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
| ¨ | TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE EXCHANGE ACT OF 1934 |
For the transition period from _____ to _________
Commission file number 000-53155
VLOV, INC.
(Exact name of registrant as specified in its charter)
| Nevada | 20-8658254 | |
| (State or other jurisdiction of incorporation or organization) | (IRS Employer Identification No.) |
11/F., Xiamen Guanyin Shan International Commercial Operation Centre, A3-2 124
Hubin Bei Road, Siming District
Xiamen, Fujian Province
People’s Republic of China
(Address of Principal Executive Offices)
(86592) 2345999
(Issuer Telephone Number)
N/A
(Former name or former address, if changed since last report)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þ
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 ¨ No þ
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 þ No ¨
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 herein, 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. ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨ | Accelerated filer ¨ |
Non-accelerated filer ¨ | Smaller reporting company þ |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No þ
As of June 30, 2009, the aggregate market value of the registrant's common stock, $0.00001 par value, held by non-affiliates was approximately $14.5 million based on the closing price of $2.50 as reported on the Over-the Counter Bulletin Board on such date.
The company had a total of 16,667,957 shares of common stock outstanding as of April 6, 2010.
EXPLANATORY NOTE
This Form 10-K/A (“Amendment No.1”) is being filed by VLOV, Inc. (the “Company”) to amend the Company’s Form 10-K for the year ended December 31, 2009 filed with the Securities and Exchange Commission (“SEC”) on April 15, 2010 (“Initial 10-K”). This Amendment No.1 is filed to (i) amend the disclosures in the “Management’s Annual Report on Internal Controls over Financial Reporting” section under Item 9A, and (ii) amend and supplement the disclosures in the “Business Experience Descriptions,” “Involvement in Certain Legal Proceedings” and “Section 16(a) of the Exchange Act” sections under Item 10.
These changes were made, and this Amendment No. 1 is filed in connection with, a letter from the SEC dated September 20, 2010 regarding Amendment No. 2 to the Company’s Registration Statement on Form S-1 (333-163803). Except as required to reflect the changes noted above, this Amendment No.1 does not reflect events occurring after the filing of the Initial 10-K on April 15, 2010, and no other information in the Initial 10-K is amended hereby. Other events or circumstances occurring after the date of the Initial 10-K or other disclosures necessary to reflect subsequent events have not been updated subsequent to the date of the Initial 10-K. Accordingly, this Amendment No.1 should be read in conjunction with the Initial 10-K and the Company’s filings with the SEC subsequent to the filing of the Initial 10−K.
PART II.
ITEM 9A. CONTROLS AND PROCEDURES
Management’s Annual Report on Internal Control over Financial Reporting
Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America. The Company's internal control over financial reporting includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) 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.
Any system of internal control, no matter how well designed, has inherent limitations, including the possibility that a control can be circumvented or overridden and misstatements due to error or fraud may occur and not be detected in a timely manner. Also, because of changes in conditions, internal control effectiveness may vary over time. Accordingly, even an effective system of internal control will provide only reasonable assurance with respect to financial statement preparation.
Our management assessed the effectiveness of the Company's internal control over financial reporting based on criteria in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such evaluation, our management concluded that as of December 31, 2009, and as of the date that the evaluation of the effectiveness of our internal control over financial reporting was completed, our internal control over financial reporting was not effective because we did not maintain effective controls over the preparation, review, presentation and disclosure of amounts related to our sales of preferred stock, common stock and warrants in November and December 2009 that were included in our consolidated balance sheets and consolidated statements of income. Such effective controls were not in place because the Company’s financial control environment was not designed effectively to mitigate material misstatement from being prevented or detected. Due to their relative inexperience, the Company’s accounting staff was not able to properly account for such complex transactions in a timely manner. Accordingly, management concluded that this control deficiency constituted a material weakness.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Business Experience Descriptions
Set forth below is a summary of our executive officers’ and directors’ business experience for the past 5 years.
Qingqing Wu graduated from Xiamen Jimei School of Light Industry in 1990 with a major in apparel design and received a Masters in Business Administration degree from Tsing-Hua University in 2007. Mr. Wu worked as a designer at Huacai Apparel Factory (“Huacai”) in Jinjiang County from August 1990 to August 1992. Between September 1992 and September 1994, Mr. Wu served as the Director of Design and Assistant to General Manager at Shidali Apparel Co., Ltd. (“Shidali”) in Jinjiang City. Neither Huacai nor Shidali is an affiliate of, or otherwise associated with, the Company. In November 1994, Mr. Wu founded Yinglin Jinduren. Since November 2009, Mr. Wu has also served as the Standing Director of the First Committee of the Association of Fabric & Apparel in Jinjiang City, a local trade association.
Yushan Zheng graduated from Jiangxi University of Finance & Economics in 1987 with a major in industrial economics. Mr. Zheng worked as the Director of Finance Department and served as the Chief Accounting Officer of Xianyou Electrical Machine Co., Ltd., an automobile electrical parts manufacturer and distributor in Fujian Province, from August 1987 to February 2000. Between March 2000 and February 2004, Mr. Zheng served as the Manager of Auditors at Putian-based Huada Certified Tax Agent Firm, which provides accounting, tax planning, and assets auditing and evaluation services to PRC enterprises. From March 2004 to February 2009, Mr. Zheng served as the Manager of Finance Department and acted as the Chief Financial Officer of Sanyuan Metal Co., Ltd., a steel distributor, and Sanchuan Aluminum Co., Ltd., an aluminum manufacturer and distributor, respectively, in Fujian Province. Beginning in February 2009, Mr. Zheng has been serving as the Chief Financial Officer of Yinglin Jinduren. None of these companies is related to or affiliated with us. Mr. Zheng is a Chinese Certified Public Accountant and a Certified Tax Agent.
Dr. Jianwei Shen holds a Doctorate of Economics and Management from China Agricultural University, a Doctorate of Philosophy from Hohenheim University in Germany, a Masters Degree in Economics and Management from Beijing Agricultural University, and a Bachelor’s Degree in Agricultural Economics from Beijing Agricultural University. Dr. Shen has experience working with China-based companies, including ones publicly traded outside of China. Since 2006, Dr. Shen is an independent director and a member of the Audit Committee of the China Essence Group Ltd., a food processing company listed on the Singapore Exchange (Main Board). From January 2002 to January 2005, he served as a project manager for marketing at Fujian Fuma Foods Group Co., a distributor of finished food products, and he worked as a project manager for marketing at Beijing Dasbro Co. Ltd., a maker of potato chips, from November 1993 to December 2000. None of these companies that Dr. Shen worked with is related to or affiliated with us. Dr. Shen is also a member of the Specialist Advisors to the City of Jinjiang, Fujian which advises the municipal government on policy issues, a position he has held since January 2006. Dr. Shen also provides strategic corporate advisory services to Yinglin Jinduren.
Zhifan Wu serves as the manager of Yinglin Jinduren’s Purchasing Department, a position he has held since March 2006. Mr. Wu is also the brother of Qingqing Wu, our chief executive officer, and has a 34.09% ownership interest in Yinglin Jinduren. Mr. Wu worked as the purchasing assistant at Huangbao Apparel Co., Ltd. (“Huangbao”) from March 1996 to February 2000, and as manager of Huangbao’s purchasing department from March 2000 to December 2005. Huangbao is a manufacturer and distributor of menswear and is not related to or affiliated with us.
Yuzhen Wu graduated from Huaqiao University in 1998 with a major in Business Management. Mr. Wu is a valued management member of Yinglin Jingduren where he has worked since May 1998. From June 1998 to August 2001, Mr. Wu worked as the workshop director supervising all aspects of our production workshop. From 2001 to 2003, Mr. Wu worked as the production manager overseeing all production arrangements and process. Mr. Wu served as the vice general manager between November 2003 and January 2006, supervising and managing our production, quality and inventory planning process, and as director of the general production management since February 2006, coordinating with O.E.M. manufacturers to ensure that their production volumes and quality meet with our requirements.
Congming Xie graduated with a bachelor’s degree in Economic Science from Huaqiao University in 2002. From July 2002 through December 2004, Mr. Xie acted as the general manager of Meilun Textile Trade Co., Ltd., a textile manufacturer and distributor in Xiamen City, Fujian Province which is not related to or affiliated with us. Mr. Xie is another valued management member of Yinglin Jinduren, working as the assistant general manager since January 2005, where he supervises market information gathering and analysis and fabric evaluation and sourcing.
Ying (Teresa) Zhang is currently the chief financial officer and a director of China Wind Systems, Inc., a U.S. public company (NASDAQ: CWS) that manufactures wind power equipments in China. She was an auditing manager at GC Alliance HK CPA in Beijing from July 2005 until January 2010, where she provided auditing services to China-based companies. From January 2003 through June 2005, Ms. Zhang served as a liaison officer for the Australian-Chinese Friendship Business Association, a trade organization, and from July 2000 to September 2002 she was an auditor at Ernst & Young in Beijing. None of these companies that Ms. Zhang worked with is related to or affiliated with us. Ms. Zhang is a certified practicing accountant in Australia. She received a bachelor’s degree in international accounting from Renmin University in China and a master’s degree in accounting from Macquarie University in Australia. Her accounting background and her experiences working with China-based companies both from the inside and as an outside auditor are valuable resources for us in structuring and managing our own internal control and financial reporting measures.
Involvement in Certain Legal Proceedings
None of our directors or executive officers has, during the past ten years:
| · | Had any petition under the federal bankruptcy laws or any state insolvency law filed by or against, or had a receiver, fiscal agent, or similar officer appointed by a court for the business or property of such person, or any partnership in which he was a general partner at or within two years before the time of such filing, or any corporation or business association of which he was an executive officer at or within two years before the time of such filing; |
| · | Been convicted in a criminal proceeding or a named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); |
| (i) | Acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, any other person regulated by the Commodity Futures Trading Commission, or an associated person of any of the foregoing, or as an investment adviser, underwriter, broker or dealer in securities, or as an affiliated person, director or employee of any investment company, bank, savings and loan association or insurance company, or engaging in or continuing any conduct or practice in connection with such activity; |
| (ii) | Engaging in any type of business practice; or |
| (iii) | Engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodities laws; |
| · | Been the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from, or otherwise limiting, the following activities: |
| · | Been the subject of any order, judgment, or decree, not subsequently reversed, suspended, or vacated, of any federal or state authority barring, suspending, or otherwise limiting for more than 60 days the right of such person to engage in any activity described in (i) above, or to be associated with persons engaged in any such activity; |
| · | Been found by a court of competent jurisdiction in a civil action or by the SEC to have violated any federal or state securities law, where the judgment in such civil action or finding by the SEC has not been subsequently reversed, suspended, or vacated; or |
| · | Been found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, where the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended, or vacated. |
Section 16(a) of the Exchange Act
Based solely on review of the copies of such forms furnished to us, or written representations that no reports were required, we believe that for the fiscal year ended December 31, 2009, our directors, executive officers and persons who owned more than 10% of a registered class of the Company's equity securities complied with Section 16(a) filing requirements applicable to them, except for the following: (1) Matthew Hayden did not file a Form 4 in connection with his resignation from his officer positions and directorship; (2) MMH Group, LLC did not file a Form 4 in connection with the additional shares of the Company’s common stock it acquired in February 2009; and (3) Ancora Greater China Fund, LP did not file a Form 4 in connection with the additional shares of the Company’s common stock it acquired in February 2009.
ITEM 15. EXHIBITS
(3) Exhibits
EXHIBIT INDEX
Exhibit Number | Description | |
| 31.1 | Section 302 Certification by the Corporation’s Chief Executive Officer * | |
| 31.2 | Section 302 Certification by the Corporation’s Chief Financial Officer * | |
| 32.1 | Section 906 Certification by the Corporation’s Chief Executive Officer * | |
| 32.2 | Section 906 Certification by the Corporation’s Chief Financial Officer * |
* Filed herewith.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Xiamen, Fujian Province, on October 27, 2010.
| VLOV, INC. | ||
| By: | /s/ Qingqing Wu | |
Qingqing Wu Chief Executive Officer (Principal Executive Officer) | ||
| By: | /s/ Bennet P. Tchaikovsky | |
Bennet P. Tchaikovsky Chief Financial Officer (Principal Financial and Accounting Officer) | ||
Pursuant to the requirements of the Securities Act of 1933, as amended, this report has been signed by the following persons in the capacities and on the dates indicated:
| Signature | Title | Date | ||
| /s/ Qingqing Wu | October 27, 2010 | |||
| Qingqing Wu | Chairman of the Board, President, and Chief Executive Officer | |||
| /s/ Bennet P. Tchaikovsky | October 27, 2010 | |||
| Bennet P. Tchaikovsky | Chief Financial Officer | |||
| /s/ Jianwei Shen | October 27, 2010 | |||
| Jianwei Shen | Director | |||
| /s/ Yuzhen Wu | October 27, 2010 | |||
| Yuzhen Wu | Director | |||
| /s/ | October 27, 2010 | |||
| Jianhui Wang | Director | |||
| /s/ Ying Zhang | October 27, 2010 | |||
| Ying Zhang | Director |