRC banks and the purchase of foreign currencies for
capital account transactions still requires prior approval of the PRC
government. This substantial regulation by the PRC government of foreign
currency exchange may restrict our business operations and a change in any of
these government policies could negatively impact our operations, which could
result in a loss of profits.
7
In order
for our China subsidiaries to pay dividends to us, a conversion of Renminbi into
U.S. dollars is required, which, if not permitted by the PRC government, would
interrupt our cash flows. Under current PRC law, the conversion of Renminbi into
foreign currency for capital account transactions generally requires approval
from SAFE and, in some cases, other government agencies. Government authorities
may impose restrictions that could have a negative impact in the future on the
conversion process and upon our ability to meet our cash needs and to pay
dividends to our shareholders. Although our subsidiaries’ classification as
wholly foreign-owned enterprises, or WFOEs, under PRC law permits them to
declare dividends and repatriate their funds to us in the United States, any
change in this status or the regulations permitting such repatriation could
prevent them from doing so. Any inability to repatriate funds to us
would in turn prevent us from utilizing our PRC cash to pay creditors in U.S.
dollars or other currencies or to pay dividends to our
shareholders.
Fluctuations
in the exchange rate between the PRC currency and the U.S. dollar could
adversely affect our operating results.
The
functional currency of our operations in China is the Renminbi. However, results
of our operations are translated at average exchange rates into U.S. dollars for
purposes of reporting results. As a result, fluctuations in exchange rates may
adversely affect our expenses and results of operations as well as the value of
our assets and liabilities. Fluctuations may adversely affect the comparability
of period-to-period results. We do not currently use hedging techniques, and any
hedging techniques we may use in the future may not eliminate, and may
exacerbate, the effects of currency fluctuations. Thus, exchange rate
fluctuations could cause our profits, and therefore our stock prices, to
decline.
Under
the New EIT Law, we may be classified as a “resident enterprise” of China, which
would likely result in unfavorable tax consequences to us and our non-PRC
shareholders.
Under
China’s Enterprise Income Tax Law, or the New EIT Law, and its implementing
rules, which became effective in 2008, an enterprise established outside of
China with “de facto management bodies” within China is considered a “resident
enterprise,” meaning that it can be treated in a manner similar to a Chinese
enterprise for enterprise income tax purposes. Under the implementing
rules of the New EIT Law, de facto management means substantial and overall
management and control over the production and operations, personnel,
accounting, and properties of the enterprise. Because the New EIT Law
and its implementing rules are new, it is unclear how tax authorities will
determine tax residency based on the facts of each case.
If the
PRC tax authorities determine that American Dairy, Inc. is a “resident
enterprise” for PRC enterprise income tax purposes, unfavorable PRC tax
consequences could follow. First, we may be subject to enterprise income tax at
a rate of 25% on our worldwide taxable income as well as PRC enterprise income
tax reporting obligations. Second, although under the New EIT Law and its
implementing rules dividends paid to us from our PRC subsidiaries would qualify
as “tax-exempt income,” such dividends may be subject to a 10% withholding tax,
as the PRC foreign exchange control authorities, which enforce the withholding
tax, have not yet issued guidance with respect to the processing of outbound
remittances to entities that are treated as resident enterprises for PRC
enterprise income tax purposes. Finally, it is possible that future guidance
issued with respect to the new “resident enterprise” classification could result
in a situation in which a 10% withholding tax is imposed on dividends we pay to
our non-PRC shareholders and with respect to gains derived by our non-PRC
shareholders from transferring our shares. Although we are monitoring
the possibility of “resident enterprise” treatment for the 2008 and 2009 tax
years and evaluating appropriate organizational changes to avoid this treatment,
our efforts and evaluation may prove unsuccessful and incorrect.
If we
were treated as a “resident enterprise” by PRC tax authorities, we would be
subject to tax in both the U.S. and China, and our PRC tax may not be creditable
against our U.S. tax.
We
do not intend to pay and may be restricted from paying dividends on our common
stock.
We have
never declared or paid dividends on our capital stock and we do not intend to
declare dividends in the foreseeable future. We currently intend to retain
future earnings to fund our continued growth. Furthermore, if we decide to pay
dividends, foreign exchange and other regulations in China may restrict our
ability to distribute retained earnings from China or convert those payments
from Renminbi into foreign currencies.
Lack
of bank deposit insurance puts our funds at risk of loss from bank foreclosures
or insolvencies.
We
maintain certain bank accounts in China that are not protected by FDIC insurance
or other insurance. As of June 30, 2009, we held approximately $53.9 million in
bank accounts in China. If a PRC bank holding our funds experienced
insolvency, it may not permit us to withdraw our funds, which would result in a
loss of such funds and reduction of our net assets.
8
Limited
and uncertain trademark protection in China makes the ownership and use of our
trademark uncertain.
We have
obtained trademark registrations for the use of our trade name “Feihe,” as well
as our “Feifan,” “Feirei,” “Feiyue,” and “Beidiqi” Chinese brands and our
“Firmus” and “Babyrich” English brand names, which have been registered with the
PRC Trademark Bureau of the State Administration for Industry and Commerce with
respect to our milk products. We believe our trademark is important
to the establishment of consumer recognition of our
products. However, due to uncertainties in PRC trademark law, the
protection afforded by our trademark may be less than we currently expect and
may, in fact, be insufficient. Moreover, even if it is sufficient, in the event
it is challenged or infringed, we may not have the financial resources to defend
it against any challenge or infringement and such defense could in any event be
unsuccessful. Moreover, any events or conditions that negatively impact our
trademark could have a material adverse effect on our business, operations and
finances.
Our
lack of patent protection could permit our competitors to copy our trade secrets
and formula and thus gain a competitive advantage.
We have
no patents covering our products or production processes, and we expect to rely
principally on know-how and the confidentiality of our formula and production
processes for our products and our flavoring formula in producing competitive
product lines. Any breach of confidentiality by our executives or employees
having access to our formula could result in our competitors gaining access to
such formula. The ensuing competitive disadvantage could reduce our revenues and
our profits.
One
of our shareholders owns a significant percentage of our stock and will be able
to exercise significant influence over our affairs.
Leng
You-Bin, our Chairman, Chief Executive Officer, President, and General Manager,
beneficially owned approximately 41.1% of our common stock as of October 1,
2009. Our executive officers and directors as a group beneficially
owned approximately 50.3% of our common stock as of October 1,
2009. Consequently, these individuals will likely be able to
determine the composition of our board of directors, retain the voting power to
approve certain matters requiring shareholder approval and continue to have
significant influence over our operations. The interests of these
shareholders may be different than the interests of other shareholders on these
matters. This concentration of ownership could also have the effect
of delaying or preventing a change in our control or otherwise discouraging a
potential acquirer from attempting to obtain control of us, which in turn could
reduce the price of our common stock.
Failure
to comply with the U.S. Foreign Corrupt Practices Act could subject us to
penalties and other adverse consequences.
Since we
are a Utah corporation and a public company in the United States, we are subject
to the U.S. Foreign Corrupt Practices Act, which generally prohibits U.S.
companies from engaging in bribery or other prohibited payments to foreign
officials for the purpose of obtaining or retaining business. Non-U.S.
companies, including some that may compete with our company, are not subject to
these prohibitions. Corruption, extortion, bribery, pay-offs, theft and other
fraudulent practices may occur in China. Although such practices are prohibited
at our company, our employees or other agents may engage in such conduct for
which we might be held responsible. If our employees or other agents
are found to have engaged in such practices, we could suffer severe penalties
and other consequences that may have a material adverse effect on our business,
financial condition and results of operations.
We
have a significant amount of indebtedness, which may limit our operating
flexibility.
As of
June 30, 2009 we had approximately $207.1 million of total liabilities, which
included approximately $79.5 million of outstanding principal on our 7.75%
Convertible Notes Due 2009, or the 2009 Notes, and our 1.00% Guaranteed Senior
Secured Convertible Notes due 2012, or the 2012 Notes, which have been
restructured. Although all of our 2009 Notes have converted into shares of our
common stock, we expect to continue to incur debt to fund capital and operating
expenses. Our high level of indebtedness could have important consequences,
including the following:
•
|
it
may be difficult for us to satisfy our obligations with respect to our
indebtedness;
|
•
|
our
ability to obtain additional financing for working capital, capital
expenditures, or general corporate or other purposes may be
impaired;
|
•
|
a
substantial portion of our cash flow from operations must be dedicated to
the payment of principal and interest on our indebtedness, reducing the
funds available to us for other
purposes;
|
•
|
it
may cause our trade creditors to change their terms for payment on goods
and services provided to us, thereby negatively impacting our ability to
receive products and services on acceptable
terms;
|
9
•
|
it
may place us at a competitive disadvantage compared to our competitors
that have less debt or are less leveraged;
and
|
•
|
we
may be more vulnerable to economic downturns, may be limited in our
ability to respond to competitive pressures and may have reduced
flexibility in responding to changing business, regulatory and economic
conditions.
|
Our
ability to pay interest on and to satisfy our debt obligations will depend upon,
among other things, our future operating performance and our ability to
refinance indebtedness when necessary. Each of these factors is, to a
large extent, dependent upon economic, financial, competitive and other factors
beyond our control. If, in the future, we cannot generate sufficient
cash from operations to meet our debt obligations, we will need to refinance our
existing debt, obtain additional financing or sell assets. Our
business may not generate sufficient cash flows to satisfy our existing
indebtedness and funding sufficient to satisfy our debt service requirements may
not be available on satisfactory terms, if at all.
The
covenants in the indentures governing our 2012 Notes restrict our ability to
operate our business and our failure to comply with them could adversely affect
our business and financial condition.
We issued
an aggregate principal amount of $80.0 million in 2012 Notes, approximately
$10.0 million of which remains outstanding. The indentures under
which the 2012 Notes were issued contain covenants restricting our operations,
including restrictions on:
•
|
our
use and maintenance of our
properties;
|
•
|
incurrence
of indebtedness;
|
•
|
declaring
or paying dividends or other
distributions;
|
•
|
repurchasing
our capital stock or subordinated
obligations;
|
•
|
making
investments;
|
•
|
incurring
liens;
|
•
|
selling
assets;
|
|
•
|
our
use of the proceeds from the sale of the 2012 Notes;
and
|
|
•
|
our
engaging in business unrelated to dairy and related food
products.
|
The
indentures also require us to maintain tangible net worth ratios, to complete a
qualifying initial public offering of our common stock by December 1, 2008, to
repurchase some or all of our 2012 Notes from electing holders upon certain
assets sales, upon certain change of control transactions or if our common stock
ceases to trade on a qualifying U.S. stock exchange, and to file reports under
the Securities Exchange Act of 1934, as amended, or the Exchange
Act, with the SEC. In addition, the outstanding 2012 Notes will
accrue additional interest at an annual rate of 5.0% if a qualifying initial
public offering has not occurred by December 1, 2008, and we will also be
obligated to pay an additional amount equal to 3.0% of the principal amount of
the outstanding 2012 Notes if a qualifying initial public offering has not
occurred by December 1, 2008 and an additional amount equal to 1.0% of the
principal amount of the outstanding 2012 Notes if we fail to retain a qualified
auditor at any time after May 1, 2008. Although we have entered into
a supplemental indenture pursuant to which we have obtained waivers and consents
from the holders of the 2012 Notes, those waivers and consents are limited in
scope and are conditioned on events, including our timely making required
repurchase payments, that we may not be able to satisfy. Our failure
to comply with the restrictions on our operations and other requirements under
our indentures could constitute an event of default, subject us to litigation,
and have an adverse effect on our business and financial
condition.
10
Our
failure to repurchase the 2012 Notes pursuant to the supplemental indenture
could adversely affect our business and financial condition.
Pursuant
to the supplemental indenture with respect to the 2012 Notes, holders of 100% of
the outstanding 2012 Notes elected to exercise the early repurchase option with
respect to all of the outstanding 2012 Notes, which obligates us to repurchase
the 2012 Notes for an aggregate amount of $92.0 million in accordance with the
terms and conditions of the supplemental indenture. Accordingly, we
have paid approximately $79.9 million to the holders of the 2012 Notes, of which
approximately $11.0 million was paid in November 2008, approximately $4.3
million was paid in January 2009, approximately $15.3 million was paid in April
2009, and approximately $15.3 million was paid in July 2009. In August 2009, we
paid approximately $34.0 million in lieu of $34.5 million we would have been
required to pay in October 2009, and we are obligated to pay the remaining
approximately $11.5 million by October 15, 2009. We may not have
adequate cash on hand or generate sufficient cash flows to make the repurchase
payment and, even if we do, making such payments could substantially impair our
liquidity and capital resources. Additional financing sufficient to
make the repurchase payment may not be available on satisfactory terms, if at
all. If we do not make the required repurchase payment on October 15,
2009, the waivers granted to us under the supplemental indenture will terminate,
which will restrict our business operations, the 2012 Notes will recommence
accruing interest, which will adversely affect our business and financial
condition, and the holders of the 2012 Notes could exercise their conversion
rights under the indentures, which may result in substantial
dilution.
We
may face significant penalties if we are unable to make securities law filings
in compliance with our agreements.
In
connection the issuances of with our 2009 Notes, we have granted demand,
piggy-back and S-3 registration rights. The amended registration
rights agreement requires us to pay additional interest, accruing at 1.0% of the
principal amount of each holder’s 2009 Notes per month, if:
•
|
we
fail to file a registration statement by January 3,
2007;
|
•
|
we
fail to file a registration statement by the three month anniversary of
any demand registration notice;
|
•
|
sales
of all registrable securities cannot be made pursuant to the registration
statement;
|
•
|
our
common stock ceases to be listed or traded in qualifying exchanges or
markets;
|
•
|
a
qualifying initial public offering has not occurred on or before June 30,
2009;
|
•
|
we
fail to keep public information
available;
|
•
|
we
fail to file in a timely manner all reports and other documents we are
required to file with the SEC; or
|
•
|
we
fail to maintain our Exchange Act
registration.
|
The
holders of our 2009 Notes have agreed that we will only be obligated to make
additional interest payments to them if a registration statement is not
effective by June 30, 2009 or if we do not comply with our reporting and filing
obligations under the Exchange Act after April 15, 2009. Although the
registration statement became effective on June 30, 2009, our failure to comply
with our reporting and filing obligations under the Exchange Act could expose us
to substantial future penalties.
Furthermore,
under the indentures governing our 2012 Notes, we are required to
pay:
•
|
an
additional amount equal to 3.0% of the principal amount of the outstanding
2012 Notes if a qualifying initial public offering has not occurred by
December 1, 2008, and
|
•
|
additional
interest accruing at an annual rate of 0.25% for the first 90 days, and
thereafter at an annual rate of 0.5%, if, within 90 days of our
eligibility to do so, we fail to file a shelf registration statement for
the 2012 Notes, the guarantees of the 2012 Notes, and any shares of our
common stock issuable upon conversion of the 2012 Notes, or if such a
shelf registration statement does not become effective within 180 days
of our eligibility to make such a
filing.
|
Although
the holders of our 2012 Notes have waived these additional payment and interest
obligations, the waiver provides that these obligations will recommence if we do
not make the required 2012 Note repurchase payments pursuant to the supplemental
indenture. If we are unable to make the repurchase payments and to
comply with the public offering and registration statement requirements, our
business and financial condition will be adversely affected.
11
The
terms of our subscription agreement with the purchasers may have adverse impacts
on us.
On
August 11, 2009, we entered into the Subscription Agreement pursuant to which we
agreed to issue 2,100,000 shares of our common stock to the purchasers for an
aggregate purchase price of $63.0 million. We completed the
transaction on the proposed terms on August 26, 2009, or the Closing
Date. The Subscription Agreement includes several provisions that
could have an adverse effect on us. We have agreed not to issue new
shares of our common stock at a price below $30.00 per share without the prior
written consent of a majority in interest of the purchasers, subject to certain
exceptions, which could preclude us from raising additional funds. In
addition, if we fail to meet certain earnings per share targets for 2009 and
2010, we have agreed to issue additional shares of our common stock to the
purchasers in proportion to the amount by which we fail to meet the target, up
to a maximum amount of 525,000 shares, which would result in immediate and
substantial dilution to our shareholders. Furthermore, if the average
closing prices of our common stock for the fifteen trading days commencing on
the third anniversary of the Closing Date is less than $39.00, the purchasers
will have the right to cause us to repurchase all of the securities acquired in
connection with the Subscription Agreement, which could significantly impact our
liquidity and capital resources.
We
are at risk of securities litigation.
We are at
risk of being subject to securities litigation, including possible enforcement
action or class action lawsuits. Following notification by the SEC in
2007 of an informal investigation related to our former independent registered
public accountants, we dismissed our former auditors, sued our former auditors,
engaged new independent registered public accountants, commenced a re-audit of
historical financial statements, and restated our financial statements as of and
for our fiscal years ended December 31, 2005 and 2006. Accordingly,
we were unable to file Exchange Act reports for 2007 and 2008 in a timely
manner. In addition, we have restated our quarterly financial
statements for the quarter ended March 31, 2009 to reclassify certain cash flow
items from operating activities to investing activities, and we have amended our
Form 10-K for the 2008 fiscal year to revise several notes to our financial
statements, including our quarterly operating results. Securities
class action litigation has often been brought against companies who have been
unable to provide current public information or who have restated previously
filed financial statements. Such litigation is complex and could
result in substantial costs, divert management’s attention and resources, and
seriously harm our business, financial condition and results of
operations.
12
FORWARD-LOOKING
STATEMENTS
The
statements included in this prospectus that are not purely historical are
forward-looking statements within the meaning of Section 21E of the Exchange
Act, and Section 27A of the Securities Act. These statements include, but are
not limited to, statements about our plans, objectives, expectations,
strategies, intentions or other characterizations of future events or
circumstances and are generally identified by the words “may,” “expects,”
“anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “targets,”
“could,” “would,” and similar expressions. Because these forward-looking
statements are subject to a number of risks and uncertainties, our actual
results could differ materially from those expressed or implied by these
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed under the heading
“Risk Factors” and in other documents we file from time to time with the
Securities and Exchange Commission, or the SEC. All forward-looking statements
included in this prospectus are based on information available to us on the date
hereof. Our business and the associated risks may have changed since the date
this prospectus was originally filed with the SEC. We assume no obligation to
update any such forward-looking statements.
USE
OF PROCEEDS
We will
not receive any proceeds from the sale of the shares by the selling
shareholders, but we
will receive the exercise price of any common stock we sell for cash to a
selling shareholder upon exercise of a warrant to acquire the Warrant Shares.
All net
proceeds from the sale of the common stock covered by this prospectus will go to
the selling shareholders. We plan
to use the proceeds from the exercise of the warrant, if any, for working
capital and general corporate purposes.
PRICE
RANGE OF OUR COMMON STOCK
Our
common stock trades on the NYSE under the symbol “ADY.” On October 1,
2009, there were 21,671,730 shares of our common stock issued and outstanding
that were held by approximately 430 shareholders of record. On October 1,
2009, the closing price of our common stock as reported on the NYSE was $27.08
per share. The table below lists the high and low closing prices per
share of our common stock for each quarterly period during the past two fiscal
years and interim periods in the 2009 fiscal year, as reported on the NYSE (and
the NYSE Arca for periods prior to June 2009).
|
Closing Price Range of
Common Stock
|
|||||||
High
|
Low
|
|||||||
Year
Ended December 31, 2007:
|
|
|
||||||
1st
Quarter
|
$ | 25.20 | $ | 18.76 | ||||
2nd
Quarter
|
$ | 22.01 | $ | 16.80 | ||||
3rd
Quarter
|
$ | 21.69 | $ | 16.80 | ||||
4th
Quarter
|
$ | 23.94 | $ | 11.15 | ||||
Year
Ended December 31, 2008:
|
||||||||
1st
Quarter
|
$ | 12.91 | $ | 7.00 | ||||
2nd
Quarter
|
$ | 13.91 | $ | 7.88 | ||||
3rd
Quarter
|
$ | 11.34 | $ | 6.74 | ||||
4th
Quarter
|
$ | 17.02 | $ | 8.32 | ||||
Year
Ending December 31, 2009:
|
||||||||
1st
Quarter
|
$ | 17.08 | $ | 9.77 | ||||
2nd
Quarter
|
$ | 43.16 | $ | 15.25 | ||||
3rd
Quarter
|
$ | 39.95 | $ | 20.08 |
DIVIDEND
POLICY
We have
not declared or paid any dividends on our common stock and presently do not
expect to declare or pay any such dividends in the foreseeable
future. Payment of dividends to our shareholders would require
payment of dividends by our PRC subsidiaries to us. This, in turn,
would require a conversion of Renminbi into US dollars and repatriation of funds
to the US. Under current PRC law, the conversion of Renminbi into
foreign currency for capital account transactions generally requires approval
from SAFE and, in some cases, other government agencies. Government
authorities may impose restrictions that could have a negative impact in the
future on the conversion process and upon our ability to meet our cash needs,
and to pay dividends to our shareholders. Although our
subsidiaries’ classification as WFOEs under PRC law permits them to declare
dividends and repatriate their funds to us in the United States, any change in
this status or the regulations permitting such repatriation could prevent them
from doing so. Any inability to repatriate funds to us would in turn
prevent payments of dividends to our shareholders.
13
MANAGEMENT
Directors
The
following table sets forth the name and age of each member of our board of
directors, the positions and offices held by each director with us, and the
period during which the director has served as one of our
directors. Directors serve until the election and qualification of
their successors.
Name
|
Age
|
Position
|
Director Since
|
|||
Leng
You-Bin
|
44
|
Chairman,
Chief Executive Officer, President, and General Manager
|
2003
|
|||
Liu
Hua
|
36
|
Vice
Chairman, Secretary, Treasurer, and Director
|
2003
|
|||
Liu
Sheng-Hui
|
39
|
Vice
President of Finance, Feihe Dairy, and Director
|
2003
|
|||
Hui-Lan
Lee
|
59
|
Director
|
2003
|
|||
Kirk
G. Downing, Esq.
|
56
|
Director
|
2005
|
|||
James
C. Lewis, Esq.
|
57
|
Director
|
2006
|
|||
Neil
Nanpeng Shen
|
41
|
Director
|
2009
|
Leng
You-Bin has been our Chairman, Chief Executive Officer, President, and
General Manager since May 2003. From January 2002 to May 2003, Mr.
Leng served as the Chief Executive Officer and President of American Flying
Crane Corporation. From 1997 to 2002, Mr. Leng served as the General Manager of
Feihe Dairy, and he became the Chairman and General Manager in
2000. From 1989 to 1997, Mr. Leng served as a technician, deputy
director and director of Zhaoguang Dairy Plants, the predecessor of Feihe
Dairy. Mr. Leng received a bachelor’s degree in food engineering from
Northeast Agriculture University, China. and Shanghai Light Industrial college
and studied business administration at Beijing University.
Liu Hua
has been our Vice Chairman since April 2008, and he has also served as
Secretary, Treasurer, and a director since May 2003. From May 2003 to
April 2008, Mr. Liu served as our Chief Financial Officer, Secretary, and
Treasurer. From November 2000 to May 2003, Mr. Liu served as the
Financial Officer of Feihe Dairy. From June 1998 to November 2000,
Mr. Liu served as the Chief Executive Officer of Shenzhen Cima Limited, a
financial consulting company. From January 1996 to June 1998, Mr. Liu
served as Chief Executive Officer of Shensheng Jiajing Inc., a trading
company. From September 1993 to January 1996, Mr. Liu served as the
Chief Executive Officer of Zhengzhou Huacheng Limited, a trading
company. Mr. Liu received a bachelor’s degree in finance and
economics from Xian Jiaotong University and from Shenzhen
University.
Liu
Sheng-Hui has been a director since May 2003, and he has also served as
Vice President of Finance of Feihe Dairy since August 2001. From
January 2000 to May 2003, Mr. Liu served as Chief Financial Officer and a
director of American Flying Crane Corporation. From September 1998 to
January 2000, Mr. Liu served as Chief Financial Officer at Feihe Dairy, where he
also served in a variety of business positions from July 1992 to September
1998. Mr. Liu received a bachelor’s degree in economics from
Northeast Agriculture University, China, and an associate degree in accounting
from Country Cadre Institute under the Supervision of Ministry of Agriculture in
China.
Hui-Lan (“Tracy”)
Lee has been a director since June 2003. From April 2006 to
November 2008, Ms. Lee served as Vice President of Financial Reporting of
Countrywide Home Loans, Inc., a residential mortgage company, where she also
served as Vice President and Director of Income Tax Compliance from April 2003
to April 2006. From October 1996 to March 2003, Ms. Lee served as Tax
Manager at Watson Pharmaceuticals, Inc., a specialty pharmaceutical
company. From 1979 to 1996, Ms. Lee held a variety of management
positions with companies such as The Flying Tiger Line Inc., a large air cargo
company, Quotron Systems, Inc., a large supplier of equity data to the financial
community, and Lear Siegler, Inc., a conglomerate company in aerospace,
automotive, agriculture and other industries. Ms. Lee received a
bachelor’s degree in business administration from National Cheng-Kung
University, Taiwan, a Master of Science degree in Taxation from Golden Gate
University, and a Master of Business Administration from Indiana
University.
Kirk G.
Downing has been a director since February 2005. From December
1980 to the present, he has been practicing law in Los Angeles, California. From
January 1989 to June 1997, Mr. Downing also engaged in ranching, farming,
logging and property development. Mr. Downing received a bachelor’s
degree in liberal arts from Portland State University and a Juris Doctorate
degree from Loyola Law School.
James C.
Lewis has been a director since December 2006. From 2006 to
the present, Mr. Lewis has been a partner in the law firm of Lewis, Hansen,
Waldo & Pleshe, in Salt Lake City, Utah. From July 2002 to
September 2006, Mr. Lewis was involved in a number of private business ventures
and practiced law under the name James C. Lewis, L.C. in Salt Lake City,
Utah. From 2000 to June 2002, Mr. Lewis was a member of the firm of
Jones, Waldo, Holbrook & McDonough, Salt Lake City, Utah. From
1997 to 2000, Mr. Lewis was a partner in the firm of Lewis Law
Offices. From 1993 to 1997, Mr. Lewis was a partner in the firm of
Diumenti & Lewis. From 1987 to 1992, he was a partner in the firm of Lewis
& Lehman. From 1979 to 1985, Mr. Lewis was an attorney with Kruse, Landa
& Maycock. Mr. Lewis received a bachelor’s degree in psychology
from the University of Utah and a Juris Doctorate from the University of San
Diego.
14
Neil Nanpeng
Shen has been a director since August 2009. Mr. Shen is the
founding managing partner of Sequoia Capital China. Mr. Shen
co-founded Ctrip.com International Limited, or Ctrip, a large travel
consolidator in China, and served as its chief financial officer from 2000 to
October 2005 and as its president from August 2003 to October 2005. He also
co-founded Home Inns and Hotels Management, or Home Inns, a leading economy
hotel chain in China. Prior to founding Ctrip and Home Inns, Mr. Shen
had worked for more than eight years in the investment banking industry in New
York and Hong Kong. Currently, Mr. Shen is a co-chairman of Home Inns, a
director of Ctrip and a director of E-House (China) Holdings Limited, a
NYSE-listed leading real estate service company in China. He is also an
independent director of Focus Media Holding Limited, a Nasdaq-listed media
advertising company based in China, and a director of a number of privately
owned companies based in China. Mr. Shen received his bachelor’s
degree from Shanghai Jiao Tong University in China and his master’s degree from
the School of Management at Yale University.
Director
Independence
The board
of directors has determined that Hui-Lan Lee, Kirk G. Downing, James C. Lewis,
and Neil Nanpeng Shen are each an independent director as defined by the listing
standards of the NYSE and SEC rules.
Board
Committees
Our board
of directors has established the following committees: the Audit
Committee, the Compensation Committee, the Nominating/Corporate Governance
Committee, the Executive Committee and the Finance Committee. Our
Audit Committee, Compensation Committee and Nominating/Corporate Governance
Committee each operate under a written charter adopted by the board of
directors, copies of which is available on our website at
www.americandairyinc.com. Our board of directors and its committees
set schedules to meet throughout the year and also can hold special meetings and
act by written consent from time to time, as appropriate. The
committees report on their activities and actions to the board of
directors.
Audit
Committee
Our Audit
Committee consists of Kirk G. Downing, James C. Lewis and Hui-Lan Lee, each of
whom is an independent director as defined by the listing standards of the NYSE
and SEC rules. The board of directors has determined that Ms. Lee is
an “Audit Committee Financial Expert,” as defined in Item 407(d)(5) of
Regulation S-K. Our Audit Committee appoints, retains, compensates
and oversees our independent public accountants and reviews the scope and
results of the annual audits, receives reports from our independent public
accountants, and reports the committee’s findings to the board of
directors.
Compensation
Committee Interlocks and Insider Participation
The
current members of our Compensation Committee are Leng You-Bin, Lee Hui-Lan, and
James C. Lewis. Except for Leng You-Bin, our Chairman, Chief
Executive Officer, President, and General Manager, none of the members of our
Compensation Committee is an officer or employee of our company. None
of our executive officers serve, or in the past year has served, as a member of
the board of directors or Compensation Committee of any entity that has one or
more executive officers serving on our board of directors or Compensation
Committee. See “Certain Relationships and Related
Transactions—Transactions with Related Persons” below for a summary of related
party transactions involving Mr. Leng.
Executive
Officers
The
following table sets forth the name and age of each of our executive officers,
the positions and offices held by each executive officer with us, and the period
during which the executive officers has served as one of our executive
officers. All officers serve at the pleasure of the board of
directors.
Name
|
Age
|
Position
|
Officer Since
|
|||
Leng
You-Bin
|
44
|
Chairman,
Chief Executive Officer, President, and General Manager
|
2003
|
|||
Liu
Hua
|
36
|
Vice
Chairman, Secretary, Treasurer, and Director
|
2003
|
|||
Jonathan
H. Chou
|
45
|
Chief
Financial Officer
|
2008
|
|||
Liu
Sheng-Hui
|
39
|
Vice
President of Finance, Feihe Dairy, and Director
|
2003
|
|||
Nie
Bo
|
37
|
Head
of Sales and Marketing
|
2007
|
Leng
You-Bin’s biographical summary is included under “— Directors”
above.
15
Liu Hua’s
biographical summary is included under “— Directors” above.
Jonathan H.
Chou has been our Chief Financial Officer since April
2008. From February 2006 to June 2007, Mr. Chou served as the Asia
Pacific Corporate Chief Financial Officer and Vice President of Mergers &
Acquisitions for Honeywell International. From September 2003 to June 2006, Mr.
Chou served as the Asia Regional Chief Financial Officer of Tyco Fire &
Security (ADT), a division of Tyco International. From May 2000 to September
2003, Mr. Chou served the Asia Pacific Chief Financial Officer of Lucent
Technologies, where he oversaw regional Sarbanes-Oxley compliance and
restructuring efforts during the downturn of the telecommunication sector. Mr.
Chou received a bachelor’s degree in arts from the State University of New York
at Buffalo and a Masters of Business Administration degree from Fuqua School of
Business at Duke University.
Liu
Sheng-Hui’s biographical summary is included under “— Directors”
above.
Nie Bo has
been our Head of Sales and Marketing since July 2007. From November
2006 to July 2007, Mr. Nie served as Vice General Manager and National Sales
Director for Anlijia Dairy (Beijing) Limited, a dairy company. From
February 2003 to November 2006, Mr. Nie served as National Sales Director for
Inner Mongolia Yili Industrial Group Co., Ltd., a large dairy company in
China. From October 2001 to February 2003, Mr. Nie served as Manager
of North China Region for Anyi Dairy, a large New Zealand dairy enterprise. From
October 1998 to September 2001, Mr. Nie served as Manager Assistant and Regional
Sales Manager for Meadow Gold Investment Co., Ltd., a multinational dairy
products company. Mr. Nie received a bachelor’s degree in thermal
engineering from Central South University of Technology in Hunan Province,
China.
Consultants
We may
retain compensation consultants to the extent we deem it necessary and
appropriate. We do not expect to delegate our authority and
responsibility to make management decisions to consultants or any other persons,
or for any consultant to have any discretionary authority or the authority to
bind us in any material respect.
16
CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS
Transactions
with Related Persons
Pike
Capital Partners, L.P. and its affiliate Pike Capital Partners (QP) LP, or
collectively the Pike Entities, beneficially owned in excess of 5% of our issued
and outstanding common stock during our fiscal years ended December 31, 2007 and
2008. In July and August 2007, in accordance with the terms our 7.50%
Series B Convertible Notes due 2007, or the Series B Notes, we issued an
aggregate of 575,000 shares of our common stock upon conversion of $5.0 million
in principal amount plus $750,000 in accrued and unpaid interest of our Series B
Notes, at a conversion price of $10.00 per share, to the Pike
Entities.
Citadel
Equity Fund Ltd, or Citadel, beneficially owned in excess of 5% of our issued
and outstanding common stock during our fiscal years ended December 31, 2007 and
2008. Citadel purchased $60.0 million in principal amount of our 2012
Notes and is a party to the notes purchase agreement, indentures, supplemental
indenture, and the agreements relating to our 2012 Notes. Pursuant to
the supplemental indenture, Citadel has elected that we repurchase all of its
2012 Notes, at a repurchase price of 115% of the principal amount of its 2012
Notes, or $69.0 million. Pursuant to these agreements, Leng You-Bin,
our Chairman, Chief Executive Officer, President, and General Manager, pledged
2,664,340 shares he holds of our common stock to secure the 2012
Notes. In addition, pursuant to the agreements relating to our 2009
Notes, Mr. Leng pledged 2,664,340 shares he holds of our common stock to secure
the 2009 Notes. We have made all of the repurchase payments to
Citadel.
Leng
You-Bin, our Chairman, Chief Executive Officer, President, and General Manager,
is also the founder of a Heilongjiang Feihe Dairy Educational Charitable
Foundation, or HFDECF, charitable organization for under-privileged children in
the Heilongjiang Province of the PRC. We have an outstanding loan
payable to HFDECF, which is unsecured, accrues interest at an annual rate of
5.85%, and is payable on demand. In 2008, the largest aggregate
amount of the indebtedness outstanding, including accrued interest, was
approximately $253,000.
Sequoia
Capital China Growth Fund I, L.P., and certain of its affiliates, or
collectively Sequoia, beneficially owned in excess of 10% of our issued and
outstanding common stock as of October 1, 2009. Additionally, Neil
Nanpeng Shen, one of our directors, is the founding Managing Partner of one of
the Sequoia entities. Sequoia is a party to the Subscription
Agreement, pursuant to which we issued 2,100,000 shares of our common stock for
an aggregate purchase price of $63.0 million, including $47.0 million in cash
and the conversion of a $16.0 million bridge loan we previously received from
Sequoia in July 2009.
Pursuant
to the Subscription Agreement, we have agreed, for a period of three years
following the Closing Date, not to issue new shares of our common stock at a
price below $30.00 per share without the prior written consent of a majority in
interest of Sequoia, subject to certain exceptions. In addition, we
agreed to grant each of the Sequoia entities a participation right to purchase
up to such person’s pro rata share of any new securities we may, from time to
time, propose to issue after the Closing Date, subject to certain
exceptions. If we fail to meet certain earnings per share targets for
2009 and 2010, we have agreed to issue additional shares of common stock to
Sequoia in proportion to the amount by which we fail to meet the target, up to a
maximum amount of 525,000 shares. If the average of closing prices of our common
stock for the fifteen trading days commencing on the third anniversary of the
Closing Date is less than $39.00, Sequoia will have the right to cause us to
repurchase all (but not less than all) of the securities acquired by Sequoia in
connection with the Subscription Agreement. The repurchase price
would be 100% of the initial purchase price if the 2009 and 2010 earnings per
share targets are met, or 130% of such price if such targets are not
met.
In
connection with the Subscription Agreement, we also entered into a registration
rights agreement with Sequoia, or the Registration Rights
Agreement. The Registration Rights Agreement requires us to file
within 15 days after the Closing Date a registration statement covering the
resale of the securities issued or issuable pursuant to the Subscription
Agreement. The Registration Rights Agreement also grants demand and
piggyback registration rights.
Review,
Approval or Ratification of Transactions with Related Persons
Although
we have not adopted formal procedures for the review, approval or ratification
of transactions with related persons, we adhere to a general policy that such
transactions should only be entered into if they are on terms that, on the
whole, are no more favorable, or no less favorable, than those available from
unaffiliated third parties and their approval is in accordance with applicable
law. Such transactions require the approval of our board of
directors.
17
PRINCIPAL
SHAREHOLDERS
Security
Ownership of Certain Beneficial Owners and Management and Related Shareholder
Matters
The
following table sets forth, as of October 1, 2009, information concerning the
beneficial ownership of shares of our common stock held by our directors, our
executive officers, our directors and executive officers as a group, and each
person known by us to be a beneficial owner of 5% or more of our outstanding
common stock.
Beneficial
ownership is determined according to the rules of the SEC. Beneficial
ownership means that a person has or shares voting or investment power of a
security and includes any securities that person has the right to acquire within
60 days after the measurement date, such as pursuant to options, warrants or
convertible notes. Except as otherwise indicated, we believe that
each of the beneficial owners of our common stock listed below, based on
information each of them has given to us, has sole investment and voting power
with respect to such beneficial owner’s shares, except where community property
or similar laws may apply. For purposes of the column for shares
underlying convertible securities, in accordance with rules of the SEC, shares
of our common stock underlying securities that a person has the right to acquire
within 60 days of October 1, 2009 are deemed to be beneficially owned by such
person for the purpose of computing the percentage ownership of that person, but
we do not treat them as outstanding for the purpose of computing the ownership
percentage of any other person.
|
Common Stock Beneficially Owned
|
|||||||||||||||
Name and Address of Beneficial Owner
|
Total
Outstanding
|
Shares
Underlying
Convertible
Securities (1)
|
Total
|
Percent (2)
|
||||||||||||
Directors
and Executive Officers
|
||||||||||||||||
Leng
You-Bin (3)
|
8,900,135
|
0
|
8,900,135
|
41.1
|
%
|
|||||||||||
Liu
Hua (3)
|
27,200
|
0
|
27,200
|
*
|
||||||||||||
Jonathan
H. Chou (3)
|
0
|
80,000
|
80,000
|
*
|
||||||||||||
Liu
Sheng-Hui (3)
|
287,774
|
0
|
287,774
|
1.3
|
%
|
|||||||||||
Hui-Lan
Lee (3)
|
39,500
|
0
|
39,500
|
*
|
||||||||||||
Kirk
Downing (3)
|
8,000
|
0
|
8,000
|
*
|
||||||||||||
James
C. Lewis (3)(4)
|
35,000
|
0
|
35,000
|
*
|
||||||||||||
Nie
Bo (3)
|
0
|
0
|
0
|
0
|
%
|
|||||||||||
Neil
Nanpeng Shen (5)
|
1,525,033
|
0
|
1,525,033
|
7.0
|
%
|
|||||||||||
Directors
and executive officers as a group (9 persons)
|
10,822,642
|
80,000
|
10,902,642
|
50.3
|
%
|
|||||||||||
5%
Beneficial Owners
|
||||||||||||||||
Entities
associated with Pike Capital Partners (6)
|
1,500,000
|
250,000
|
1,750,000
|
8.1
|
%
|
|||||||||||
275
Madison Avenue, Suite 418
|
||||||||||||||||
New
York, NY 10016
|
||||||||||||||||
River
Road Asset Management (7)
|
1,092,294
|
0
|
1,092,294
|
5.0
|
%
|
|||||||||||
462
S. 4th Street, Suite 1600
|
||||||||||||||||
Louisville,
KY 40202
|
||||||||||||||||
Entities
associated with Sequoia Capital China Growth Fund I, L.P.
(8)
|
2,191,700
|
0
|
2,191,700
|
10.1
|
%
|
|||||||||||
Suite
2215, Two Pacific Place
|
||||||||||||||||
88
Queensway
|
||||||||||||||||
Hong
Kong, PRC
|
||||||||||||||||
3000
Sand Hill Road, 4-250
|
||||||||||||||||
Menlo
Park, CA 94250, USA
|
* Less
than 1%
(1)
|
Includes
shares of our common stock issuable upon exercise of options or warrants
or upon conversion of convertible notes, if the person has the right to
acquire such shares within 60 days of October 1,
2009.
|
(2)
|
Based
on 21,671,730 shares of our common stock outstanding as of October 1,
2009.
|
18
(3)
|
The
address for this beneficial owner is c/o American Dairy, Star City
International Building, 10 Jiuxianqiao Road, C-16th Floor, Chaoyang
District, Beijing, China 100016.
|
(4)
|
James
C. Lewis holds such shares jointly with his
spouse.
|
(5)
|
The
address for this beneficial owner is Suite 2215, Two Pacific Place, 88
Queensway, Hong Kong, PRC. Consists of 78,760 shares of our
common stock held by Sequoia Capital China I, L.P. (“SCC I”),
9,050 shares of our common stock held by Sequoia Capital China
Partners Fund I, L.P. (“SCC PTRS I”), 12,190 shares of our common
stock held by Sequoia Capital China Principals Fund I, L.P. (“SCC
PRIN I”), 1,242,914 shares of our common stock held by Sequoia
Capital China Growth Fund I, L.P. (SCCGF I”), 29,641 shares of our
common stock held by Sequoia Capital China Growth Partners Fund I, L.P.
(SCCGF PTRS I”), and 152,478 shares of our common stock held by
Sequoia Capital China GF Principals Fund I, L.P. (SCCGF PRIN
I”). Sequoia Capital China Management I, L.P. (“SCC MGMT I”) is
a general partner of SCC I, SCC PTRS I and SCC PRIN I. Sequoia
Capital China Growth Fund Management I, L.P. (“SCCGF MGMT I”) is a general
partner of SCCGF I, SCCGF PTRS I and SCCGF PRIN I. SC China
Holding Limited (“SCC HOLD”) is a general partner of SCC MGMT I and SCCGF
MGMT I. Neil Nanpeng Shen is a Managing Director of SCC HOLD
and, in such capacity, has voting and dispositive power over such
shares. Neil Nanpeng Shen disclaims beneficial ownership of all
such shares except to the extent of his individual pecuniary interest
therein.
|
(6)
|
Consists
of 1,324,026 shares of our common stock and warrants to purchase 219,514
shares of our common stock held by Pike Capital Partners (QP) LP
(“PCPQP”), and 175,974 shares of our common stock and warrants to purchase
30,486 shares of our common stock held by Pike Capital Partners LP
(“PCP”). Pike Capital Management LLC (“PCM”) is the general
partner of PCPQP and of PCP. Daniel W. Pike is the managing
member of PCM and, in such capacity, has voting and dispositive power over
such shares.
|
(7)
|
Thomas
D. Mueller is the Chief Operating officer and Chief Compliance Officer of
River Road Asset Management, LLC, and, in such capacity, has voting and
dispositive power over such shares.
|
(8)
|
Consists
of 78,760 shares of our common stock held by SCC I, 9,050 shares of
our common stock held by SCC PTRS I, 12,190 shares of our common
stock held by SCC PRIN I, 1,242,914 shares of our common stock
held by SCCGF I, 29,641 shares of our common stock held by SCCGF
PTRS I, 152,478 shares of our common stock held by SCCGF PRIN I, and
666,667 shares of our common stock held by Sequoia Capital U.S. Growth
Fund IV, L.P. (“SCGF IV”). SCC MGMT I is a general partner of
SCC I, SCC PTRS I and SCC PRIN I. SCCGF MGMT I is a general
partner of SCCGF I, SCCGF PTRS I and SCCGF PRIN I. SCGF IV
Management, L.P. (“SCGF MGMT IV”) is a general partner of SCGF
IV. SCC HOLD is a general partner of SCC MGMT I and SCCGF
MGMT I. SCGF GenPar, Ltd (“SCGF GP”) is a general partner of
SCGF MGMT IV. Neil Nanpeng Shen and Kui Zhou are Managing
Directors of SCC HOLD and, in such capacity, have voting and dispositive
power over such shares. Michael Moritz and Douglas Leone are
Managing Directors of SCGF GP and, in such capacity, have voting and
dispositive power over such shares. SCC MGMT I, SCCGF MGMT I,
SCC HOLD, SCGF MGMT IV, SCGF GP, Neil Nanpeng Shen, Kui Zhou, Michael
Moritz and Douglas Leone disclaim beneficial ownerships of all such shares
except to the extent of their respective individual pecuniary interest
therein.
|
The
following table sets forth information regarding issuances of securities
pursuant to equity compensation plans as of December 31, 2008.
Plan Category
|
Number of securities
issued and to be
issued upon exercise
of outstanding
options, warrants
and rights
|
Weighted-
average exercise
price of
outstanding
options,
warrants and
rights
|
Number of
securities
remaining
available for
future issuance
|
||||
Equity
compensation plans approved by security holders
|
454,020
|
$
|
20.30
|
2,545,980
|
|||
Total
|
454,020
|
$
|
20.30
|
2,545,980
|
19
OTHER
INFORMATION REGARDING THE COMPANY
Additional
information regarding our business, properties, legal proceedings, equity
compensation plans, financial statements, changes in and disagreements with the
accountants on accounting and financial disclosure, and our “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” is
incorporated in this prospectus by reference to our Annual Report on
Form 10-K for the fiscal year ended December 31, 2008 and our
Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2009
and June 30, 2009, each as amended.
Additional
information regarding our executive compensation, board compensation, severance
and control agreements, Section 16(b) beneficial ownership reporting compliance
is incorporated in this prospectus by reference to our definitive proxy
statement filed with the SEC on June 8, 2009.
20
SELLING
SHAREHOLDERS
This
prospectus relates to the resale, by the selling shareholders named below,
of up to 2,647,542 shares of our common stock issued or issuable to the selling
shareholders, including 2,100,000 shares of our common stock issued to the
selling shareholders on August 26, 2009 pursuant to the Subscription Agreement,
up to 525,000 Performance Shares, and up to 22,542 Warrant Shares.
In
connection with the Subscription Agreement, Neil Nanpeng Shen, the founding
Managing Partner of Sequoia Capital China, one of the selling shareholders named
below, was appointed as a member of our board of directors on August 26,
2009.
The
following table sets forth the number of shares beneficially owned by each of
the selling shareholders as of October 1, 2009. Except as disclosed
under this prospectus, none of the selling shareholders has held a position or
office or had a material relationship with us within the past three years other
than as a result of the ownership of our common stock or other securities of
ours. The selling shareholders may offer the shares under this
prospectus from time to time and may elect to sell none, some or all of the
shares set forth next to their names.
Beneficial
ownership is determined in accordance with rules promulgated by the SEC, and the
information is not necessarily indicative of beneficial ownership for any other
purpose. This table is based upon information supplied to us by the selling
shareholders and information filed with the SEC. Except as otherwise indicated,
we believe that each selling shareholder has sole voting and investment power
with respect to all shares of the common stock shown as beneficially owned by
it. The percentage of the selling shareholders’ beneficial ownership after the
offering is based on 21,694,272 shares of our common stock issued and
outstanding assuming the Performance Shares are not issued and assuming the
issuance of all Warrant Shares.
We may
amend or supplement this prospectus from time to time in the future to update or
change this list and shares which may be resold.
Selling Shareholder
|
Number of
Shares
of Common
Stock
Beneficially
Owned
Prior to
the Offering
|
Number of
Shares
Registered
for
Sale Hereby
|
Number of
Shares
of Common
Stock
to be Beneficially
Owned after
Completion of
the
Offering (1)
|
Percentage of
Shares to
be Beneficially
Owned after
Completion of
the
Offering (1)
|
|||||||
Sequoia
Capital China I, L.P.
(2)
|
78,760
|
78,760
|
0
|
0.0
|
%
|
||||||
Sequoia
Capital China Partners Fund I, L.P. (3)
|
9,050
|
9,050
|
0
|
0.0
|
%
|
||||||
Sequoia
Capital China Principals Fund I, L.P. (4)
|
12,190
|
12,190
|
0
|
0.0
|
%
|
||||||
Sequoia
Capital China Growth Fund I, L.P. (5)
|
1,242,914
|
1,162,933
|
79,981
|
*
|
|||||||
Sequoia
Capital China Growth Partners Fund I, L.P. (6)
|
29,641
|
27,733
|
1,908
|
*
|
|||||||
Sequoia
Capital China GF Principals Fund I, L.P. (7)
|
152,478
|
142,667
|
9,811
|
*
|
|||||||
Sequoia
Capital U.S. Growth Fund IV, L.P. (8)
|
666,667
|
666,667
|
0
|
0.0
|
%
|
||||||
David
W. Unsworth Jr.
(9)
|
22,542
|
22,542
|
0
|
0.0
|
%
|
* Less
than 1%
(1)
|
We
do not know when or in what amounts the selling shareholders will offer
shares for sale, if at all. The selling shareholders may sell any or all
of the shares included in and offered by this prospectus. Because the
selling shareholder may offer all or some of the shares pursuant to this
offering, we cannot estimate the number of shares that will be held by the
selling shareholders after completion of the offering. However, for
purposes of this table, we have assumed that after completion of the
offering all of the securities registered will be sold by the selling
shareholders. The percentage of shares to be beneficially owned after
completion of the offering is calculated on the basis of 21,694,272 shares
of our common stock issued and outstanding following completion of the
offering and sale by the selling
shareholders.
|
(2)
|
SCC
MGMT I is a general partner of SCC I. SCC HOLD is a general
partner of SCC MGMT I. Neil Nanpeng Shen and Kui Zhou are
Managing Directors of SCC HOLD. SCC MGMT I, SCC HOLD, Neil
Nanpeng Shen and Kui Zhou disclaim beneficial ownerships of all such
shares except to the extent of their respective individual pecuniary
interest therein.
|
21
(3)
|
SCC
MGMT I is a general partner of SCC PTRS I. SCC HOLD is a
general partner of SCC MGMT I. Neil Nanpeng Shen and Kui Zhou
are Managing Directors of SCC HOLD. SCC MGMT I, SCC HOLD, Neil
Nanpeng Shen and Kui Zhou disclaim beneficial ownerships of all such
shares except to the extent of their respective individual pecuniary
interest therein.
|
(4)
|
SCC
MGMT I is a general partner of SCC PRIN I. SCC HOLD is a
general partner of SCC MGMT I. Neil Nanpeng Shen and Kui Zhou
are Managing Directors of SCC HOLD. SCC MGMT I, SCC HOLD,
Neil Nanpeng Shen and Kui Zhou disclaim beneficial ownerships of all such
shares except to the extent of their respective individual pecuniary
interest therein.
|
(5)
|
SCCGF
MGMT I is a general partner of SCCGF I. SCC HOLD is a general
partner of SCCGF MGMT I. Neil Nanpeng Shen and Kui Zhou
are Managing Directors of SCC HOLD. SCCGF MGMT I, SCC
HOLD, Neil Nanpeng Shen and Kui Zhou disclaim beneficial ownerships of all
such shares except to the extent of their respective individual pecuniary
interest therein.
|
(6)
|
SCCGF
MGMT I is a general partner of SCCGF PTRS I. SCC HOLD is a
general partner of SCCGF MGMT I. Neil Nanpeng Shen and Kui Zhou
are Managing Directors of SCC HOLD. SCCGF MGMT I, SCC HOLD,
Neil Nanpeng Shen and Kui Zhou disclaim beneficial ownerships of all such
shares except to the extent of their respective individual pecuniary
interest therein.
|
(7)
|
SCCGF
MGMT I is a general partner of SCCGF PRIN I. SCC
HOLD is a general partner of SCCGF MGMT I. Neil Nanpeng Shen
and Kui Zhou are Managing Directors of SCC HOLD. SCCGF MGMT I,
SCC HOLD, Neil Nanpeng Shen and Kui Zhou disclaim beneficial ownerships of
all such shares except to the extent of their respective individual
pecuniary interest therein.
|
(8)
|
SCGF
MGMT IV is a general partner of SCGF IV. SCGF GP is a
general partner of SCGF MGMT IV. Michael Moritz and Douglas
Leone are Managing Directors of SCGF GP. SCGF MGMT IV, SCGF GP,
Michael Moritz and Douglas Leone disclaim beneficial ownerships of all
such shares except to the extent of their respective individual pecuniary
interest therein.
|
(9)
|
Consists
of 22,542 shares of our common stock issuable upon exercise of a warrant,
at an exercise price of $1.50 per share, issued to David W. Unsworth Jr.
in June 2005 as compensation for investment banking services.
David W. Unsworth
Jr. is a principal of Legend Merchant Group, Inc., which is a registered
broker-dealer. As such, David W. Unsworth Jr. may be deemed an
underwriter of the Warrant
Shares.
|
22
DESCRIPTION
OF SECURITIES TO BE REGISTERED
General
As of
October 1, 2009, our authorized capital stock consisted of 50,000,000 shares of
common stock, par value $0.001 per share. As of October 1, 2009, 21,671,730
shares of our common stock were issued and outstanding, all of which were fully
paid and non-assessable. As of October 1, 2009, there were approximately 430
record holders of our common stock. This does not include the number of
beneficial owners whose stock is in nominee or street name accounts through
brokers. The closing price of our common stock as reported on the NYSE on
October 1, 2009, was $27.08 per share.
Set forth
below is a summary description of certain material terms of our common stock.
This description is qualified in its entirety by reference to our articles of
incorporation, as amended, and bylaws, each of which is filed as an exhibit to
this registration statement.
Common
Stock
Holders
of our common stock are entitled to one vote for each share held on all matters
voted upon by shareholders, including the election of directors. The holders of
common stock have no preemptive rights to purchase or subscribe for any stock of
American Dairy now or hereafter authorized or for securities convertible into
such stock. Holders of common stock have no rights to convert their common stock
into any other securities, and there are no redemption or sinking fund
provisions applicable to the common stock. All of the outstanding shares of our
common stock are fully paid and nonassessable. Upon any liquidation of American
Dairy, the holders of our common stock are entitled to share ratably in assets
available for distribution to shareholders. Holders of common stock are entitled
to receive dividends out of assets legally available therefore at such times and
in such amounts as our board of directors may from time to time
determine.
Shareholders
are not entitled to cumulative voting rights and, accordingly, the holders of a
majority of the voting power of the shares voting for the election of directors
can elect the entire class of directors to be elected each year if they choose
to do so and, in that event, the holders of the remaining shares will not be
able to elect any person as a director of such class.
Warrant
In June
2005, as compensation for investment banking services, we issued a warrant to
acquire 25,242 shares of our common stock to a selling shareholder at an
exercise price of $1.50 per share. The warrant is exercisable until
October 25, 2009. The exercise price of the warrant is subject to
adjustment to provide certain anti-dilution protections to holder. In
accordance with the terms of the warrant, the selling shareholder previously
acquired 2,700 of the shares issuable upon exercise of the warrant, and the
remaining 22,542 shares issuable upon exercise of the warrant are included in
the registration statement of which this prospectus forms a part.
Transfer
Agent and Registrar
The
transfer agent and registrar for American Dairy is Progressive Transfer Co.,
1981 Murray Holladay Road, Suite 100, Salt Lake City, Utah 84117-5148; telephone
1 (801) 272-9294.
Listing
Our
common stock is listed on the NYSE under the symbol “ADY.”
23
PLAN
OF DISTRIBUTION
Each
selling shareholder of the common stock and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock included in this prospectus on any stock exchange, market or
trading facility on which the shares are traded or in private transactions.
These sales may be at fixed or negotiated prices. A selling shareholder may use
any one or more of the following methods when selling shares:
•
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
•
|
block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
•
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for its
account;
|
•
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
•
|
privately
negotiated transactions;
|
•
|
settlement
of short sales entered into after the effective date of the registration
statement of which this prospectus is a
part;
|
•
|
broker-dealers
may agree with the selling shareholders to sell a specified number of such
shares at a stipulated price per
share;
|
•
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or
otherwise;
|
•
|
a
combination of any such methods of sale;
or
|
•
|
any
other method permitted pursuant to applicable
law.
|
The
selling shareholders may also sell shares under Rule 144 under the Securities
Act, if available, rather than under this prospectus.
Broker-dealers
engaged by the selling shareholders may arrange for other brokers-dealers to
participate in sales. Broker-dealers may receive commissions or discounts from
the selling shareholders (or, if any broker-dealer acts as agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated, but,
except as set forth in a supplement to this prospectus, in the case of an agency
transaction not in excess of a customary brokerage commission in compliance with
the Financial Industry Regulatory Authority’s, or FINRA, NASD Rule 2440; and in
the case of a principal transaction a markup or markdown in compliance with
FINRA’s NASD IM-2440.
In
connection with the sale of the common stock or interests therein, the selling
shareholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the common
stock in the course of hedging the positions they assume. The selling
shareholders may also sell shares of the common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The selling
shareholders may also enter into option or other transactions with
broker-dealers or other financial institutions for the creation of one or more
derivative securities that require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such
transaction).
The
selling shareholders and any broker-dealers or agents that are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. One of the selling
shareholders is affiliated with a registered broker-dealer and received a
warrant pursuant to which the Warrant Shares are issuable in June 2005 as
compensation for investment banking services. In the event such
persons may be deemed to be “underwriters,” any commissions received by
such broker-dealers or agents and any profit on the resale of the shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. Each selling shareholder has informed us that it does
not have any written or oral agreement or understanding, directly or indirectly,
with any person to distribute the common stock. In no event shall any
broker-dealer receive fees, commissions and markups that, in the aggregate,
would exceed eight percent (8%).
24
We are
paying the cost of registering the shares covered by this prospectus as well as
various related expenses, although the holder of the Warrant Shares is paying
our legal expenses relating to registering the Warrant Shares. We have agreed to
indemnify Sequoia against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act.
Because
the selling shareholders may be deemed to be “underwriters” within the meaning
of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act, including Rule 172 thereunder. In addition,
any securities covered by this prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under Rule 144 rather than under
this prospectus. There is no underwriter or coordinating broker acting in
connection with the proposed sale by the selling shareholders of the shares
registered hereunder.
With
respect to the shares issued or issuable to Sequoia, we have agreed to keep this
prospectus effective pursuant to Rule 415 under the Securities Act until the
earlier of (i) the date on which all the shares registered hereunder have been
sold, (ii) the date on which all the shares registered hereunder are eligible to
be sold pursuant to Rule 144 without limitations as to volume, or (iii) August
26, 2012. We are under no obligation to keep this prospectus
effective with respect to the Warrant Shares and may, in our sole and exclusive
discretion at any time and for any reason, determine not to include the Warrant
Shares in the registration statement of which the prospectus forms a
part.
Under
applicable rules and regulations under the Exchange Act any person engaged in
the distribution of the shares registered hereunder may not simultaneously
engage in market making activities with respect to the common stock for the
applicable restricted period, as defined in Regulation M, prior to the
commencement of the distribution. In addition, the selling shareholders will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including Regulation M, which may limit the timing of
purchases and sales of shares of the common stock by the selling shareholders or
any other person. We will make copies of this prospectus available to the
selling shareholders and have informed them of the need to deliver a copy of
this prospectus to each purchaser at or prior to the time of the sale (including
by compliance with Rule 172 under the Securities Act).
25
LEGAL
MATTERS
DLA Piper
LLP (US), Seattle, Washington, will issue a legal opinion as to the validity of
the issuance of the shares of common stock offered under this
prospectus.
EXPERTS
The
financial statements as of December 31, 2008 and 2007 and for each of the two
years in the period ended December 31, 2008 incorporated by reference in this
prospectus and elsewhere in the registration statement have been so included in
reliance on the report of Grant Thornton, the Hong Kong member firm of Grant
Thornton International Ltd., an independent registered public accounting firm,
upon the authority of said firm as experts in auditing and
accounting.
INTERESTS
OF NAMED EXPERTS AND COUNSEL
No expert
or counsel named in this prospectus as having prepared or certified any part of
this prospectus or having given an opinion upon the validity of the securities
being registered or upon other legal matters in connection with the registration
or offering of the shares of common stock was employed on a contingency basis or
had, or is to receive, in connection with the offering, a substantial interest,
directly or indirectly, in the registrant nor was any such person connected with
the registrant as a promoter, managing or principal underwriter, voting trustee,
director, officer or employee.
MATERIAL
CHANGES
There
have been no material changes since December 31, 2008 that have not been
described in our Annual Report on Form 10-K, this prospectus, our Quarterly
Reports on Form 10-Q for the quarterly periods ended March 31, 2009 and June 30,
2009, and our Current Reports on Form 8-K, in each case as amended.
WHERE
YOU CAN FIND MORE INFORMATION
Our
website is www.americandairyinc.com. We provide free access to
various reports that we file with, or furnish to, the SEC through our website,
as soon as reasonably practicable after they have been filed or
furnished. These reports include, but are not limited to, our Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form
8-K, and any amendments to those reports. Also available on our
website are printable versions of our Code of Business Conduct and Ethics and
charters of our Audit Committee, Compensation Committee, Nominating/Corporate
Governance Committee and other committees of our board of
directors. Information on our website does not constitute part of and
is not incorporated by reference into this prospectus, the registration
statement of which it forms a part, or any other report we file or furnish with
the SEC (except to the extent such information is expressly incorporated by
reference herein or therein). Our SEC reports can also be accessed
through the SEC’s website at www.sec.gov and may be read or copied at the SEC’s
Public Reference Room located at 100 F Street, NE, Washington, D.C.,
20549. Information regarding the Public Reference Room may be
obtained by calling the SEC at 1-800-SEC-0330.
26
INCORPORATION
OF CERTAIN INFORMATION BY REFERENCE
We are
“incorporating by reference” certain documents we file with the SEC, which means
that we can disclose important information to you by referring you to those
documents. The information in the documents incorporated by reference is
considered to be part of this prospectus. Statements contained in documents that
we file with the SEC and that are incorporated by reference in this prospectus
will automatically update and supersede information contained in this
prospectus, including information in previously filed documents or reports that
have been incorporated by reference in this prospectus, to the extent the new
information differs from or is inconsistent with the old information. Except as
set forth below, the SEC file number for the documents incorporated by reference
in this prospectus is 001-32473.
We have
filed the following documents with the SEC and they are incorporated herein by
reference as of their respective dates of filing:
·
|
Our
Annual Report on Form 10-K for the fiscal year ended December 31,
2008, as filed with the SEC on April 15, 2009, as amended by Amendment No.
1 to Form 10-K, filed with the SEC on June 26, 2009, and by Amendment No.
2 to Form 10-K, filed with the SEC on July 24,
2009;
|
·
|
Our
Quarterly Report on Form 10-Q for the quarterly periods ended
March 31, 2009, as filed with the SEC on May 14, 2009, as amended by
Amendment No. 1 to Form 10-Q, filed with the SEC on June 26, 2009, and our
Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2009, as filed with the SEC on August 14,
2009;
|
·
|
Our
definitive proxy statement, as filed with the SEC on June 8, 2009;
and
|
·
|
Our
Current Reports on Form 8-K, as filed with the SEC on March 26, 2009,
April 15, 2009, May 13, 2009 (as amended by Amendment No. 1 to Form
8-K, filed with the SEC on May 14, 2009), May 14, 2009, May 26, 2009, June
4, 2009, June 9, 2009, June 22, 2009, June 25, 2009, July 13, 2009, August
5, 2009, August 12, 2009, August 14, 2009, August 26, 2009, September 1,
2009, and September 16,
2009.
|
A
statement contained in a document incorporated by reference into this prospectus
shall be deemed to be modified or superseded for purposes of this prospectus to
the extent that a statement contained in this prospectus, any prospectus
supplement or in any other subsequently filed document which is also
incorporated in this prospectus modifies or replaces such statement. Any
statements so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
You may
request a copy of these documents, which will be provided to you at no cost, by
writing or telephoning us using the following contact information:
American
Dairy, Inc.
2275
Huntington Drive #278
San
Marino, CA 91108
Telephone:
+1 (626) 757-8885
You may
also access these documents on our website at
www.americandairyinc.com.
You
should rely only on the information contained in this prospectus, including
information incorporated by reference as described above, or any prospectus
supplement or that we have specifically referred you to. We have not authorized
anyone else to provide you with different information. You should not assume
that the information in this prospectus or any prospectus supplement is accurate
as of any date other than the date on the front of those documents or that any
document incorporated by reference is accurate as of any date other than its
filing date. You should not consider this prospectus to be an offer or
solicitation relating to the securities in any jurisdiction in which such an
offer or solicitation relating to the securities is not authorized. Furthermore,
you should not consider this prospectus to be an offer or solicitation relating
to the securities if the person making the offer or solicitation is not
qualified to do so, or if it is unlawful for you to receive such an offer or
solicitation.
27
American
Dairy, Inc.
2,647,542
Shares of Common Stock
Prospectus
[______________],
2009
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
13. Other
Expenses of Issuance and Distribution.
The
following table sets forth the estimated costs and expenses in connection with
the sale and distribution of the securities being registered, other than
underwriting discounts and commissions. All of the amounts shown are estimates
except the SEC registration fees.
|
To be Paid
by the
Registrant
|
|||
SEC
registration fees
|
$
|
4,500
|
||
Legal
fees and expenses
|
$
|
100,000
|
||
Accounting
fees and expenses
|
$
|
20,000
|
||
Printing
and engraving expenses
|
$
|
5,000
|
||
Transfer
agent’s fees
|
$
|
5,000
|
||
Miscellaneous
fees and expenses
|
$
|
5,000
|
||
Total
|
$
|
139,500
|
Item
14.
Indemnification and Limited Liability
Section
16-10a-840 of the Utah Revised Business Corporation Act, or the URBC, requires
directors and officers to perform their duties in good faith and with the care
that an ordinary person would exercise under similar circumstances in a manner
reasonably believed to be in the best interest of the corporation. A director or
officer of a corporation is not liable to the corporation, its shareholders or
others for any action taken or any failure to act as an officer or director
unless he has breached or failed to perform his duties as described above and
the breach or failure to perform constitutes gross negligence, willful
misconduct, or intentional infliction of harm on the corporation or its
shareholders.
Section
16-10a-841 of the URBC provides that the articles of incorporation of a Utah
corporation may eliminate or limit the liability of a director to the
corporation or its shareholders for monetary damages, except for (i) a financial
benefit to which is not entitled; (ii) an intentional infliction of harm; (iii)
unlawful distributions of the corporation constituting a violation of Section
16-10a-842 of the URBC; or (iv) an intentional violation of criminal
law.
Section
16-10a-902 of the URBC permits a Utah corporation to indemnify directors made a
party to a proceeding because he is or was a director if (i) his conduct was in,
or not opposed to, the corporation’s best interest; and (ii) he reasonably
believed his conduct was in, or not opposed to, the corporation’s best
interests; and (iii) in the case of a criminal proceeding, he had no reasonable
cause to believe his conduct was unlawful. However, a Utah corporation may not
indemnify a director if he was adjudged liable to the corporation, or if he was
adjudged liable on the basis that he derived an improper personal benefit; and
such indemnification in any action brought by the corporation is limited to
reasonable expenses incurred in connection with the proceedings.
Article
VI of our articles of incorporation, as amended, and Article VIII of our bylaws
provide for the indemnification of our directors and officers. Indemnification
is mandatory regarding reasonable expenses incurred in connection with
proceedings or claims with respect to which the director or officer has been
successful. Officers, employees, fiduciaries and agents of a Utah corporation
may be entitled to indemnification to a greater extent, if not inconsistent with
public policy or if provided for in a company’s articles of incorporation,
bylaws, general or specific action of its board of directors or
contract.
Item
15. Recent
Sales of Unregistered Securities
In June
2007, we issued an aggregate of $80.0 million in principal amount of our 2012
Notes, accruing interest at an annual rate of 1.0% and maturing in June 2012, to
accredited investors in offshore transactions not requiring registration under
the Securities Act pursuant to Regulation S, and pursuant to the exemptions from
registration under Section 4(2) of the Securities Act for transactions by an
issuer not involving any public offering.
II-2
In July
and August 2007, we issued an aggregate of 575,000 shares of our common stock
upon conversion of $5.0 million in principal amount plus $750,000 in accrued and
unpaid interest of our Series B Notes, at a conversion price of $10.00 per
share, to accredited investors pursuant to the exemptions from registration
under Section 3(a)(9) of the Securities Act for certain exchange offers and
Section 4(2) of the Securities Act for transactions by an issuer not involving
any public offering.
In
November 2008, pursuant to an agreement regarding our 2009 Notes, we issued to
holders of our 2009 Notes an aggregate amount of 216,639 shares of our common
stock. In connection with the agreement, we amended and restated the
2009 Notes and the warrants issued therewith. The amended and
restated 2009 Notes had an aggregate principal amount of $18.2 million, accrued
interest at an annual rate of 7.75%, had a maturity date in October,
2009, and were convertible at the option of the holder into shares of
our common stock at a conversion price of $14.50 per share. The
warrants issued with the amended and restated 2009 Notes permit the holders to
acquire approximately 251,000 shares of our common stock at an exercise price of
$14.50 per share at any time prior to October 2012. From July
2009 to October 2009, we issued an aggregate of 1,549,122 shares of our
common stock upon conversion of approximately $22.5 million in principal and
accrued and unpaid interest of our 2009 Notes. We issued these
securities pursuant to the exemptions from registration under Section 3(a)(9) of
the Securities Act for certain exchange offers and Section 4(2) of the
Securities Act for transactions by an issuer not involving any public
offering.
In
November 2008, we entered into a supplemental indenture with respect to the 2012
Notes, which amended the terms of the 2012 Notes to provide for our early
repurchase of the 2012 Notes and to provide certain waivers and consents to us,
in offshore transactions not requiring registration under the Securities Act
pursuant to Regulation S, and pursuant the exemptions from registration under
Section 3(a)(9) of the Securities Act for certain exchange offers and under
Section 4(2) of the Securities Act for transactions by an issuer not involving
any public offering.
From
January 2008 to the present, we have issued 8,000 restricted shares of our
common stock to each of our directors in consideration for their services to us,
and an additional 2,000 restricted shares of our common stock to Hui-Lan Lee, a
director and the chairperson of our Audit Committee. In addition,
from January 2008 to the present, we have issued 22,500 shares of our common
stock, and options to purchase up to an aggregate of 2,343,190 shares of our
common stock at exercise prices ranging from $12.00 to $30.00 per share, to
employees in consideration for their services to us. We issued these
securities in offshore transactions not requiring registration under the
Securities Act pursuant to Regulation S, and pursuant to the exemption from
registration under Section 4(2) of the Securities Act for transactions by an
issuer not involving any public offering.
On August
26, 2009, we issued 2,100,000 shares of our common stock to accredited investors
for an aggregate purchase price of $63.0 million, including $47.0 million in
cash and the conversion of a $16.0 million bridge loan, pursuant to the
exemptions from registration provided by Section 4(2) under the Securities Act
and Rule 506 promulgated thereunder for transactions by an issuer not involving
any public offering.
Item
16. Exhibits
and Financial Statement Schedules.
(a) Exhibits.
The
following exhibits are filed with this registration statement:
Incorporated by Reference
|
||||||||||||
Exhibit
No.
|
Exhibit Title
|
Filed
Herewith
|
Form
|
Exhibit
No.
|
File No.
|
Filing Date
|
||||||
2
|
Stock
Exchange Agreement, dated as of January 15, 2003, by and among the
registrant, its shareholders and Lazarus Industries,
Inc.
|
8-K
|
2.1
|
000-27351
|
1/21/03
|
|||||||
2.1
|
Amendment
to Stock Exchange Agreement, dated as of March 5, 2003, by and among the
registrant, its shareholders and Lazarus Industries,
Inc.
|
8-K/A
|
2.2
|
000-27351
|
3/5/03
|
|||||||
3.1
|
Articles
of Incorporation, as amended
|
10-SB
|
1
|
000-27351
|
9/16/99
|
|||||||
3.2
|
Amendment
to Articles of Incorporation
|
10-KSB/A
|
3.2
|
000-27351
|
5/25/04
|
|||||||
3.3
|
Bylaws
|
10-SB
|
2
|
000-27351
|
9/16/99
|
|||||||
4.1
|
Specimen
certificate evidencing shares of common stock
|
S-1/A
|
4.1
|
333-158777
|
5/28/09
|
|||||||
5.1
|
Legal
opinion of DLA Piper LLP (US)
|
X
|
|
II-3
Incorporated by Reference
|
||||||||||||
Exhibit
No.
|
Exhibit Title
|
Filed
Herewith
|
Form
|
Exhibit
No.
|
File No.
|
Filing Date
|
||||||
10.1
|
Consulting
Agreement, dated as of March 28, 2003, by and between the registrant and
Danbury Properties, L.L.C.
|
10-KSB
|
10.3
|
000-27351
|
4/05/04
|
|||||||
10.2
|
Stock
Purchase Agreement, dated as of March 28, 2003, by and among the
registrant, its shareholders and Lazarus Industries, Inc.
|
10-KSB
|
10.4
|
000-27351
|
4/15/04
|
|||||||
10.3
|
Joint
Venture Agreement to organize Beijing Feihe
|
10-QSB
|
10.1
|
000-27351
|
5/17/04
|
|||||||
10.4
|
2003
Stock Incentive Plan
|
S-8
|
10
|
333-123932
|
4/7/05
|
|||||||
10.5
|
Asset
Purchase Agreement, dated as of May 20, 2005, by and between the
registrant and Nutricia Nutritionals Co., Ltd.
|
8-K
|
10.1
|
001-32473
|
5/26/05
|
|||||||
10.6
|
RMB
Loan Contract, dated as of June 24th, 2005, by and between Feihe Dairy and
Qiqihaer Branch of China Construction Bank Co., Ltd.
|
S-1/A
|
10.9
|
333-128075
|
7/19/06
|
|||||||
10.7
|
Construction
Contract by and between Shanxi Feihe and Changzhi subsidiary company of
Henan Construction Project Company
|
S-1/A
|
10.10
|
333-128075
|
7/19/06
|
|||||||
10.8
|
Form
of Subscription Agreement, dated as of October 3, 2006, by and between the
registrant and investors listed therein
|
8-K/A
|
10.1
|
333-128075
|
10/6/06
|
|||||||
10.9
|
Form
of Registration Rights Agreement, dated as of October 3, 2006, by and
between the registrant and investors listed therein
|
8-K/A
|
10.2
|
333-128075
|
10/6/06
|
|||||||
10.10
|
Loan
Contract of Current Capital, by and between Heilong Jiang Flying Crane
Dairy Co., Ltd and Kedong County branch of Agricultural Development Bank
of China
|
S-1/A
|
10.13
|
333-128075
|
12/6/06
|
|||||||
10.11
|
RMB
Loan Contract, by and between Feihe Dairy and Qiqihaer Branch of China
Construction Bank Co., Ltd.
|
S-1/A
|
10.11
|
333-128075
|
12/6/06
|
|||||||
10.12
|
RMB
Loan Contract, by and between Feihe Dairy and Qiqihaer Branch of China
Construction Bank Co., Ltd.
|
S-1/A
|
10.12
|
333-128075
|
12/6/06
|
|||||||
10.13
|
Form
of Dairy Contract
|
S-1/A
|
10.14
|
333-128075
|
12/6/06
|
|||||||
10.14
|
Product
Purchase and Sale Contract, dated as of December 26, 2005, by and between
Feihe Dairy and Changxing Dairy
|
S-1/A
|
10.14
|
333-128075
|
3/19/07
|
|||||||
10.15
|
Product
Purchase and Sale Contract, dated as of April 26, 2004, by and between
Feihe Dairy and Changxing Dairy
|
S-1/A
|
10.15
|
333-128075
|
3/19/07
|
|||||||
10.16
|
Share
Transference Agreement, dated as of July 1, 2006, by and between the
registrant and Shanxi Li Santai Science and Technology Co.,
Ltd.
|
S-1/A
|
10.16
|
333-128075
|
4/17/07
|
|||||||
10.17
|
Amended
and Restated Notes Purchase Agreement, dated as of June 1, 2007, by and
among the registrant, Leng You-Bin, Liu Hua and Citadel Equity
Fund
|
8-K
|
10.1
|
001-32473
|
6/4/07
|
II-4
Incorporated by Reference
|
||||||||||||
Exhibit
No.
|
Exhibit Title
|
Filed
Herewith
|
Form
|
Exhibit
No.
|
File No.
|
Filing Date
|
||||||
10.18
|
Indenture,
dated as of June 1, 2007, by and between the registrant and The Bank of
New York
|
8-K
|
10.2
|
001-32473
|
6/4/07
|
|||||||
10.19
|
Form
of Note (attached as exhibit to the Indenture filed as Exhibit
10.18)
|
8-K
|
10.2
|
001-32473
|
6/4/07
|
|||||||
10.20
|
Registration
Rights Agreement
|
8-K
|
10.3
|
001-32473
|
6/4/07
|
|||||||
10.21
|
Investor
Rights Agreement
|
8-K
|
10.4
|
001-32473
|
6/4/07
|
|||||||
10.22
|
Share
Pledge Agreement
|
8-K
|
10.5
|
001-32473
|
6/4/07
|
|||||||
10.23
|
Indenture,
dated as of June 27, 2007, by and among the registrant, the holders listed
therein and The Bank of New York
|
S-1/A
|
10.25
|
333-128075
|
6/28/07
|
|||||||
10.24
|
Form
of 1% Guaranteed Senior Secured Convertible Note (attached as an exhibit
to the Indenture filed as exhibit 10.23)
|
S-1/A
|
10.25
|
333-128075
|
6/28/07
|
|||||||
10.25
|
Form
of Accession Letter
|
S-1/A
|
10.26
|
333-128075
|
6/28/07
|
|||||||
10.26
|
Form
of Non-Competition Agreement, by and between the registrant and each of
Mr. Leng You-Bin and Roger Liu
|
S-1/A
|
10.27
|
333-128075
|
6/28/07
|
|||||||
10.27
|
Joinder
Agreement
|
S-1/A
|
10.28
|
333-128075
|
6/28/07
|
|||||||
10.28
|
Loan
Agreement, dated as of June 27, 2007, by and between the registrant and
Moveup
|
10-Q/A
|
10.1
|
001-32473
|
8/22/07
|
|||||||
10.29
|
Equity
Purchase Agreement, dated as of August 2, 2007, by and among Moveup, Hunan
Mulin Modern Food Company, Ltd., Australia Ausnutria Dairy Pty., Chen
Yuanrong and Ausnutria
|
10-Q/A
|
10.2
|
001-32473
|
8/22/07
|
|||||||
10.30
|
Share
Subscription Agreement, dated as of August 12, 2007, by and between Moveup
and Ausnutria
|
10-Q/A
|
10.3
|
001-32473
|
8/22/07
|
|||||||
10.31
|
Share
Subscription Agreement, by and between the registrant and
Ausnutria
|
10-Q/A
|
10.4
|
001-32473
|
8/22/07
|
|||||||
10.32
|
Equity
Purchase Agreement, dated as of October 25, 2007, by and among Moveup,
Hunan Mulin Modern Food Company, Ltd Chen Yuanrong and
Ausnutria
|
8-K
|
10.1
|
001-32473
|
10/31/07
|
|||||||
10.33
|
Employment
Agreement, dated as of April 15, 2008 by and between the registrant and
Jonathan H. Chou
|
8-K
|
10.1
|
001-32473
|
4/18/08
|
|||||||
10.34
|
Supplemental
Indenture, dated as of November 12, 2008, by and between the registrant
and The Bank of New York Mellon, as Trustee, as amended
|
8-K/A
|
10.1
|
001-32473
|
11/21/08
|
|||||||
10.35
|
Agreement
Regarding 2009 Notes, dated as of November 12, 2008, by and among the
registrant, Leng You-Bin and the investors named therein
|
8-K/A
|
10.2
|
001-32473
|
11/21/08
|
|||||||
10.36
|
Share
Pledge Agreement, dated as of November 12, 2008, by and among the
registrant, Leng You-Bin and The Bank of New York, Mellon, as collateral
agent
|
8-K/A
|
10.3
|
001-32473
|
11/21/08
|
|||||||
10.37
|
First
Amendment to Registration Rights Agreement, dated as of November 12, 2008,
by and between the registrant and the investors named
therein.
|
8-K/A
|
10.4
|
001-32473
|
11/21/08
|
II-5
Incorporated by Reference
|
||||||||||||
Exhibit
No.
|
Exhibit Title
|
Filed
Herewith
|
Form
|
Exhibit
No.
|
File No.
|
Filing Date
|
||||||
10.38
|
Waiver
Letter to Registration Rights Agreement, dated as of November 12, 2008, by
and between the registrant and the investors named
therein
|
8-K/A
|
10.5
|
001-32473
|
11/21/08
|
|||||||
10.39
|
Form
of Amended and Restated 7.75% Convertible Note due October 2,
2009
|
8-K/A
|
10.6
|
001-32473
|
11/21/08
|
|||||||
10.40
|
Form
of Amended and Restated Common Stock Purchase Warrant
|
8-K/A
|
10.7
|
001-32473
|
11/21/08
|
|||||||
10.41
|
Form
of 2009 Stock Incentive Plan and related agreements
|
8-K/A
|
10.1
|
001-32473
|
5/14/09
|
|||||||
10.42
|
Subscription
Agreement, dated August 11, 2009, by and between the registrant and the
purchasers named therein
|
8-K
|
10.1
|
001-32473
|
8/12/09
|
|||||||
10.43
|
Registration
Rights Agreement, dated August 26, 2009, by and between the registrant and
the purchasers named therein
|
8-K
|
10.1
|
001-32473
|
8/26/09
|
|||||||
13.1
|
Annual
Report on Form 10-K for the fiscal year ended December 31,
2008
|
10-K
|
–
|
001-32473
|
4/15/09
|
|||||||
13.2
|
Amendment
No. 1 to Annual Report on Form 10-K for the fiscal year ended
December 31, 2008
|
10-K/A
|
–
|
001-32473
|
6/26/09
|
|||||||
13.3
|
Amendment
No. 2 to Annual Report on Form 10-K for the fiscal year ended
December 31, 2008
|
10-K/A
|
–
|
001-32473
|
7/24/09
|
|||||||
13.4
|
Quarterly
Report on Form 10-Q for the quarterly period ended March 31,
2009
|
10-Q
|
–
|
001-32473
|
5/14/09
|
|||||||
13.5
|
Amendment
No. 1 to Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2009
|
10-Q/A
|
–
|
001-32473
|
6/26/09
|
|||||||
13.6
|
Quarterly
Report on Form 10-Q for the quarterly period ended June 30,
2009
|
10-Q
|
–
|
001-32473
|
8/14/09
|
|||||||
14.1
|
Code
of Business Conduct and Ethics
|
10-KSB
|
14
|
000-27351
|
3/31/05
|
|||||||
14.2
|
Amended
and Restated Code of Business Conduct and Ethics
|
8-K
|
14
|
001-32473
|
5/12/08
|
|||||||
16.1
|
Letter
of HJ & Associates, L.L.C. regarding change in certifying
accountant
|
8-K
|
16
|
000-27351
|
8/6/03
|
|||||||
16.2
|
Letter
of Weinberg & Company, regarding change in certifying
accountant
|
8-K
|
16
|
000-27351
|
11/17/03
|
|||||||
16.3
|
Letter
of Murrell, Hall, McIntosh & Co., PLLP, regarding change in certifying
accountant
|
8-K
|
16.1
|
001-32473
|
12/13/07
|
|||||||
21.1
|
Subsidiaries
of the registrant
|
S-1/A
|
21.1
|
333-158777
|
5/28/09
|
|||||||
23.1
|
Consent
of Grant Thornton
|
X
|
||||||||||
23.2
|
Consent
of DLA Piper LLP (US) (included in Exhibit 5.1)
|
X
|
||||||||||
24.1
|
Power
of Attorney (included on signature page)
|
|
S-1
|
24.1
|
333-161840
|
9/10/09
|
(b) Financial Statement
Schedules. Not
applicable.
Item
17. Undertakings.
Insofar
as indemnification by the Registrant for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions referenced in Item 14 of this
registration statement or otherwise, the Registrant has been advised that in the
opinion of the SEC such indemnification is against public policy as expressed in
the Securities Act, and is therefore unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered hereunder, the Registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
II-6
The
undersigned Registrant hereby undertakes:
(1)
|
To
file, during any period in which offers or sales are being made, a
post-effective amendment to this registration
statement:
|
(i)
|
To
include any prospectus required by section 10(a)(3) of the Securities Act
of 1933;
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective
date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of securities
offered would not exceed that which was registered) and any deviation from
the low or high end of the estimated maximum offering range may be
reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate offering
price set forth in the “Calculation of Registration Fee” table in the
effective registration statement;
and
|
(iii)
|
To
include any material information with respect to the plan of distribution
not previously disclosed in the registration statement or any material
change to such information in the registration
statement.
|
(2)
|
That,
for the purpose of determining any liability under the Securities Act of
1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
|
(3)
|
To
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold at the termination of the
offering.
|
The
undersigned Registrant hereby undertakes to deliver or cause to be delivered
with the prospectus, to each person to whom the prospectus is sent or given, the
latest annual report to security holders that is incorporated by reference in
the prospectus and furnished pursuant to and meeting the requirements of
Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and,
where interim financial information required to be presented by Article 3 of
Regulation S-X is not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
The
undersigned Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Registrant’s Annual
Report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-7
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant has duly
caused this Amendment No. 1 to Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized in the City of Beijing,
on October 13, 2009.
AMERICAN
DAIRY, INC.
|
||
By:
|
/s/
Leng You-Bin
|
|
Leng
You-Bin, Director, Chief Executive Officer and
President
|
||
(Principal
Executive Officer)
|
||
By:
|
/s/
Jonathan H. Chou
|
|
Jonathan
H. Chou, Chief Financial Officer
|
||
(Principal
Accounting and Financial
Officer)
|
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed below by the following persons in the capacities and on the
dates indicated.
/s/
Leng You-Bin
|
October
13, 2009
|
Leng
You-Bin, Director, Chief Executive Officer and
President
|
|
(Principal
Executive Officer)
|
|
/s/
Liu Hua
|
October
13, 2009
|
Liu
Hua, Director, Vice Chairman, Secretary and Treasurer
|
|
/s/
Liu Sheng-Hui
|
October
13, 2009
|
Liu
Sheng-Hui, Director
|
|
/s/
Hui-Lan Lee
|
October
13, 2009
|
Hui-Lan
Lee, Director
|
|
/s/
Kirk Downing*
|
October
13, 2009
|
Kirk
Downing, Director
|
|
/s/
James Lewis*
|
October
13, 2009
|
James
Lewis, Director
|
|
/s/
Neil Nanpeng Shen*
|
October
13, 2009
|
Neil
Nanpeng Shen, Director
|
* By:
|
/s/
Leng You-Bin
|
|
Leng You-Bin, Attorney-In-Fact |
INDEX
TO EXHIBITS
Incorporated by Reference
|
||||||||||||
Exhibit
No.
|
Exhibit Title
|
Filed
Herewith
|
Form
|
Exhibit
No.
|
File No.
|
Filing Date
|
||||||
2
|
Stock
Exchange Agreement, dated as of January 15, 2003, by and among the
registrant, its shareholders and Lazarus Industries,
Inc.
|
8-K
|
2.1
|
000-27351
|
1/21/03
|
|||||||
2.1
|
Amendment
to Stock Exchange Agreement, dated as of March 5, 2003, by and among the
registrant, its shareholders and Lazarus Industries,
Inc.
|
8-K/A
|
2.2
|
000-27351
|
3/5/03
|
|||||||
3.1
|
Articles
of Incorporation, as amended
|
10-SB
|
1
|
000-27351
|
9/16/99
|
|||||||
3.2
|
Amendment
to Articles of Incorporation
|
10-KSB/A
|
3.2
|
000-27351
|
5/25/04
|
|||||||
3.3
|
Bylaws
|
10-SB
|
2
|
000-27351
|
9/16/99
|
|||||||
4.1
|
Specimen
certificate evidencing shares of common stock
|
S-1/A
|
4.1
|
333-158777
|
5/28/09
|
|||||||
5.1
|
Legal
opinion of DLA Piper LLP (US)
|
X
|
||||||||||
10.1
|
Consulting
Agreement, dated as of March 28, 2003, by and between the registrant and
Danbury Properties, L.L.C.
|
10-KSB
|
10.3
|
000-27351
|
4/05/04
|
|||||||
10.2
|
Stock
Purchase Agreement, dated as of March 28, 2003, by and among the
registrant, its shareholders and Lazarus Industries,
Inc.
|
10-KSB
|
10.4
|
000-27351
|
4/15/04
|
|||||||
10.3
|
Joint
Venture Agreement to organize Beijing Feihe
|
10-QSB
|
10.1
|
000-27351
|
5/17/04
|
|||||||
10.4
|
2003
Stock Incentive Plan
|
S-8
|
10
|
333-123932
|
4/7/05
|
|||||||
10.5
|
Asset
Purchase Agreement, dated as of May 20, 2005, by and between the
registrant and Nutricia Nutritionals Co., Ltd.
|
8-K
|
10.1
|
001-32473
|
5/26/05
|
|||||||
10.6
|
RMB
Loan Contract, dated as of June 24th, 2005, by and between Feihe Dairy and
Qiqihaer Branch of China Construction Bank Co., Ltd.
|
S-1/A
|
10.9
|
333-128075
|
7/19/06
|
|||||||
10.7
|
Construction
Contract by and between Shanxi Feihe and Changzhi subsidiary company of
Henan Construction Project Company
|
S-1/A
|
10.10
|
333-128075
|
7/19/06
|
|||||||
10.8
|
Form
of Subscription Agreement, dated as of October 3, 2006, by and between the
registrant and investors listed therein
|
8-K/A
|
10.1
|
333-128075
|
10/6/06
|
|||||||
10.9
|
Form
of Registration Rights Agreement, dated as of October 3, 2006, by and
between the registrant and investors listed therein
|
8-K/A
|
10.2
|
333-128075
|
10/6/06
|
|||||||
10.10
|
Loan
Contract of Current Capital, by and between Heilong Jiang Flying Crane
Dairy Co., Ltd and Kedong County branch of Agricultural Development Bank
of China
|
S-1/A
|
10.13
|
333-128075
|
12/6/06
|
|||||||
10.11
|
RMB
Loan Contract, by and between Feihe Dairy and Qiqihaer Branch of China
Construction Bank Co., Ltd.
|
S-1/A
|
10.11
|
333-128075
|
12/6/06
|
|||||||
10.12
|
RMB
Loan Contract, by and between Feihe Dairy and Qiqihaer Branch of China
Construction Bank Co., Ltd.
|
S-1/A
|
10.12
|
333-128075
|
12/6/06
|
|||||||
10.13
|
Form
of Dairy Contract
|
S-1/A
|
10.14
|
333-128075
|
12/6/06
|
Incorporated by Reference
|
||||||||||||
Exhibit
No.
|
Exhibit Title
|
Filed
Herewith
|
Form
|
Exhibit
No.
|
File No.
|
Filing Date
|
||||||
10.14
|
Product
Purchase and Sale Contract, dated as of December 26, 2005, by and between
Feihe Dairy and Changxing Dairy
|
S-1/A
|
10.14
|
333-128075
|
3/19/07
|
|||||||
10.15
|
Product
Purchase and Sale Contract, dated as of April 26, 2004, by and between
Feihe Dairy and Changxing Dairy
|
S-1/A
|
10.15
|
333-128075
|
3/19/07
|
|||||||
10.16
|
Share
Transference Agreement, dated as of July 1, 2006, by and between the
registrant and Shanxi Li Santai Science and Technology Co.,
Ltd.
|
S-1/A
|
10.16
|
333-128075
|
4/17/07
|
|||||||
10.17
|
Amended
and Restated Notes Purchase Agreement, dated as of June 1, 2007, by and
among the registrant, Leng You-Bin, Liu Hua and Citadel Equity
Fund
|
8-K
|
10.1
|
001-32473
|
6/4/07
|
|||||||
10.18
|
Indenture,
dated as of June 1, 2007, by and between the registrant and The Bank of
New York
|
8-K
|
10.2
|
001-32473
|
6/4/07
|
|||||||
10.19
|
Form
of Note (attached as exhibit to the Indenture filed as Exhibit
10.18)
|
8-K
|
10.2
|
001-32473
|
6/4/07
|
|||||||
10.20
|
Registration
Rights Agreement
|
8-K
|
10.3
|
001-32473
|
6/4/07
|
|||||||
10.21
|
Investor
Rights Agreement
|
8-K
|
10.4
|
001-32473
|
6/4/07
|
|||||||
10.22
|
Share
Pledge Agreement
|
8-K
|
10.5
|
001-32473
|
6/4/07
|
|||||||
10.23
|
Indenture,
dated as of June 27, 2007, by and among the registrant, the holders listed
therein and The Bank of New York
|
S-1/A
|
10.25
|
333-128075
|
6/28/07
|
|||||||
10.24
|
Form
of 1% Guaranteed Senior Secured Convertible Note (attached as an exhibit
to the Indenture filed as exhibit 10.23)
|
S-1/A
|
10.25
|
333-128075
|
6/28/07
|
|||||||
10.25
|
Form
of Accession Letter
|
S-1/A
|
10.26
|
333-128075
|
6/28/07
|
|||||||
10.26
|
Form
of Non-Competition Agreement, by and between the registrant and each of
Mr. Leng You-Bin and Roger Liu
|
S-1/A
|
10.27
|
333-128075
|
6/28/07
|
|||||||
10.27
|
Joinder
Agreement
|
S-1/A
|
10.28
|
333-128075
|
6/28/07
|
|||||||
10.28
|
Loan
Agreement, dated as of June 27, 2007, by and between the registrant and
Moveup
|
10-Q/A
|
10.1
|
001-32473
|
8/22/07
|
|||||||
10.29
|
Equity
Purchase Agreement, dated as of August 2, 2007, by and among Moveup, Hunan
Mulin Modern Food Company, Ltd., Australia Ausnutria Dairy Pty., Chen
Yuanrong and Ausnutria
|
10-Q/A
|
10.2
|
001-32473
|
8/22/07
|
|||||||
10.30
|
Share
Subscription Agreement, dated as of August 12, 2007, by and between Moveup
and Ausnutria
|
10-Q/A
|
10.3
|
001-32473
|
8/22/07
|
|||||||
10.31
|
Share
Subscription Agreement, by and between the registrant and
Ausnutria
|
10-Q/A
|
10.4
|
001-32473
|
8/22/07
|
|||||||
10.32
|
Equity
Purchase Agreement, dated as of October 25, 2007, by and among Moveup,
Hunan Mulin Modern Food Company, Ltd Chen Yuanrong and
Ausnutria
|
8-K
|
10.1
|
001-32473
|
10/31/07
|
|||||||
10.33
|
Employment
Agreement, dated as of April 15, 2008 by and between the registrant and
Jonathan H. Chou
|
8-K
|
10.1
|
001-32473
|
4/18/08
|
Incorporated by Reference
|
||||||||||||
Exhibit
No.
|
Exhibit Title
|
Filed
Herewith
|
Form
|
Exhibit
No.
|
File No.
|
Filing Date
|
||||||
10.34
|
Supplemental
Indenture, dated as of November 12, 2008, by and between the registrant
and The Bank of New York Mellon, as Trustee, as amended
|
8-K/A
|
10.1
|
001-32473
|
11/21/08
|
|||||||
10.35
|
Agreement
Regarding 2009 Notes, dated as of November 12, 2008, by and among the
registrant, Leng You-Bin and the investors named therein
|
8-K/A
|
10.2
|
001-32473
|
11/21/08
|
|||||||
10.36
|
Share
Pledge Agreement, dated as of November 12, 2008, by and among the
registrant, Leng You-Bin and The Bank of New York, Mellon, as collateral
agent
|
8-K/A
|
10.3
|
001-32473
|
11/21/08
|
|||||||
10.37
|
First
Amendment to Registration Rights Agreement, dated as of November 12, 2008,
by and between the registrant and the investors named
therein.
|
8-K/A
|
10.4
|
001-32473
|
11/21/08
|
|||||||
10.38
|
Waiver
Letter to Registration Rights Agreement, dated as of November 12, 2008, by
and between the registrant and the investors named therein
|
8-K/A
|
10.5
|
001-32473
|
11/21/08
|
|||||||
10.39
|
Form
of Amended and Restated 7.75% Convertible Note due October 2,
2009
|
8-K/A
|
10.6
|
001-32473
|
11/21/08
|
|||||||
10.40
|
Form
of Amended and Restated Common Stock Purchase Warrant
|
8-K/A
|
10.7
|
001-32473
|
11/21/08
|
|||||||
10.41
|
Form
of 2009 Stock Incentive Plan and related agreements
|
8-K/A
|
10.1
|
001-32473
|
5/14/09
|
|||||||
10.42
|
Subscription
Agreement, dated August 11, 2009, by and between the registrant and the
purchasers named therein
|
8-K
|
10.1
|
001-32473
|
8/12/09
|
|||||||
10.43
|
Registration
Rights Agreement, dated August 26, 2009, by and between the registrant and
the purchasers named therein
|
8-K
|
10.1
|
001-32473
|
8/26/09
|
|||||||
13.1
|
Annual
Report on Form 10-K for the fiscal year ended December 31,
2008
|
10-K
|
–
|
001-32473
|
4/15/09
|
|||||||
13.2
|
Amendment
No. 1 to Annual Report on Form 10-K for the fiscal year ended
December 31, 2008
|
10-K/A
|
–
|
001-32473
|
6/26/09
|
|||||||
13.3
|
Amendment
No. 2 to Annual Report on Form 10-K for the fiscal year ended
December 31, 2008
|
10-K/A
|
–
|
001-32473
|
7/24/09
|
|||||||
13.4
|
Quarterly
Report on Form 10-Q for the quarterly period ended March 31,
2009
|
10-Q
|
–
|
001-32473
|
5/14/09
|
|||||||
13.5
|
Amendment
No. 1 to Quarterly Report on Form 10-Q for the quarterly period ended
March 31, 2009
|
10-Q/A
|
–
|
001-32473
|
6/26/09
|
|||||||
13.6
|
Quarterly
Report on Form 10-Q for the quarterly period ended June 30,
2009
|
10-Q
|
–
|
001-32473
|
8/14/09
|
|||||||
14.1
|
Code
of Business Conduct and Ethics
|
10-KSB
|
14
|
000-27351
|
3/31/05
|
|||||||
14.2
|
Amended
and Restated Code of Business Conduct and Ethics
|
8-K
|
14
|
001-32473
|
5/12/08
|
|||||||
16.1
|
Letter
of HJ & Associates, L.L.C. regarding change in certifying
accountant
|
8-K
|
16
|
000-27351
|
8/6/03
|
|||||||
16.2
|
Letter
of Weinberg & Company, regarding change in certifying
accountant
|
8-K
|
16
|
000-27351
|
11/17/03
|
Incorporated by Reference
|
||||||||||||
Exhibit
No.
|
Exhibit Title
|
Filed
Herewith
|
Form
|
Exhibit
No.
|
File No.
|
Filing Date
|
||||||
16.3
|
Letter
of Murrell, Hall, McIntosh & Co., PLLP, regarding change in certifying
accountant
|
8-K
|
16.1
|
001-32473
|
12/13/07
|
|||||||
21.1
|
Subsidiaries
of the registrant
|
S-1/A
|
21.1
|
333-158777
|
5/28/09
|
|||||||
23.1
|
Consent
of Grant Thornton
|
X
|
||||||||||
23.2
|
Consent
of DLA Piper LLP (US) (included in Exhibit 5.1)
|
X
|
||||||||||
24.1
|
Power
of Attorney (included on signature page)
|
|
S-1
|
24.1
|
333-161840
|
9/10/09
|