Attached files
file | filename |
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EX-32.1 - ZST Digital Networks, Inc. | v182908_ex32-1.htm |
EX-31.1 - ZST Digital Networks, Inc. | v182908_ex31-1.htm |
EX-31.2 - ZST Digital Networks, Inc. | v182908_ex31-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-K/A
Amendment
No. 1
x ANNUAL REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended December 31, 2009
o TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For
the transition period from _____________________ to ______________
Commission
File Number: 000-52934
ZST
DIGITAL NETWORKS, INC.
(Exact
name of small business issuer as specified in its charter)
Delaware
(State
or other jurisdiction of incorporation or
organization)
|
20-8057756
(I.R.S.
Employer
Identification
No.)
|
|
206
Tongbo Street, Boyaxicheng Second Floor
Zhengzhou
City, Henan Province
People’s
Republic of China 450007
(Address
of principal executive offices)
|
(86)
371-6771-6850
(Registrant's
telephone number, including area code)
Title
of Each Class
|
Name
of Each Exchange on Which Registered
|
|
Common
Stock, $0.0001 par value
|
NASDAQ
Global Market
|
Securities
registered pursuant to Section 12(g) of the
Act: None.
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.Yes o No x
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.Yes o No x
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes x No o
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).Yes o No o
1
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K is not contained herein, and will not be contained, to the best
of registrant’s knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. 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.
Large
accelerated filer
o
|
Accelerated
filer o
|
Non-accelerated
filer x
|
Smaller
reporting company o
|
(Do
not check if a smaller reporting company)
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Act).
Yes o No x
There
were an aggregate of 11,650,442 shares outstanding of registrant’s common
stock, par value $0.0001 per share, as of April 29, 2010. The
aggregate market value of the voting and non-voting common equity held by
non-affiliates of the registrant as of April 29, 2010 was approximately $45.47
million based on the closing price of the registrant’s common stock on the
NASDAQ Global Market of $6.84 per share. The registrant’s common
stock commenced trading on the NASDAQ Global Market on October 20, 2009 under
the ticker symbol “ZSTN.” There was no public market for the
registrant’s securities prior to listing on the NASDAQ Global
Market.
Documents
Incorporated by Reference: None.
Explanatory
Note: This Form 10-K/A (the “Amendment”) is being filed in
order to complete Part III of Form 10-K filed with the Securities and Exchange
Commission on March 31, 2010 (the “Original Filing”) and fully comply with all
required information pursuant to Regulation S-K and Section 13 or 15(d) of the
Securities Exchange Act of 1934. This Amendment contains only the sections to
the Original Filing which are being amended, and those unaffected parts or
exhibits are not included herein.
2
PART
III
Executive
Officers, Directors and Key Employees
The
following individuals constitute our board of directors and executive
management:
Name
|
Age
|
Position
|
Term
|
|||
Zhong
Bo
|
59
|
Chairman
of the Board and
Chief
Executive Officer
|
January
9, 2009 thru Present
|
|||
Zhong
Lin
|
27
|
Director
and Chief Operating Officer
|
January
9, 2009 thru Present
|
|||
Yang
Ai Mei
|
59
|
Director
|
January
9, 2009 thru Present
|
|||
Tian
Li Zhi
|
36
|
Director
|
January
9, 2009 thru Present
|
|||
Sheng
Yong
|
47
|
Director
|
January
9, 2009 thru Present
|
|||
Liu
Hui Fang
|
31
|
Director
|
January
9, 2009 thru Present
|
|||
John
Chen
|
32
|
Chief
Financial Officer
|
October
20, 2009 thru Present
|
|||
Xue
Na
|
32
|
Corporate
Secretary, Deputy General Manager and President of the Labor
Union
|
December
11, 2009 thru Present (Corporate Secretary); January 9, 2009 thru Present
(Deputy General Manager and President of the Labor
Union)
|
Zhong Bo
has been chairman of the board of Zhengzhou ZST since 1996. He has also served
as the director of the Henan Association for the Promotion of Non-Governmental
Entrepreneurs since July 1999, as the President of the Federation of Industry
and Commerce (General Chamber of Commerce) since January 2001 and as a committee
member of the Chinese People’s Political Consultative Conference since January
2004. From October 1989 to September 1992, Mr. Zhong served as the manager of
the Zhengzhou and Luoyang Offices of Beijing CEC Video & Audio Technology
Jointly Developed Corporation. From September 1970 to September 1989, Mr. Zhong
served as the technical principal of the Zhumadian Branch of the Wuhan Times
Academy of Sciences. Mr. Zhong obtained a degree in Electronics in September
1989 from the Electronic Engineering Department of Tsinghua University and a
Master’s degree in Business Management in 2003 from Asia International Open
University in Macau. The Company believes that Mr. Zhong’s business
expertise and management positions give him the qualifications and skills to
serve as a director.
Zhong Lin
has served as general manager of Zhengzhou ZST since January 2008. Prior to
serving as general manager, Mr. Zhong served as the manager of the system
integration department of Zhengzhou ZST, from April 2005 to December
2007. From 1997 to 2001, Mr. Zhong studied Computer Information Management
at Nanjing University of Science and Technology. The Company believes
that Mr. Zhong’s business expertise and management positions give him the
qualifications and skills to serve as a director.
Yang Ai
Mei has served as managing director of Zhengzhou Guangda Textiles Co.,
Ltd., a cotton manufacturing company, since May 1995, where she has worked since
1988. From January 1978 to January 1988, Ms. Yang was the manager of Zhongyuan
Labour Services Company, a company which engages in the sale and trade of
textiles. Ms. Yang received a Bachelor of Economics in the field of Management
in 1975 from Zheng Zhau University. The Company believes that Ms.
Yang’s business expertise and management positions give her the qualifications
and skills to serve as a director.
Tian Li
Zhi has been employed as an attorney for the Henan Image Law Firm since
May 2000. From May 1997 to May 2000, Ms. Tian was a legal consultant for
Zhengzhou Asia Group, a company which manages commercial properties. Ms. Tian
received a law degree in 1997 from Zheng Zhau University. The Company
believes that Ms. Tian’s legal expertise give her the qualifications and skills
to serve as a director.
3
Sheng Yong
has served as the general manager of Iaoning Unified Biological Energy Sources
Co., Ltd., a biological energy company, since January 2004. From January 1988 to
January 2004, Mr. Sheng was the deputy general manager of Zhengzhou Yinhe
Joint-Stock Co., Ltd., a textile manufacturing company. Mr. Sheng received a
Bachelor of Economics in Management from the Air Force Polities Academy of the
Chinese People’s Liberation Army in 1999. The Company believes that
Mr. Sheng’s business expertise and management positions give him the
qualifications and skills to serve as a director.
Liu Hui
Fang has served as finance manager of Henan Zhongfu Container Co., Ltd.,
a company which engages in the production and sale of plastic packaging, since
August 2002. From July 1999 to August 2002, Ms. Liu served as chief accountant
of Zhengzhou Fukang Medical Equipment Co., Ltd., a distributor of medical
equipment. Ms. Liu received a degree in business accounting in 1999 from Henan
Business College. She is also a member of The Chinese Institute of Certified
Public Accountants. The Company believes that Ms. Liu’s business and
financial expertise give her the qualifications and skills to serve as a
director.
John Chen
previously served as the Vice President, Investment Banking-China Practice of
Brean Murray, Carret & Co., from December 2007 to January
2009. From June 2007 to November 2007, Dr. Chen served as the Senior
Vice President, Investment Banking of Global Hunter Securities
LLC. Dr. Chen served as the Associate Vice President, Business
Development of Paramount BioCapital from March 2006 to December
2006. Prior to that, he was a Clinical Research Fellow, on a one year
fellowship, at the National Cancer Institute from August 2005 to August
2006. Dr. Chen also served as a Biotechnology Associate Analyst at
Friedman, Billings, Ramsey, Inc. from September 2004 to August
2005. Dr. Chen received a M.D./MBA in health management from Tufts
University School of Medicine and Brandeis University, Northeastern University
in 2004 and a B.S. in Biology from the University of California, Irvine in
2000.
Xue Na has
served as deputy general manager of Zhengzhou ZST since September 2005 and as
president of the labor union for Zhengzhou ZST since 2003. From January 2002 to
August 2005, Ms. Xue served as the assistant general manager of Zhengzhou ZST
and from July 1997 to December 2001, she held the position of office director of
Zhengzhou ZST. Ms. Xue received her MBA in 2002 from Asia International Open
University (Macau). From 1995 to 1997, Ms. Xue studied public relations at
Zhengzhou Huanghe Science and Technology College.
Except as
noted above, the above persons do not hold any other directorships in any
company with a class of securities registered pursuant to Section 12 of the
Exchange Act or subject to the requirements of Section 15(d) of the Exchange
Act.
Family
Relationships
Zhong Bo
is the father of Zhong Lin. Except as noted herein, there are no
family relationships among of the directors and executive officers.
Involvement
in Certain Legal Proceedings
There
have been no events under any bankruptcy act, no criminal proceedings and no
judgments, injunctions, orders or decrees material to the evaluation of the
ability and integrity of any director, executive officer, promoter or control
person of the Company during the past five years.
There
have been no material proceedings to which any director, officer or affiliate of
the Company, any owner of record or beneficially of more than five percent of
any class of voting securities of the Company, or any associate of any such
director, officer, affiliate of the Company, or security holder is a party
adverse to the Company or any of its subsidiaries or has a material interest
adverse to the Company or any of its subsidiaries.
4
The
Board of Directors and Committees
Board
Composition
Subject
to certain exceptions, under the listing standards of the NASDAQ Global Market,
a listed company’s board of directors must consist of a majority of independent
directors. Currently, our board of directors has determined that each of the
following non-management directors, Yang Ai Mei, Tian Li Zhi, Sheng Yong and Liu
Hui Fang, is an “independent” director as defined by the listing standards of
the NASDAQ Global Market currently in effect and approved by the SEC and all
applicable rules and regulations of the SEC. All members of the Audit,
Compensation and Nominating Committees satisfy the “independence” standards
applicable to members of each such committee. The board of directors made this
affirmative determination regarding these directors’ independence based on
discussions with the directors and on its review of the directors’ responses to
a standard questionnaire regarding employment and compensation history;
affiliations, family and other relationships; and transactions with the Company.
The board of directors considered relationships and transactions between each
director or any member of his immediate family and the Company and its
subsidiaries and affiliates. The purpose of the board of director’s review with
respect to each director was to determine whether any such relationships or
transactions were inconsistent with a determination that the director is
independent under the NASDAQ Global Market rules.
Audit
Committee
We
established our Audit Committee in February 2009. The Audit Committee consists
of Liu Hui Fang, Yang Ai Mei and Tian Li Zhi, each of whom is an independent
director. Liu Hui Fang, Chairman of the Audit Committee, is an “audit committee
financial expert” as defined under Item 407(d) of Regulation S-K. The purpose of
the Audit Committee is to represent and assist our board of directors in its
general oversight of our accounting and financial reporting processes, audits of
the financial statements and internal control and audit functions. The Audit
Committee’s responsibilities include:
•
|
The
appointment, replacement, compensation, and oversight of work of the
independent auditor, including resolution of disagreements between
management and the independent auditor regarding financial reporting, for
the purpose of preparing or issuing an audit report or performing other
audit, review or attest services.
|
•
|
Reviewing
and discussing with management and the independent auditor various topics
and events that may have significant financial impact on our Company or
that are the subject of discussions between management and the independent
auditors.
|
The board
of directors has adopted a written charter for the Audit Committee. A copy of
the Audit Committee Charter is posted on our corporate website at: www.shenyangkeji.com.
Compensation
Committee
We
established our Compensation Committee in February 2009. The Compensation
Committee consists of Liu Hui Fang and Tian Li Zhi, each of whom is an
independent director. Liu Hui Fang is the Chairman of the Compensation
Committee. The Compensation Committee is responsible for the design, review,
recommendation and approval of compensation arrangements for our directors,
executive officers and key employees, and for the administration of our equity
incentive plans, including the approval of grants under such plans to our
employees, consultants and directors. The Compensation Committee also reviews
and determines compensation of our executive officers, including our Chief
Executive Officer. The board of directors has adopted a written charter for the
Compensation Committee. A copy of the Compensation Committee Charter is posted
on our corporate website at: www.shenyangkeji.com.
5
Nominating
Committee
We
established our Nominating Committee in February 2009. The Nominating Committee
consists of Tian Li Zhi and Sheng Yong, each of whom is an independent director.
Tian Li Zhi is the Chairman of the Nominating Committee. The Nominating
Committee assists in the selection of director nominees, approves director
nominations to be presented for stockholder approval at our annual general
meeting and fills any vacancies on our board of directors, considers any
nominations of director candidates validly made by stockholders, and reviews and
considers developments in corporate governance practices. The board of directors
has adopted a written charter for the Nominating Committee. A copy of the
Nominating Committee Charter is posted on our corporate website at: www.shenyangkeji.com.
Code
of Business Conduct and Ethics
Our board
of directors has adopted a code of ethics, which applies to all our directors,
officers and employees. Our code of ethics is intended to comply with the
requirements of Item 406 of Regulation S-K. A copy of our code of
ethics will be posted on our corporate website at
www.shenyangkeji.com. We will provide our code of ethics in print
without charge to any stockholder who makes a written request
to: Corporate Secretary, ZST Digital Networks, Inc., 206 Tongbo
Street, Boyaxicheng Second Floor, Zhengzhou City, Henan Providence, People’s
Republic of China 450007. Any waivers of the application and any amendments to
our code of ethics must be made by our board of directors. Any waivers of, and
any amendments to, our code of ethics will be disclosed promptly on our
corporate website.
Section
16(a) Beneficial Ownership Reporting Compliance
Section 16(a)
of the Exchange Act requires the Company’s directors and officers, and persons
who beneficially own more than 10% of a registered class of the Company’s equity
securities, to file reports of beneficial ownership and changes in beneficial
ownership of the Company’s securities with the SEC on Forms 3, 4 and 5.
Officers, directors and greater than 10% stockholders are required by SEC
regulation to furnish the Company with copies of all Section 16(a) forms
they file.
Based
solely on the Company’s review of the copies of the forms received by it during
the fiscal year ended December 31, 2009 and written representations that no
other reports were required, the Company believes that the following person(s)
who, at any time during such fiscal year, was a director, officer or beneficial
owner of more than 10% of the Company’s common stock failed to comply with all
Section 16(a) filing requirements during such fiscal years:
Name
|
Number of
Late Reports
|
Number of Transactions
not Reported on a Timely
Basis
|
Failure to File a Required
Form
|
||||
John
Fan Chen
|
1
|
1
|
Form
4
|
6
ITEM
11. EXECUTIVE COMPENSATION.
Compensation
Discussion and Analysis
Prior to
the closing of the Share Exchange, our current named executive officers were
compensated by Zhengzhou ZST until the closing of the Share Exchange, including
for the years ended December 31, 2007 and 2008 and the period from January 1,
2009 to January 9, 2009. The Chief Executive Officer and Chairman of
the Board of Zhengzhou ZST, Zhong Bo, determined the compensation for himself
and the other executive officers of Zhengzhou ZST that was earned in fiscal 2007
and 2008 and the period from January 1, 2009 to January 9, 2009 after consulting
with the board members of Zhengzhou ZST. In addition, the Board of Directors of
Zhengzhou ZST approved the compensation. From January 1, 2009 to January 9, 2009
and during the fiscal years of 2008 and 2007, the compensation for Zhengzhou
ZST’s named executive officers consisted solely of each executive officer’s
salary and cash bonus. The Board of Directors of Zhengzhou ZST
believe that the salaries paid to our executive officers during 2007, 2008 and
the period from January 1, 2009 to January 9, 2009 are indicative of the
objectives of its compensation program and reflect the fair value of the
services provided to Zhengzhou ZST, as measured by the local market in
China.
Upon the
closing of the Share Exchange, the executive officers of Zhengzhou ZST were
appointed as our executive officers and we adopted the compensation policies of
Zhengzhou ZST, as modified for a company publicly reporting in the United
States. Compensation for our current executive officers is determined
with the goal of attracting and retaining high quality executive officers and
encouraging them to work as effectively as possible on our behalf. Compensation
is designed to reward executive officers for successfully meeting their
individual functional objectives and for their contributions to our overall
development. For these reasons, the elements of compensation of our executive
officers are salary and bonus. Salary is paid to cover an appropriate level of
living expenses for the executive officers and the bonus is paid to reward the
executive officer for individual and company achievement.
Salary is
designed to attract, as needed, individuals with the skills necessary for us to
achieve our business plan, to motivate those individuals, to reward those
individuals fairly over time, and to retain those individuals who continue to
perform at or above the levels that we expect. When setting and adjusting
individual executive salary levels, we consider the relevant established salary
range, the named executive officer’s responsibilities, experience, potential,
individual performance and contribution. We also consider other factors such as
our overall corporate budget for annual merit increases, unique skills, demand
in the labor market and succession planning.
We
determine the levels of salary as measured primarily by the local market in
China. We determine market rate by conducting a comparison with the
local geographic area averages and industry averages in China. In determining
market rate, we review statistical data collected and reported by the Zhengzhou
City Labor Bureau, which is published monthly. The statistical data provides the
high, median, low and average compensation levels for various positions in
various industry sectors. In particular, we use the data for the manufacturing
sector as our benchmark to determine compensation levels because we operate in
Zhengzhou City as a consumer electronics manufacturer. Our compensation levels
are at roughly the 80th-90th percentile of the compensation spectrum for the
manufacturing sector. Once we determine the overall compensation levels for our
officers based on the benchmarks, we allocate a certain portion of the total
compensation to salary, which is paid during the fiscal year, and allocate the
remainder to bonus, which will be paid after the end of the fiscal year if
corporate and individual performance goals are met.
Corporate
performance goals include sales targets, research and development targets,
production yields, and equipment utilization. Additional key areas of corporate
performance taken into account in setting compensation policies and decisions
are cost control, profitability, and innovation. The key factors may vary
depending on which area of business a particular executive officer’s work is
focused. Individual performance goals include subjective evaluation,
based on an employee’s team-work, creativity and management capability, and
objective goals such as sales targets. Generally, the amount of a
bonus, when awarded, will be equal to one month's salary plus 5% to 25% of the
individual's annual salary. If the corporate and individual goals are
fully met, the bonus will be closer to the top end of the range. If
the goals are only partially met, the amount of the bonus will be closer to the
bottom end of the range. In no event will there be a bonus equal to
more than one month's salary if the corporate goals are not met by at least
50%. For 2009, the amounts of the bonuses were determined in relation
to overall compensation levels, which were based on roughly the 80th-90th
percentile of the compensation spectrum for the manufacturing sector in
Zhengzhou City, China. A certain portion of total compensation was
allocated to salary and the remainder was allocated to bonus based on
achievement of corporate and individual performance goals. In 2009,
our corporate performance had improved in line with internal goals, including an
increase in revenue and profitability.
7
Our board
of directors established a Compensation Committee in February 2009 comprised of
non-employee directors. The Compensation Committee will perform, at
least annually, a strategic review of the compensation program for our executive
officers to determine whether it provides adequate incentives and motivation to
our executive officers and whether it adequately compensates our executive
officers relative to comparable officers in other companies with which we
compete for executives. Those companies may or may not be public companies or
companies located in the PRC or even, in all cases, companies in a similar
business. Prior to the formation of the Compensation Committee, Zhong Bo, upon
consulting with our board members, determined the compensation for himself and
our other current executive officers. Beginning in February 2009, our
Compensation Committee currently determines compensation levels for our
executive officers. We have established a compensation program for executive
officers for 2010 that is designed to attract, as needed, individuals with the
skills necessary for us to achieve our business plan, to motivate those
individuals, to reward those individuals fairly over time, and to retain those
individuals who continue to perform at or above the levels that we
expect. For 2010, bonuses for executive officers will be based on
company and individual performance factors, as described above.
Having
listed on the NASDAQ Global Market in October 2009, we intend to adjust our
bonus evaluations upwards in 2010, but, in such case, we do not intend to
increase them by more than 20%. We believe that adopting higher compensation in
the future may be based on the increased amount of responsibilities assumed by
each of the executive officers after we became a publicly listed
company.
We also
intend to expand the scope of our compensation, such as the possibility of
granting options to executive officers and tying compensation to predetermined
performance goals. We intend to adopt an equity incentive plan and
intend to issue stock-based awards under the plan to aid our company’s long-term
performance, which we believe will create an ownership culture among our named
executive officers that fosters beneficial, long-term performance by our
company. We do not currently have a general equity grant policy with
respect to the size and terms of grants that we intend to make in the future,
but we expect that our Compensation Committee will evaluate our achievements for
each fiscal year based on performance factors and results of operations such as
revenues generated, cost of revenues, and net income.
8
Summary
Compensation Table
The
following table sets forth information concerning the compensation for the two
fiscal years ended December 31, 2009, 2008 and 2007 of our principal executive
officer, our principal financial officer, our three most highly compensated
officers whose annual compensation exceeded $100,000, and up to two additional
individuals for whom disclosure would have been required but for the fact that
the individual was not serving as an executive officer of the registrant at the
end of the last fiscal year (the “named executive officers”).
Name and Position
|
Year
|
Salary
|
Bonus
|
All Other
Compensation
|
Total
|
||||||
Zhong
Bo
(1)
|
2009
|
$
|
14,941
|
$
|
—
|
$
|
—
|
$
|
14,941
|
||
Chief
Executive Officer and
|
2008
|
6,594
|
—
|
—
|
6,594
|
||||||
Chairman
of the Board
|
2007
|
6,297
|
—
|
—
|
6,297
|
||||||
John
Chen
(2)
|
2009
|
$
|
37,500
|
$
|
10,274(3)
|
$
|
—
|
$
|
47,774
|
||
Chief
Financial Officer
|
2008
|
—
|
—
|
—
|
—
|
||||||
2007
|
—
|
—
|
—
|
—
|
|||||||
Zeng
Yun Su
(4)
|
2009
|
$
|
9,153
|
$
|
—
|
$
|
—
|
$
|
9,153
|
||
Former
Chief Financial Officer
|
2008
|
—
|
—
|
—
|
—
|
||||||
and
Former Corporate Secretary
|
2007
|
—
|
—
|
—
|
—
|
||||||
Richard
Rappaport
(5)
|
2009
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||
Former
Chief Executive Officer
|
2008
|
—
|
—
|
—
|
—
|
||||||
and
Former Director
|
2007
|
—
|
—
|
—
|
—
|
(1)
|
Mr.
Zhong was appointed the Company’s Chief Executive Officer and Chairman of
the Board upon the closing of the Share Exchange on January 9,
2009. The compensation Mr. Zhong received in 2007 and 2008 was
paid by Zhengzhou ZST, our wholly-owned subsidiary which we acquired upon
the closing of the Share Exchange on January 9,
2009.
|
(2)
|
Mr.
Chen was appointed the Company’s Chief Financial Officer effective on
October 20, 2009.
|
(3)
|
Pursuant
to his employment agreement, Mr. Chen was granted a signing bonus, which
is calculated as follows: $410.96 per day multiplied by the number of days
between September 25, 2009 and October 20,
2009.
|
(4)
|
Mr.
Zeng resigned as Chief Financial Officer of the Company effective on
October 20, 2009 and as Corporate Secretary of the Company effective on
December 11, 2009.
|
(5)
|
Mr.
Rappaport resigned from all positions with the Company upon the closing of
the Share Exchange on January 9,
2009.
|
9
Grants
of Plan-Based Awards in 2009
The
following table summarizes our awards made to our named executive officers in
2009.
Name
|
Grant
Date (1)
|
Number
of Shares of Common Stock Underlying Options
|
Exercise
of Base Price of the Options Award ($/Sh)
|
Grant
Date of Fair Value of Stock and Options Awarded
($)(1)
|
||||||||||||
Zhong
Bo
Chairman
of the Board and Chief Executive Officer
|
-- | -- | -- | -- | ||||||||||||
John
Chen
Chief
Financial Officer (1)
|
10/20/2009
|
25,000 | $ | 8.00 | $ |
172,863
|
(1)
|
The
amounts disclosed reflect the value of awards for grants of non-qualified
stock options. These non-qualified stock options are performance-based
compensation for purposes of Section 162(m) of the Internal Revenue Code
and reflect the full grant date fair values in accordance with FASB ASC
Topic 718. For assumptions used in calculation of option awards, see
note 20 to our consolidated financial statements included in our
Annual Report on Form 10-K for the year ended December 31,
2009.
|
Outstanding
Equity Awards at 2009 Fiscal Year End
The
following table presents the outstanding equity awards held by each of the named
executive officers as of the fiscal year ended December 31, 2009.
Name
|
Number
of Securities Underlying Unexercised Options (#)
Exercisable
|
Number
of Securities Underlying Unexercised Options (#)
Unexercisable
|
Equity
Incentive Plan Awards: Number of Securities Underlying Unexercised
Unearned Options (#)
|
Option
Exercise Price
|
Option
Expiration Date
|
|||||||||||||||
Zhong
Bo
Chairman
of the Board and Chief Executive Officer
|
-- | -- | -- | -- | -- | |||||||||||||||
John
Chen
Chief
Financial Officer (1)
|
25,000 | -- | -- | $ | 8.00 |
10/20/2014
|
(1)
|
Mr. Chen’s
options are immediately exercisable but, to the extent they are exercised,
will be subject to a repurchase right of the Company, which will lapse as
follows: 50% of the options will vest six (6) months after
October 20, 2009 and the remaining 50% will vest twelve (12) months after
October 20, 2009. The options will expire five (5) years from
the grant date, provided, however, that Dr. Chen remains continuously
employed by the Company during the applicable five-year
period.
|
Option
Exercises and Stock Vested in Fiscal 2009
There
were no option exercises or stock vested in fiscal 2009.
Pension
Benefits
There
were no pension benefit plans in effect in 2009.
Nonqualified
Defined Contribution and Other Nonqualified Deferred Compensation
Plans
There
were no nonqualified defined contribution or other nonqualified deferred
compensation plans in effect in 2009.
10
Employment
Agreements
On
December 13, 2009, we entered into an employment agreement with Zhong Bo, our
Chief Executive Officer and Chairman of the Board, which has a term of three
years. Mr. Zhong is paid an annual salary of RMB 102,000, which is approximately
USD$14,941. The employment agreement provides that the parties may
terminate the agreement upon mutual agreement or, under certain conditions, the
Company may terminate the agreement upon 30 day prior written notice to Mr.
Zhong. Mr. Zhong may terminate his employment immediately under certain
circumstances including if the Company fails to provide certain required labor
protection or working conditions, fails to pay compensation on time and in full,
or acts in such a way to harm Mr. Zhong’s right and interests or threaten his
personal safety. The employment agreement also provides that the Company may
terminate such agreement immediately under certain circumstances including if
Mr. Zhong does not satisfy the conditions for employment during the probation
period, materially breaches the Company’s rules and regulations, or neglects his
duties thereby causing substantial damage to the Company. The employment
agreement restricts the Company’s ability to terminate the employment agreement
under certain circumstances including if Mr. Zhong has proven that he is unable
to work due to a work-related injury, or has contracted an illness or sustained
a non-work-related injury and the prescribed period of medical care has not yet
expired. In addition, the employment agreement provides that under certain
circumstances, Mr. Zhong may have to compensate the Company for economic losses
incurred. Under the employment agreement, Mr. Zhong has an obligation to
maintain commercial secrets of the Company. The employment agreement contains
general provisions for mediation and arbitration in the case of any dispute
arising out of the employment agreement that cannot first be settled by
consultation and negotiation.
On
October 8, 2009, we entered into an employment agreement with Dr. Chen regarding
his employment by the Company as its new Chief Financial Officer effective on
October 20, 2009 (the "Effective Date"). Pursuant to the employment agreement,
Dr. Chen is entitled to a base salary at an annual rate of $150,000. Dr.
Chen was also granted a signing bonus which is calculated as follows:
$410.96 per day multiplied by the number of days between September 25, 2009 and
the Effective Date. The initial term of the employment agreement
will be eighteen (18) months, with automatic one-year extensions.
Upon the
Effective Date, we also granted Dr. Chen options to purchase 25,000 shares of
the common stock of the Company at an exercise price of $8.00 per share (the
“Initial Options”). The Initial Options will be immediately
exercisable but, to the extent they are exercised, will be subject to a
repurchase right of the Company, which will lapse as follows: 50% of
the Initial Options will vest six (6) months after the Effective Date and the
remaining 50% will vest twelve (12) months after the Effective
Date. Upon the 1-year anniversary of the Effective Date, Dr. Chen
will be granted additional options to purchase 12,500 shares of the common stock
of the Company at an exercise price equal to the market price on the grant date
that are not immediately exercisable, and which will vest six (6) months from
the date of grant (the “Subsequent Options”). The Initial
Options and Subsequent Options will expire five (5) years from their respective
grant dates, provided, however, that Dr. Chen remains continuously employed by
the Company during the applicable five-year period.
Potention
Payments Upon Termination or Change-in-Control
In the
event of the termination of Mr. Chen’s employment under his employment
agreement, the Company shall pay Mr. Chen on the date of termination only the
amount of his salary that is earned but unpaid as of the date of termination, as
well as any accrued but unused paid leave and any unreimbursed business expenses
incurred as of the termination date. In the event of the termination
of Mr. Chen’s employment for Good Reason (as defined in the employment
agreement), the Company shall pay Mr. Chen a severance payment in an amount
equal to three (3) months of Mr. Chen’s annual salary at the time of
termination, less applicable statutory deductions and withholdings, to be paid,
at the Company’s discretion, in a lump sum or such regular intervals over the
3-month period as shall be determined by the Company, provided that Mr. Chen
signs a standard release of all claims as presented by the
Company. In the event of the termination of Mr. Chen’s employment
without Cause (as defined in the employment agreement), the Company shall pay
Mr. Chen a severance payment in an amount equal to Mr. Chen’s annual salary at
the time of termination for remainder of the term of employment, less applicable
statutory deductions and withholdings, to be paid, at the Company’s discretion,
in a lump sum or such regular intervals over the period as shall be determined
by the Company, provided that Mr. Chen signs a standard release of all claims as
presented by the Company.
11
Director
Compensation
The
Company did not and does not currently have an established policy to provide
compensation to members of its board of directors for their services in that
capacity. The Company intends to develop such a policy in the near
future.
Indemnifications
of Directors and Executive Officers and Limitations of Liability
Under
Section 145 of the General Corporation Law of the State of Delaware, we can
indemnify our directors and officers against liabilities they may incur in such
capacities, including liabilities under the Securities Act. Our certificate of
incorporation provides that, pursuant to Delaware law, our directors shall not
be liable for monetary damages for breach of the directors’ fiduciary duty of
care to us and our stockholders. This provision in the certificate of
incorporation does not eliminate the duty of care, and in appropriate
circumstances equitable remedies such as injunctive or other forms of
non-monetary relief will remain available under Delaware law. In addition, each
director will continue to be subject to liability for breach of the director’s
duty of loyalty to us or our stockholders, for acts or omissions not in good
faith or involving intentional misconduct or knowing violations of the law, for
actions leading to improper personal benefit to the director, and for payment of
dividends or approval of stock repurchases or redemptions that are unlawful
under Delaware law. The provision also does not affect a director’s
responsibilities under any other law, such as the federal securities laws or
state or federal environmental laws.
Our
bylaws provide for the indemnification of our directors to the fullest extent
permitted by the Delaware General Corporation Law. Our bylaws further provide
that our board of directors has discretion to indemnify our officers and other
employees. We are required to advance, prior to the final disposition of any
proceeding, promptly on request, all expenses incurred by any director or
executive officer in connection with that proceeding on receipt of an
undertaking by or on behalf of that director or executive officer to repay those
amounts if it should be determined ultimately that he or she is not entitled to
be indemnified under the bylaws or otherwise. We are not, however, required to
advance any expenses in connection with any proceeding if a determination is
reasonably and promptly made by our board of directors by a majority vote of a
quorum of disinterested board members that (i) the party seeking an advance
acted in bad faith or deliberately breached his or her duty to us or our
stockholders and (ii) as a result of such actions by the party seeking an
advance, it is more likely than not that it will ultimately be determined that
such party is not entitled to indemnification pursuant to the applicable
sections of its bylaws.
We have
been advised that in the opinion of the Securities and Exchange Commission,
insofar as indemnification for liabilities arising under the Securities Act may
be permitted to our directors, officers and controlling persons pursuant to the
foregoing provisions, or otherwise, such indemnification is against public
policy as expressed in the Securities Act and is therefore unenforceable. In the
event a claim for indemnification against such liabilities (other than our
payment of expenses incurred or paid by our director, officer or controlling
person 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, we will, unless in the opinion of our counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question of whether such indemnification by us is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
We may
enter into indemnification agreements with each of our directors and officers
that are, in some cases, broader than the specific indemnification provisions
permitted by Delaware law, and that may provide additional procedural
protection. As of the closing of the Share Exchange, we have not entered into
any indemnification agreements with our directors or officers, but may choose to
do so in the future. Such indemnification agreements may require us, among other
things, to:
●
|
indemnify
officers and directors against certain liabilities that may arise because
of their status as officers or
directors;
|
●
|
advance
expenses, as incurred, to officers and directors in connection with a
legal proceeding, subject to limited exceptions;
or
|
●
|
obtain
directors’ and officers’ insurance.
|
12
At
present, there is no pending litigation or proceeding involving any of our
directors, officers or employees in which indemnification is sought, nor are we
aware of any threatened litigation that may result in claims for
indemnification.
Compensation
Committee Interlocks and Insider Participation
The
Compensation Committee of the Board of Directors is composed of the following
two Board members: Liu Hui Fang (Chair) and Tian Li Zhi. No member of
the Compensation Committee is a former or current officer or employee of the
Company or had any relationship requiring disclosure under Item 404 of
Regulation S-K promulgated under the Securities Exchange Act of 1934, as
amended. No interlocking relationship exists between our board of
directors and the board of directors or compensation committee of any other
company.
13
COMPENSATION
COMMITTEE REPORT (1)
The
Compensation Committee has reviewed and discussed with management the
Compensation Discussion and Analysis, or CD&A, contained in this Annual
Report on Form 10-K. Based on this review and discussion, the Compensation
Committee has recommended to the board of directors that the CD&A be
included in this Annual Report on Form 10-K.
Compensation Committee
Liu Hui Fang
Tian Li Zhi
_____________________________
(1) The
material in this report is not deemed to be "soliciting material," or to be
"filed" with the Securities and Exchange Commission, and is not to be
incorporated by reference into any filing of ZST Digital Networks, Inc.
under the Securities Act or the Exchange Act.
14
ITEM
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS.
Beneficial
ownership is determined in accordance with the rules of the SEC. In computing
the number of shares beneficially owned by a person and the percentage of
ownership of that person, shares of common stock subject to options and warrants
held by that person that are currently exercisable or become exercisable within
60 days of the date of this report are deemed outstanding even if they have not
actually been exercised. Those shares, however, are not deemed outstanding for
the purpose of computing the percentage ownership of any other
person.
The
following table sets forth certain information with respect to beneficial
ownership of our common stock based on issued and outstanding shares of common
stock, by:
•
|
Each
person known to be the beneficial owner of 5% or more of the outstanding
common stock of our Company;
|
•
|
Each
named executive officer;
|
•
|
Each
director; and
|
•
|
All
of the executive officers and directors as a
group.
|
The
number of shares of our common stock outstanding as of April 29, 2010 is
11,650,442, which excludes 156,250 shares of common stock that are issuable upon
the exercise of outstanding warrants. Unless otherwise indicated, the persons
and entities named in the table have sole voting and sole investment power with
respect to the shares set forth opposite the stockholder’s name, subject to
community property laws, where applicable. Unless otherwise indicated, the
address of each stockholder listed in the table is c/o ZST Digital Networks,
Inc., 206 Tongbo Street, Boyaxicheng Second Floor, Zhengzhou City, Henan
Province, People’s Republic of China 450007.
Name and Address of
Beneficial Owner
|
Title
|
Amount and
Nature of
Beneficial
Ownership
|
Percent of
Class
Beneficially
Owned (1)
|
|||||||
Directors
and Executive Officers:
|
||||||||||
Zhong
Bo
|
Chairman
of the Board of Directors and Chief Executive Officer
|
5,002,251
|
(2)
|
42.94
|
%
|
|||||
John
Chen
|
Chief
Financial Officer
|
25,000
|
(3)
|
*
|
||||||
Zhong
Lin
|
Director
and Chief Operating Officer
|
—
|
—
|
|||||||
Yang
Ai Mei
|
Director
|
—
|
—
|
|||||||
Tian
Li Zhi
|
Director
|
—
|
—
|
|||||||
Sheng
Yong
|
Director
|
—
|
—
|
|||||||
Liu
Hui Fang
|
Director
|
—
|
—
|
|||||||
All
Officers and Directors as a Group (total of eight (8)
persons)
|
|
5,027,251
|
43.06
|
%
|
||||||
5%
Stockholders:
|
|
|||||||||
Richard
Rappaport
1900
Avenue of the Stars,
Suite
310
Los
Angeles, CA 90067
|
|
736,290
|
(4)
|
6.32
|
%
|
*
Indicates lesss than 1%.
15
(1)
|
Based
on 11,650,442 shares of common stock issued and outstanding as of April
29, 2010.
|
(2)
|
Includes
4,559,393 shares of common stock owned by Mr. Zhong. Also includes 442,858
shares of common stock owned by Mr. Zhong’s wife, Wu Dexiu. Mr. Zhong may
be deemed the beneficial owner of these securities since he has voting and
investment control over the
securities.
|
(3)
|
Includes
options to purchase 25,000 shares of common stock exercisable within 60
days of the date of this report.
|
(4)
|
Includes
292,993 shares of common stock owned by Mr. Rappaport. Also includes
61,425 shares of common stock owned by each of the Amanda
Rappaport Trust and the Kailey Rappaport Trust as well as 320,447 shares
of common stock owned by WestPark Capital Financial Services, LLC. Mr.
Rappaport, as Trustee of the Rappaport Trusts and Chief Executive Officer
and Chairman of WestPark Capital Financial Services, LLC, may be deemed
the indirect beneficial owner of these securities since he has sole voting
and investment control over the
securities.
|
Securities
Authorized for Issuance Under Equity Compensation Plans
As of
December 31, 2009, the Company did not have an equity compensation
plan.
16
ITEM
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
INDEPENDENCE.
On
January 9, 2009, we completed the Share Exchange with World Orient and the
former stockholders of World Orient. At the closing, World Orient became our
wholly-owned subsidiary and 100% of the issued and outstanding securities of
World Orient were exchanged for securities of the Company. An aggregate of
806,408 shares of common stock were issued to the stockholders of World Orient.
As of the close of the Share Exchange, the former stockholders of World Orient
owned approximately 22% of our issued and outstanding common stock.
Upon the
closing of the Share Exchange, the Company’s board of directors resigned in full
and appointed Zhong Bo, Zhong Lin, Yang Ai Mei, Tian Li Zhi, Sheng Yong and Liu
Hui Fang to the board of directors of our Company, with Zhong Bo serving as
Chairman. The Company’s board of directors also appointed Zhong Bo as Chief
Executive Officer, Zeng Yun Su as Chief Financial Officer and Corporate
Secretary, Zhong Lin as Chief Operating Officer and Xue Na as Deputy General
Manager and President of the Labor Union, each of whom were executive officers
and/or directors of Zhengzhou ZST. Also in connection with the Share Exchange,
we paid $350,000 to WestPark and $125,000 to a third party unaffiliated with the
Company, SRKP 18 or WestPark.
Purchase
Right and Share and Warrant Cancellation
On
January 14, 2009, Zhong Bo, our Chief Executive Officer and Chairman of the
Board, Wu Dexiu, Huang Jiankang, Sun Hui and Li Yuting (the “ZST Management”)
each entered into a Common Stock Purchase Agreement pursuant to which the
Company issued and the ZST Management agreed to purchase an aggregate of
5,090,315 shares of our common stock at a per share purchase price of $0.6907
(the “Purchase Right”). The purchase price for the shares was paid in full on
May 25, 2009. Each of the stockholders and warrantholders of the Company prior
to the Share Exchange agreed to cancel 0.3317 shares of common stock and
warrants to purchase 0.5328 shares of common stock held by each of them for each
one (1) share of common stock purchased by the ZST Management pursuant to the
Purchase Right (the “Share and Warrant Cancellation”). Pursuant to the Share and
Warrant Cancellation, an aggregate of 1,688,532 shares of common stock and
warrants to purchase 2,712,283 shares of common stock held by certain of our
stockholders and warrantholders prior to the Share Exchange were
cancelled.
Private
Placement and Underwriting Services
Richard
Rappaport, our President and one of our controlling stockholders prior to the
Share Exchange, indirectly holds a 100% interest in WestPark. Anthony C.
Pintsopoulos, our officer, director and significant stockholder prior to the
Share Exchange, is the Chief Financial Officer of WestPark. Kevin DePrimio and
Jason Stern, each employees of WestPark, are also stockholders of the Company.
Thomas J. Poletti is a former stockholder of the Company and a partner of
K&L Gates LLP, our U.S. legal counsel. Richard Rappaport is the
sole owner of the membership interests of WestPark Capital Financial Services,
LLC. Each of Messrs. Rappaport and Pintsopoulos resigned from all of
their executive and director positions with the Company upon the closing of the
Share Exchange.
WestPark,
the placement agent for our $4.98 million equity financing, received a
commission equal to 12% of the gross proceeds from the financing plus a 4%
non-accountable expense allowance. No other consideration was paid to WestPark
or SRKP 18 in connection with the Share Exchange or Private Placement.
Furthermore, in connection with the initial closing of the Private Placement,
the Company issued a promissory note in the principal amount of $170,000,
bearing no interest (the “Note”), to WestPark Capital Financial Services, LLC,
the parent company of WestPark. The principal was due and payable by us on or
before the earlier of (a) thirty (30) days from the date of issuance of the Note
or (b) upon the receipt by us of at least $4 million in the Private
Placement. We repaid the Note in full on January 23, 2009 using the
proceeds from the second closing of the Private Placement.
In
addition, WestPark acted as a co-underwriter, along with Rodman & Renshaw,
LLC, in our public offering that we closed in October 2009. We sold a
total of 3,125,000 shares of common stock in the public offering at $8.00 per
share, for gross proceeds of approximately $25 million. As
compensation for its services, WestPark received discounts, commissions and
management fees of $348,136, a non-accountable expense allowance of $100,000,
and reimbursement of roadshow expenses of approximately $6,100 and legal counsel
fees (excluding blue sky fees) of $40,000. WestPark also received a
five-year warrant to purchase 62,500 shares of our common stock at an exercise
price of $10.00 per share.
17
Patent
License Agreement and Patent Transfer
Our Chief
Executive Officer, Zhong Bo, has legal ownership of one patent in China that we
rely on in the operation of our business. On January 9, 2009, we entered into a
patent license agreement with Mr. Zhong for the right to use such patent in the
operation of our business. In addition, we also applied to SIPO for the transfer
of the patent to Zhengzhou ZST and SIPO accepted the application regarding the
patent transfer to Zhengzhou ZST on December 31, 2008. The patent
transfer to Zhengzhou ZST was approved on January 9, 2009. Mr. Zhong did not
receive any additional consideration for the license of the intellectual
property rights to us, other than the execution of the patent license agreement
being a condition to the closing of the Share Exchange.
Policy
for Approval of Related Party Transactions
In
February 2009, we established an Audit Committee and adopted an Audit Committee
Charter. The Audit Committee Charter contains our policy for approval
of related party transactions. Our policy is to have our Audit
Committee review and pre-approve any related party transactions and other
matters pertaining to the integrity of management, including potential conflicts
of interest, trading in our securities, or adherence to standards of business
conduct as required by our policies.
Director
Independence
See the
section entitled “Directors, Executive Officers and Corporate Governance”
beginning on page 3 for a discussion of board member
independence.
18
ITEM
14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
During
the fiscal years ended December 31, 2009 and 2008, we retained Kempisty
& Company, PC, CPAs and AJ. Robbins, P.C., Certified Public Accountants,
respectively, to provide services as follows:
Fees
for the Year Ended
December
31,
|
||||||||
Services
|
2009
|
2008
|
||||||
Audit
fees (1)
|
$ |
458,500
|
$ | 15,370 | ||||
Audit-related
fees (2)
|
-
|
- | ||||||
Tax
fees (3)
|
3,500
|
1,855 | ||||||
All
other fees (4)
|
-
|
- | ||||||
Total
audit and non-audit fees
|
$ |
462,000
|
$ | 17,225 |
___________
(1) These
are fees for professional services performed by our principal accountants for
the audit of our annual financial statements, review of our quarterly reports,
and review of our Registration Statements on Form S-1.
(2) No
fees were billed for each of fiscal year 2009 and fiscal year 2008 for assurance
and related services by our principal accountants reasonably related to the
performance of the audit or review of the Company’s financial
statements.
(3) These
are tax return preparation fees for fiscal year 2009 and fiscal year 2008 paid
to our principal accountants.
(4) No
fees were billed for each of fiscal year 2009 and fiscal year 2008 for products
and services provided by our principal accountants, other than the services
reported above.
Pre-Approval
Policy
In
accordance with our Audit Committee Charter, the Audit Committee pre-approves
all auditing services and permitted non-audit services, if any, including tax
services, to be performed for us by our independent auditor, subject to the de minimis
exceptions for non-audit services described in Section 10A(i)(1)(B) of the
Exchange Act which are approved by the Audit Committee prior to the completion
of the audit. The scope of the pre-approval shall include pre-approval of all
fees and terms of engagement. The Audit Committee may form and delegate
authority to subcommittees consisting of one or more members when appropriate,
including the authority to grant pre-approvals of audit and permitted non-audit
services, provided that decisions of such subcommittee to grant pre-approvals
shall be presented to the full Audit Committee at its next scheduled
meeting.
19
SIGNATURES
Pursuant
to the requirements of Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
ZST
DIGITAL NETWORKS, INC.
(Registrant)
|
||
April
30, 2010
|
By:
|
/s/
Zhong Bo
|
Zhong
Bo
|
||
Chief
Executive Officer and Chairman of the Board
(Principal
Executive Officer)
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
SIGNATURE
|
TITLE
|
DATE
|
||
/s/
Zhong Bo
|
Chief
Executive Officer and Chairman of the Board
|
April
30, 2010
|
||
Zhong
Bo
|
(Principal
Executive Officer)
|
|||
/s/
John Chen
|
Chief
Financial Officer
|
April
30, 2010
|
||
John
Chen
|
(Principal
Financial and Accounting Officer)
|
|||
/s/
Zhong Lin
|
Chief
Operating Officer and Director
|
April
30, 2010
|
||
Zhong
Lin
|
||||
/s/
Xue Na
|
April
30, 2010
|
|||
Xue
Na
|
Director
and Corporate Secretary
|
|||
/s/
Yang Ai Mei
|
April
30, 2010
|
|||
Yang
Ai Mei
|
Director
|
|||
/s/
Tian Li Zhi
|
April
30, 2010
|
|||
Tian
Li Zhi
|
Director
|
|||
/s/
Sheng Yong
|
April
30, 2010
|
|||
Sheng
Yong
|
Director
|
|||
/s/
Liu Hui Fang
|
April
30, 2010
|
|||
Liu
Hui Fang
|
Director
|
|||
20
EXHIBIT
INDEX
Exhibit
No.
|
Exhibit
Description
|
|
2.1
|
Equity
Purchase Agreement dated October 10, 2008 by and among Zhong Bo, Wu Dexiu,
Huang Jiankang, Sun Hui, Li Yuting and Everfair Technologies, Ltd.
(translated to English) (incorporated by reference from Exhibit 2.1 to the
Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 15, 2009).
|
|
2.2
|
Share
Exchange Agreement dated December 11, 2008 by and among the Registrant,
World Orient Universal Limited and all of the stockholders of World Orient
Universal Limited (incorporated by reference from Exhibit 2.2 to the
Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 15, 2009).
|
|
2.3
|
Amendment
No. 1 to Share Exchange Agreement dated January 9, 2009 by and among the
Registrant, World Orient Universal Limited and all of the stockholders of
World Orient Universal Limited (incorporated by reference from Exhibit 2.3
to the Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 15, 2009).
|
|
3.1
|
Certificate
of Incorporation (incorporated by reference from Exhibit 3.1 to the
Registration Statement on Form 10-SB filed with the Securities and
Exchange Commission on November 26, 2007).
|
|
3.2
|
Bylaws
(incorporated by reference from Exhibit 3.2 to the Registration Statement
on Form 10-SB filed with the Securities and Exchange Commission on
November 26, 2007).
|
|
3.3
|
Certificate
of Designations, Preferences and Rights of Series A Convertible Preferred
Stock as filed with the Secretary of State of Delaware on January 5, 2009
(incorporated by reference from Exhibit 3.3 to the Current Report on Form
8-K filed with the Securities and Exchange Commission on January 15,
2009).
|
|
3.4
|
Certificate
of Ownership and Merger effecting name change filed with the Secretary of
State of Delaware on January 9, 2009 (incorporated by reference from
Exhibit 3.4 to the Current Report on Form 8-K filed with the Securities
and Exchange Commission on January 15, 2009).
|
|
3.5
|
Certificate
of Amendment to the Company’s Certificate of Incorporation effecting
reverse stock split as filed with the Secretary of State of Delaware on
October 6, 2009 (incorporated by reference from Exhibit 3.1 to the Current
Report on Form 8-K filed with the Securities and Exchange Commission on
October 7, 2009).
|
|
4.1
|
Form
of Warrant dated January 3, 2007 (incorporated by reference from Exhibit
4.1 to the Registration Statement on Form 10-SB (File No. 000-52934) filed
with the Securities and Exchange Commision on November 26,
2007).
|
|
10.1
|
Form
of Subscription Agreement (incorporated by reference from Exhibit 10.1 to
the Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 15, 2009).
|
|
10.2
|
Registration
Rights Agreement dated January 9, 2009 by and between the Registrant and
the Stockholders (incorporated by reference from Exhibit 10.2 to the
Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 15, 2009).
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21
10.3
|
Share
and Warrant Cancellation Agreement dated January 9, 2009 by and between
the Registrant and the Stockholders (incorporated by reference from
Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities
and Exchange Commission on January 15, 2009).
|
|
10.4
|
Promissory
Note dated January 9, 2009 by and between SRKP 18, Inc. and WestPark
Capital, Inc (incorporated by reference from Exhibit 10.4 to the Current
Report on Form 8-K filed with the Securities and Exchange Commission on
January 15, 2009).
|
|
10.5
|
Form
of 2008 Employment Agreement entered into with executive officers
indicated in Schedule A attached to the Form of Agreement (translated to
English) (incorporated by reference from Exhibit 10.5 to the Current
Report on Form 8-K filed with the Securities and Exchange Commission on
January 15, 2009).
|
|
10.6
|
Patent
License Agreement dated January 9, 2009 by and between Zhengzhou Shenyang
Technology Company Limited and Zhong Bo (translated to English)
(incorporated by reference from Exhibit 10.6 to the Current Report on Form
8-K filed with the Securities and Exchange Commission on January 15,
2009).
|
|
10.7
|
House
Lease Agreement dated August 29, 2007 by and between Zhengzhou Green City
Advertisement Co., Ltd. and Zhengzhou Shenyang Technology Company Limited
(translated to English) (incorporated by reference from Exhibit 10.7 to
the Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 15, 2009).
|
|
10.8
|
Accounts
Receivable Financing Agreement dated January 4, 2008, as amended, by and
between Zhengzhou Shenyang Technology Company Limited and Raiffeisen
Zentralbank Oesterreich AG Beijing Branch (translated to English)
(incorporated by reference from Exhibit 10.8 to the Current Report on Form
8-K filed with the Securities and Exchange Commission on January 15,
2009).
|
|
10.9
|
Receivable
Pledge Agreement dated January 4, 2008 by and between Zhengzhou Shenyang
Technology Company Limited and Austria Central Cooperation Bank Beijing
Branch (translated to English) (incorporated by reference from Exhibit
10.9 to the Current Report on Form 8-K filed with the Securities and
Exchange Commission on January 15, 2009).
|
|
10.10
|
Form
of Common Stock Purchase Agreement dated January 14, 2009 (incorporated by
reference from Exhibit 10.1 to the Current Report on Form 8-K filed with
the Securities and Exchange Commission on January 21,
2009).
|
|
10.11
|
House
Lease Agreement dated April 24, 2009 by and between Zhengzhou Zhong Xing
Real Estate Co., Ltd. and Zhengzhou Shenyang Technology Company Limited
(translated to English) (incorporated by reference from Exhibit 10.1 to
the Quarterly Report on Form 10-Q filed with the Securities and Exchange
Commission on June 12, 2009).
|
|
10.12
|
Value
Added Service Cooperation Agreement dated March 19, 2009 by and between
China Unicom Henan Branch and Zhengzhou Shenyang Technology Company
Limited (translated to English).
|
|
10.13
|
Employment
Agreement dated October 8, 2009 by and between the Registrant and John
Chen, M.D. (incorporated by reference from Exhibit 10.1 to the Current
Report on Form 8-K filed with the Securities and Exchange Commission on
October 9, 2009).
|
|
10.14
|
Stock
Option Agreement by and between the Registrant and John Chen, M.D.
(incorporated by reference from Exhibit 10.1 to the Current Report on Form
8-K filed with the Securities and Exchange Commission on October 21,
2009).
|
22
10.15
|
Form
of Stock Purchase Agreement by and between the Registrant and John Chen,
M.D. (incorporated by reference from Exhibit 10.15 to the Registration
Statement on Form S-1/A (File No. 333-160343) filed with the Securities
and Exchange Commission on October 16, 2009).
|
|
10.16
|
GPS
Device Supply and Terminal Service Agreement dated October 25, 2009
(incorporated by reference from Exhibit 10.1 to the Current Report on Form
8-K filed with the Securities and Exchange Commission on November 10,
2009).
|
|
10.17
|
Retention
Agreement dated November 14, 2009 by and between the Registrant and Zhong
Lin.
|
|
10.18
|
Employment
Agreement dated December 13, 2009 by and between the Registrant and Zhong
Bo.
|
|
10.19
|
Employment
Agreement dated December 14, 2009 by and between the Registrant and Zhong
Lin.
|
|
10.20
|
Employment
Agreement dated December 13, 2009 by and between the Registrant and Xue
Na.
|
|
10.21
|
Consulting
Agreement dated December 30, 2009 by and between the Registrant and
Finance Access, Inc.
|
|
10.22
|
Professional
Services Agreement dated October 28, 2009 by and between the Registrant
and Fabulous Worldwide Limited.
|
|
10.23
|
Professional
Services Agreement dated Octobe 28, 2009 by and between the Registrant and
Practical Worldwide Limited.
|
|
14.1
|
Code
of Business Conduct and Ethics.
|
|
21.1
|
List
of Subsidiaries (incorporated by reference from Exhibit 21.1 to the
Current Report on Form 8-K filed with the Securities and Exchange
Commission on January 15, 2009).
|
|
31.1
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.
|
|
32.1*
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of
2002.
|
__________________
* This exhibit
shall not be deemed “filed” for purposes of Section 18 of the Securities
Exchange Act of 1934 or otherwise subject to the liabilities of that section,
nor shall it be deemed incorporated by reference in any filing under the
Securities Act or the Securities Exchange Act of 1934, whether made before or
after the date hereof and irrespective of any general incorporation language in
any filings.
23