SEC Form 4
| FORM 4 | UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934 or Section 30(h) of the Investment Company Act of 1940 |
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| Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b). | |||||||||||||||||
1. Name and Address of Reporting Person*
(Street)
| 2. Issuer Name and Ticker or Trading Symbol Keyuan Petrochemicals, Inc. [ KEYP ] | 5. Relationship of Reporting Person(s) to Issuer (Check all applicable)
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| 3. Date of Earliest Transaction (Month/Day/Year) 07/15/2016 | ||||||||||||||||||||||||||
| 4. If Amendment, Date of Original Filed (Month/Day/Year) | 6. Individual or Joint/Group Filing (Check Applicable Line)
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| Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned | ||||||||||
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| 1. Title of Security (Instr. 3) | 2. Transaction Date (Month/Day/Year) | 2A. Deemed Execution Date, if any (Month/Day/Year) | 3. Transaction Code (Instr. 8) | 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) | 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) | 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) | 7. Nature of Indirect Beneficial Ownership (Instr. 4) | |||
| Code | V | Amount | (A) or (D) | Price | ||||||
| Common Stock, par value $0.001(5)(6) | 08/11/2016 | C | 5,493,001 | A | $3.64 | 53,051,001 | I | By Apex Smart Limited, an entity 100% owned by the reporting person. | ||
| Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities) | |||||||||||||||
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| 1. Title of Derivative Security (Instr. 3) | 2. Conversion or Exercise Price of Derivative Security | 3. Transaction Date (Month/Day/Year) | 3A. Deemed Execution Date, if any (Month/Day/Year) | 4. Transaction Code (Instr. 8) | 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) | 6. Date Exercisable and Expiration Date (Month/Day/Year) | 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) | 8. Price of Derivative Security (Instr. 5) | 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) | 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) | 11. Nature of Indirect Beneficial Ownership (Instr. 4) | ||||
| Code | V | (A) | (D) | Date Exercisable | Expiration Date | Title | Amount or Number of Shares | ||||||||
| Series B Preferred Stock(1)(2)(3)(4)(6) | $3.75 | 07/15/2016 | S | 5,333,340 | 09/28/2010 | 09/28/2014 | Common Stock, par value $0.001 per share | 5,493,001 | $0.326 | 5,333,340 | I | By Apex Smart Limited, an entity 100% owned by the reporting person. | |||
| Series B Preferred Stock(5)(6) | $3.64 | 08/11/2016 | C | 5,333,340 | 09/28/2010 | 09/28/2014 | Common Stock, par value $0.001 per share | 5,493,001 | $0.005 | 0 | I | By Apex Smart Limited, an entity 100% owned by the reporting person. | |||
| Explanation of Responses: |
| 1. On July 11, 2016, Keyuan Petrochemicals, Inc. (the "Company"), Delight Reward Limited ("Delight Reward"), Chunfeng Tao (the "Reporting Person"), and other affiliates of the Company entered into a share purchase and settlement agreement (the "Settlement Agreement") with Dragon State International Limited ("Dragon State") among others, pursuant to which Dragon State agreed to transfer the securities of the Company it owned to Delight Reward and waive all claims and liabilities that Dragon State or its affiliated companies or individuals had brought or would bring against the Company, Delight Reward and certain affiliates of the Company for an aggregate consideration of RMB 18 million or equivalent U.S. dollars. The Settlement Agreement provided that the purchase price for the transfer of the securities pursuant to the Settlement Agreement was RMB 12 million. On July 15, 2016, after execution of the Settlement Agreement, the Company paid Dragon State. |
| 2. On September 28, 2010, Dragon State had purchased from the Company for an aggregate price of $20 million, 5,333,334 shares of Series B preferred stock, par value $0.001 per share (the "Series B Shares"), convertible to a certain number of shares of common stock, par value $0.001 per share (the "Common Stock") (the Common Stock that are convertible from the Series B Shares, the "Convertible Shares"), together with 800,001 series C warrants to purchase 800,001 shares of the Company's Common Stock at a price of $4.50 per share (subject to adjustments) and 800,001 series D warrants to purchase 800,001 shares of the Company's Common Stock at a price of $5.25 per share (subject to adjustments, together, the "Warrants") in a private placement in reliance upon the exemption from securities registration afforded by Regulation S as promulgated under the Securities Act of 1933, as amended. |
| 3. Under the original terms of the Series B Shares, the Series B Shares would automatically expire and convert into shares of Common Stock on the third anniversary of the issuance subject to satisfaction of certain requirements. On September 24, 2013, Dragon State and the Company amended the terms of the Series B Shares to extend the expiration date from September 28, 2013 to September 28, 2014. |
| 4. On October 28, 2014, Dragon State filed a complaint against, among others, the Company and the Reporting Person, seeking rescission of the securities purchase agreement dated September 28, 2010, and the return of $20 million, and in the alternative, seeking monetary damages to be determined at a trial but not less than $20 million (the "Complaint"). In connection with the Complaint, a consent order was issued by the District Court for the Southern District of New York whereby the Company and the Reporting Person agreed that the expiration date of the Series B Shares should be tolled pending the resolution of the Complaint. On July 21, 2016, the Complaint was dismissed by the District Court for the Southern District of New York in connection with the execution of the Settlement Agreement. While there is uncertainty with respect to whether the requirements of automatic conversion of the Series B Shares were satisfied, the Series B Shares were electively converted on August 11, 2016. |
| 5. In connection with the execution of the Settlement Agreement and the payment subsequently made by the Company to Dragon State thereunder, on August 4, 2016, Delight Reward entered into a side agreement with the Company (the "Side Agreement"). Under the Side Agreement, Delight Reward agreed not to claim, or attempt to claim for any reason and in any circumstance, that the Warrants are exercisable, and pay to the Company for each Convertible Share the highest sale price of the Company's Common Stock per share as reported on the OTC Pink Marketplace during a period commencing on the date of the Settlement Agreement, which was $0.005 per share of Common Stock, for an aggregate purchase price of $27,465.01. These funds were taken from cash on hand. On August 11, 2016, the Series B Shares were converted into 5,493,001 shares of Common Stock electronically. |
| 6. Delight Reward is 85.56% owned by Apex Smart Limited, a British Virgin Islands company, which is 100% owned and controlled by the Reporting Person. |
| /s/ Chunfeng Tao | 08/11/2016 | |
| ** Signature of Reporting Person | Date | |
| Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly. | ||
| * If the form is filed by more than one reporting person, see Instruction 4 (b)(v). | ||
| ** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a). | ||
| Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure. | ||
| Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number. | ||