Attached files
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| EX-32.1 - YUHE INTERNATIONAL, INC. | v216231_ex32-1.htm |
| EX-32.2 - YUHE INTERNATIONAL, INC. | v216231_ex32-2.htm |
| EX-31.2 - YUHE INTERNATIONAL, INC. | v216231_ex31-2.htm |
| EX-31.1 - YUHE INTERNATIONAL, INC. | v216231_ex31-1.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 2)
(Mark One)
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Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the fiscal year ended December 31, 2009 .
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or
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Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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For the transition period from __________ to __________.
Commission File Number 001-34512
YUHE INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
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Nevada
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87-0569467
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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301 Hailong Street
Hanting District, Weifang, Shandong Province
The People’s Republic of China
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(Address including zip code of principal executive offices)
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Registrant’s telephone number, including area code (86) 536 736 3688
Securities registered pursuant to Section 12(b) of the Act: Common stock, $0.001 par value
Name of each exchange on which registered: NASDAQ Capital 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 Nox
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 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 (§232.45 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
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.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 definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer o
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Accelerated filer o
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Non-accelerated filer o
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Smaller reporting company x
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x
The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant as of June 30, 2009, based upon the closing price of the common stock as reported by the OTC Bulletin Board under the symbol “YUII” on such date, was approximately $64,461,000.
There were 15,722,180 shares of the registrant’s common stock issued and outstanding as of March 1, 2010.
EXPLANATORY NOTE
This Form 10-K/A (Amendment No. 2) is being filed by Yuhe International, Inc. (the “Company”) to amend the Company’s Form 10-K (“Initial 10-K”) for the year ended December 31, 2009 filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2010 and the Form 10-K/A (Amendment No. 1) filed with the SEC on October 15, 2010 (the Initial 10-K and Amendment No. 1, collectively the “Original Filings”) as a result of comments received from the SEC in connection with its review of the Company’s periodic reports. This Form 10-K/A (Amendment No. 2) is being filed to amend the Original Filings by supplementing certain disclosures in Item 9A “Controls and Procedures – Disclosure Controls and Procedures.” The last sentence of the first paragraph in Item 9A “Controls and Procedures – Disclosure Controls and Procedures” has been changed to “Based on that evaluation, Messrs. Gao and Hu concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2009.”
Other than as set forth in amended Item 9A, this Form 10−K/A (Amendment No. 2) does not reflect events occurring after the filing of the Original Filings, and no other information in the Original Filings is amended hereby. Other events or circumstances occurring after the dates of the Original Filings or other disclosures necessary to reflect subsequent events have not been updated subsequent to the dates of the Original Filings except that the Initial 10-K was supplemented by Amendment No. 1. Accordingly, this Form 10−K/A (Amendment No. 2) should be read in conjunction with the Original Filings and our filings with the SEC subsequent to the Original Filings.
YUHE INTERNATIONAL, INC.
FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2009
INDEX
Table of Contents
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Page
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PART I
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Item 9A.
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Controls and Procedures
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1
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PART IV
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Item 15.
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Exhibits and Financial Statement Schedules
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4
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Signatures
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5
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Exhibit 31.1
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Exhibit 31.2
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Exhibit 32.1
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Exhibit 32.2
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(a)
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Disclosure Controls and Procedures
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The Company’s management, under the supervision and with the participation of its chief executive officer and chief financial officer, Messrs. Gao Zhentao and Hu Gang, respectively, evaluated the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2009, the end of the period covered by this Report. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports, such as this Form 10-K, that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Based on that evaluation, Messrs. Gao and Hu concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2009.
Our disclosure controls and procedures are designed to provide reasonable, not absolute, assurance that the objectives of our disclosure control system are met. Because of inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected.
Subsequent to the filing of the Initial 10-K, the Company’s management determined that the disclosure under Item 1 “Description of Business – History and Background – Corporate Reorganization Transactions” was incomplete because it did not describe the general, verbal and informal understanding that Mr. Kunio Yamamoto and Mr. Gao Zhentao reached at the time of the Company’s corporate restructuring in 2007 pursuant to which all or part of the shares of the Company’s common stock issued to Mr. Kunio Yamamoto would be transferred to Mr. Gao Zhentao in the future in consideration of Mr. Gao Zhentao’s commitment to management of the Company’s business operations and future achievement of the financial targets as set forth in the Make Good Agreement dated March 12, 2008. Accordingly, the Company filed Amendment No.1 to the Form 10-K in order to, among other things, amend the Initial 10-K by supplementing certain disclosures in Item 1 “Description of Business - History and Background – Corporate Reorganization Transactions.”
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(b)
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Management’s report on internal control over financial reporting
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Management of the Company, under the supervision of the chief executive officer and chief financial officer, is responsible for establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, is a process designed by, or under the supervision of, the chief executive officer and chief financial officer and effected by the board of directors, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external reporting purposes in accordance with U.S. GAAP. Internal control over financial reporting includes those policies and procedures that:
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(i)
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Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the Company’s assets;
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(ii)
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Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that the Company’s receipts and expenditures are being made only in accordance with appropriate authorization of the Company’s management and board of directors; and
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(iii)
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Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.
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In making its assessment of internal control over financial reporting, management, under the supervision and with the participation of the chief executive officer and chief financial officer, used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework.
Pursuant to Rule 15d-15 of the Exchange Act, the Company’s management, under the supervision and with the participation of its chief executive officer and chief financial officer, Messrs. Gao Zhentao and Hu Gang, respectively, evaluated the effectiveness of the Company’s internal control over financial reporting as of December 31, 2009. Based on this evaluation, the Company’s chief executive officer and chief financial officer concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2009.
1
A material weakness in internal control over financial reporting is defined as 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 Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
Management concluded that a material weakness existed as of December 31, 2009 with respect to compliance with Section 402 of the Sarbanes-Oxley Act of 2002. As reported in the Company’s Annual Report on Form 10-K/A filed on June 3, 2009, the Company concluded that certain related party loans between the Company and Shandong Yuhe Food Group Co., Ltd., “Yuhe Food”, constituted prohibited transactions under Section 402 of the Sarbanes-Oxley Act of 2002. Although all such related party loans had been repaid as of the end of 2009, because the Company continued to make payments under certain arrangements to Yuhe Food, such payments resulted in related party loans in January and February 2010. As of December 31, 2009, the Company had caused loans previously made to related parties to be fully repaid. However, because of the Company’s inability to eliminate the occurrence of other related party loans in January and February 2010, which were subsequently repaid in full in February 2010, the Company concluded that a material weakness continued to exist with respect to its compliance with Section 402 of the Sarbanes-Oxley Act of 2002. In addition, there were certain audit adjustments identified by Grant Thornton related to the Company’s financial statements for the year ended December 31, 2009 indicating a material weakness of the Company’s internal control over financial reporting. The adjustments mainly related to transferring amounts from work-in-progress to fixed assets, separating the current portion of long term debt from long term debt, and verifying the nature of capital leases and operating leases.
In order to address the foregoing material weaknesses, the Company has taken or is taking the following remedial measures:
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The Company will no longer make payments to any related parties that would be classified as a loan; and
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Hiring an independent forensic accountant to review prior related party payments and to suggest ways to eliminate their recurrence, and based on the result of this review, discussing the hiring of a new controller who will report directly to the board of directors with responsibility for reviewing payments to eliminate any related party loan or related party transaction or any other impermissible activity.
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The Company believes that the foregoing steps will remediate the material weaknesses identified above, and the Company will continue to monitor the effectiveness of these steps and make any changes that the Company’s board of directors deems appropriate.
Separately, the Company has determined to adopt the measures set forth below to generally improve its corporate governance and oversight:
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The Company is in the process of arranging additional training for its accounting staff;
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The Company is engaging external professional accounting or consultancy firms to assist it in the preparation of the US GAAP accounts;
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Due to the scarcity of qualified candidates with extensive experience in U.S. GAAP reporting and accounting in the region, the Company has not yet been able to hire sufficient internal audit resources. The Company intends to enhance its internal audit function by increasing its search for qualified candidates with assistance from recruiters and through referrals; and
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The Company has allocated significant financial and human resources to strengthen its internal control structure and has been actively working with external consultants to assess its data collection, financial reporting and control procedures and to strengthen its internal control over financial reporting.
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Other than as described above, there were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation performed that occurred during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.
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Inherent Limitations on Effectiveness of Controls
The Company’s management, including the chief executive officer and chief financial officer, does not expect that the Company’s disclosure controls and procedures or its internal control over financial reporting will prevent or detect all error and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the Company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.
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PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
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*31.1
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Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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*31.2
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Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
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*32.1
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Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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*32.2
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Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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*
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Filed herewith
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4
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: March 29, 2011
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/s/ Gao Zhentao
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Gao Zhentao
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Chief Executive Officer and Chairman of the Board of Directors
(Principal Executive Officer)
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/s/ Hu Gang
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Hu Gang
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Chief Financial Officer
(Principal Financial Officer)
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*
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Jiang Yingjun (also known as Jiang Yiqiang)
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Chief Accounting Officer
(Principal Accounting Officer)
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*
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Peter Li
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Director
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*
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Liu Yaojun
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Director
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*
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Greg Huett
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Director
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*
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Han Chengxiang
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Director
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*By:
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/s/ Gao Zhentao
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Gao Zhentao
As Attorney-in-fact
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