Filed Pursuant to Rule 424(b)(3)
SEC File No. 333-185212
Prospectus Supplement No. 3
(To Prospectus dated April 29, 2015)
Plastec Technologies, Ltd.
12,093,935 Ordinary Shares (for Resale)
This Prospectus Supplement No. 3 amends and supplements the Prospectus dated April 29, 2015 relating to 12,093,935 ordinary shares of Plastec Technologies, Ltd. that may be sold from time to time by the Selling Securityholders set forth in the Prospectus.
We will not receive any proceeds from the sale of the securities under this prospectus.
The securities are being registered to permit the Selling Securityholders to sell the securities from time to time in the public market at prices determined by the prevailing market prices or in privately negotiated transactions. Information regarding the Selling Securityholders, the amounts of ordinary shares that may be sold by them and the times and manner in which they may offer and sell the ordinary shares under this prospectus is provided under the sections titled “Selling Securityholders” and “Plan of Distribution,” respectively, in the Prospectus. We do not know when or in what amount the Selling Securityholders may offer the securities for sale. The Selling Securityholders may sell any, all, or none of the securities offered by this prospectus.
Our ordinary shares are quoted on the OTC Bulletin Board under the symbols “PLTYF”. As of November 13, 2015, the closing sale price of our ordinary shares was $8.00 per share.
This Prospectus Supplement No. 3 is being filed to include the information set forth in the Report of Foreign Private Issuer on Form 6-K filed on November 17, 2015, which is set forth below. This Prospectus Supplement No. 3 should be read in conjunction with the Prospectus dated April 29, 2015, which is to be delivered with this prospectus supplement. This Prospectus Supplement No. 3 is not complete without, and may not be delivered or utilized except in conjunction with, the Prospectus, including any amendments or supplements thereto.
Investing in our securities involves significant risks. See the section entitled “Risk Factors” beginning on page 4 of the Prospectus to read about factors you should consider before buying our securities.
Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.
The date of this Prospectus Supplement No. 3 is November 17, 2015.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of: November 2015
Commission File Number:000-53826
PLASTEC TECHNOLOGIES, LTD.
(Translation of registrant’s name into English)
Unit 01, 21/F, Aitken Vanson Centre, 61 Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.Form 20-Fx Form 40-F¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _____
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.Yes¨ Nox
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-___________.
Unaudited Financial Statements
This Report of Foreign Private Issuer on Form 6-K by Plastec Technologies, Ltd. (“we, “us”, “our” or the “Company”) contains the Company’s unaudited financial results for its fiscal year 2015 third quarter and nine months ended September 30, 2015.
Forward Looking Statement
This Report of Foreign Private Issuer on Form 6-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. These statements relate to future events or the Company’s future financial performance. The Company has attempted to identify forward-looking statements by terminology including “anticipates”, “believes”, “expects”, “can”, “continue”, “could”, “estimates”, “intends”, “may”, “plans”, “potential”, “predict”, “should” or “will” or the negative of these terms or other comparable terminology. These statements are only predictions, uncertainties and other factors may cause the Company’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. The information in this Report of Foreign Private Issuer on Form 6-K is not intended to project future performance of the Company. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot and does not guarantee future results, levels of activity, performance or achievements. The Company’s expectations are as of the date this Report of Foreign Private Issuer on Form 6-K is filed, and the Company does not intend to update any of the forward-looking statements after the date this Report of Foreign Private Issuer on Form 6-K is filed to conform these statements to actual results, unless required by law.
The forward-looking statements included in this Report of Foreign Private Issuer on Form 6-K are subject to risks, uncertainties and assumptions about our businesses and business environments. These statements reflect our current views with respect to future events and are not a guarantee of future performance. Actual results of our operations may differ materially from information contained in the forward-looking statements as a result of risk factors some of which include, among other things: continued compliance with government regulations; changing legislation or regulatory environments; requirements or changes affecting the business in which the Company is engaged; industry trends, including factors affecting supply and demand; labor and personnel relations; credit risks affecting the Company's revenue and profitability; changes in the plastic industry; the Company’s ability to effectively manage its growth, including implementing effective controls and procedures and attracting and retaining key management and personnel; changing interpretations of generally accepted accounting principles; general economic conditions; and other relevant risks detailed in the Company’s filings with the Securities and Exchange Commission.
PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED BALANCE SHEETS
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)
(Unaudited)
September 30, | (Audited)
December 31, | |||||||
| 2015 | 2014 | |||||||
| HK$ | HK$ | |||||||
| ASSETS | ||||||||
| Current assets | ||||||||
| Cash and cash equivalents | 486,285 | 528,527 | ||||||
| Trade receivables, net of allowances for doubtful accounts of HK$nil, and HK$nil as of December 31, 2014 and September 30, 2015, respectively | 316,674 | 278,553 | ||||||
| Inventories | 106,504 | 96,030 | ||||||
| Deposits, prepayment and other receivables | 51,840 | 50,204 | ||||||
| Total current assets | 961,303 | 953,314 | ||||||
| Property, plant and equipment, net | 315,847 | 283,500 | ||||||
| Prepaid lease payments, net | 18,547 | 19,692 | ||||||
| Deferred tax assets | 20,039 | 14,212 | ||||||
| Intangible assets | 438 | 438 | ||||||
| Total assets | 1,316,174 | 1,271,156 | ||||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities | ||||||||
| Bank borrowings | 51,116 | 21,429 | ||||||
| Trade payables | 135,624 | 125,854 | ||||||
| Other payables and accruals | 133,419 | 103,576 | ||||||
| Tax payable | 65,645 | 58,736 | ||||||
| Total current liabilities | 385,804 | 309,595 | ||||||
| Bank Borrowings | 7,143 | 28,571 | ||||||
| Total liabilities | 392,947 | 338,166 | ||||||
| Commitments and contingencies | - | - | ||||||
| Shareholders’ equity | ||||||||
| Ordinary shares (US$0.001 par value; 100,000,000 authorized 12,938,128 and 12,938,128 shares issued and outstanding as of December 31, 2014 and September 30, 2015, respectively) | 101 | 101 | ||||||
| Additional paid-in capital | 26,049 | 26,049 | ||||||
| Accumulated other comprehensive income | 8,534 | 10,137 | ||||||
| Retained earnings | 888,543 | 896,703 | ||||||
| Total shareholders’ equity | 923,227 | 932,990 | ||||||
| Total liabilities and shareholders’ equity | 1,316,174 | 1,271,156 | ||||||
PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Unaudited)
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)
For the 3-month period ended September 30, | For the 9-month period ended September 30, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| HK$ | HK$ | HK$ | HK$ | |||||||||||||
| Revenues | 360,712 | 343,270 | 976,415 | 880,463 | ||||||||||||
| Cost of revenues | (257,249 | ) | (254,790 | ) | (729,164 | ) | (676,045 | ) | ||||||||
| Gross profit | 103,463 | 88,480 | 247,251 | 204,418 | ||||||||||||
| Operating expenses, net | ||||||||||||||||
| Selling, general and administrative expenses | (49,851 | ) | (47,018 | ) | (122,646 | ) | (104,517 | ) | ||||||||
| Other income | 618 | 463 | 1,305 | 1,627 | ||||||||||||
| Gain/(loss) on disposal of a subsidiary | - | (432 | ) | - | 29,125 | |||||||||||
| Written-off of property, plant and equipment | (858 | ) | (8 | ) | (2,119 | ) | (448 | ) | ||||||||
| Gain on disposal of property, plant and equipment | 1,712 | 391 | 4,142 | 942 | ||||||||||||
| Total operating expenses, net | (48,379 | ) | (46,604 | ) | (119,318 | ) | (73,271 | ) | ||||||||
| Income from operations | 55,084 | 41,876 | 127,933 | 131,147 | ||||||||||||
| Interest income | 204 | 501 | 1,139 | 1,056 | ||||||||||||
| Interest expense | (338 | ) | (413 | ) | (1,138 | ) | (1,281 | ) | ||||||||
| Income before income tax expense | 54,950 | 41,964 | 127,934 | 130,922 | ||||||||||||
| Income tax expense | (4,494 | ) | (8,635 | ) | (14,994 | ) | (18,348 | ) | ||||||||
| Net income | 50,456 | 33,329 | 112,940 | 112,574 | ||||||||||||
| Other comprehensive expense | ||||||||||||||||
| Foreign currency translation adjustment | (6,184 | ) | (6,179 | ) | (1,603 | ) | (8,330 | ) | ||||||||
| Comprehensive income attributable to Plastec Technologies, Ltd. | 44,272 | 27,150 | 111,337 | 104,244 | ||||||||||||
| Net income per share: | ||||||||||||||||
| Weighted average number of ordinary shares | 12,938,128 | 12,938,128 | 12,938,128 | 12,938,128 | ||||||||||||
| Weighted average number of diluted ordinary shares | 12,938,128 | 12,938,128 | 12,938,128 | 12,938,128 | ||||||||||||
| Basic income per share attributable to Plastec Technologies, Ltd. | HK$3.9 | HK$2.6 | HK$8.7 | HK$8.7 | ||||||||||||
| Diluted income per share attributable to Plastec Technologies, Ltd. | HK$3.9 | HK$2.6 | HK$8.7 | HK$8.7 | ||||||||||||
PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (Unaudited)
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)
| Ordinary shares | Accumulated | |||||||||||||||||||||||
Number of shares outstanding |
Amount | Additional paid-in capital | other comprehensive income |
Retained earnings |
Shareholders’ equity | |||||||||||||||||||
| HK$ | HK$ | HK$ | HK$ | HK$ | ||||||||||||||||||||
| Balance at December 31, 2013 and at January 1, 2014 | 12,938,128 | 101 | 26,455 | 17,901 | 759,157 | 803,614 | ||||||||||||||||||
| Net income for the year | - | - | - | - | 167,821 | 167,821 | ||||||||||||||||||
| Dividends paid | - | - | - | - | (30,275 | ) | (30,275 | ) | ||||||||||||||||
| Warrants repurchases | - | - | (406 | ) | - | - | (406 | ) | ||||||||||||||||
| Cumulative translation adjustment | - | - | - | (7,764 | ) | - | (7,764 | ) | ||||||||||||||||
| Balance at December 31, 2014 and at January 1, 2015 | 12,938,128 | 101 | 26,049 | 10,137 | 896,703 | 932,990 | ||||||||||||||||||
| Net income for the period | - | - | - | - | 112,940 | 112,940 | ||||||||||||||||||
| Dividends paid | - | - | - | - | (121,100 | ) | (121,100 | ) | ||||||||||||||||
| Cumulative translation adjustment | - | - | - | (1,603 | ) | - | (1,603 | ) | ||||||||||||||||
| Balance at September 30, 2015 | 12,938,128 | 101 | 26,049 | 8,534 | 888,543 | 923,227 | ||||||||||||||||||
PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Hong Kong dollars in thousands, except number of shares, per share data and unless otherwise stated)
For the 9-month period ended September 30, | ||||||||
| 2015 | 2014 | |||||||
| HK$ | HK$ | |||||||
| Operating activities | ||||||||
| Net income | 112,940 | 112,574 | ||||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 72,265 | 82,859 | ||||||
| Gain on disposal of a subsidiary | - | (29,125 | ) | |||||
| Loss on written-off of property, plant and equipment | 2,119 | 448 | ||||||
| Gain on disposal of property, plant and equipment | (4,142 | ) | (942 | ) | ||||
| Deferred tax credit | (6,021 | ) | (1,829 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Trade receivables | (38,121 | ) | (21,159 | ) | ||||
| Inventories | (10,474 | ) | 8,123 | |||||
| Deposits, prepayment and other receivables | (1,636 | ) | (8,493 | ) | ||||
| Trade payables | 9,770 | 25,470 | ||||||
| Other payables and accruals | 27,729 | (2,449 | ) | |||||
| Tax payables | 5,806 | 17,328 | ||||||
| Net cash provided by operating activities | 170,235 | 182,805 | ||||||
| Investing activities | ||||||||
| Purchase of property, plant and equipment | (106,321 | ) | (24,740 | ) | ||||
| Proceeds from disposal of a subsidiary | - | 43,015 | ||||||
| Proceeds from disposal of property, plant and equipment | 8,289 | 1,204 | ||||||
| Deposits for purchase of property, plant and equipment | - | (10,681 | ) | |||||
| Net cash (used in)/generated from investing activities | (98,032 | ) | 8,798 | |||||
| Financing activities | ||||||||
| Repurchases of shares and/or warrants | - | (406 | ) | |||||
| Net proceeds/(repayment) from/ of bank borrowings | 8,258 | (16,360 | ) | |||||
| Dividends paid | (121,100 | ) | (30,275 | ) | ||||
| Net cash used in financing activities | (112,842 | ) | (47,041 | ) | ||||
| Net (decrease)/increase in cash and cash equivalents | (40,639 | ) | 144,562 | |||||
| Effect of exchange rate changes on cash and cash equivalents | (1,603 | ) | (7,580 | ) | ||||
| Cash and cash equivalents, beginning of period | 528,527 | 348,901 | ||||||
| Cash and cash equivalents, end of period | 486,285 | 485,883 | ||||||
| Supplementary disclosures of cash flow information: | ||||||||
| Interest (received)/paid, net | (1 | ) | 225 | |||||
| Income taxes paid | 15,210 | 2,849 | ||||||
Plastec Technologies, Ltd.
Management discussion and analysis
General
The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“USGAAP”). The preparation of financial statements in conformity with USGAAP requires management to make estimates and assumptions that reported amounts of assets and liabilities at the date of the financial statements and the amount of expenses reported during the period. Actual results could differ from those estimates. Unless otherwise indicated, all financial information presented in HK$ may be converted to US$ using the exchange rate of 7.8 HK$ for every 1 US$ whereas RMB may be converted to US$ using the exchange rate of 6.4 RMB for every 1 US$.
Results of Operations
Operating results for the third quarter ended September 30, 2015 compared to the third quarter ended September 30, 2014
We recorded an approximately 5.1% increase in revenue for the third quarter ended September 30, 2015 to HK$360.7 million compared to the corresponding period in the prior year. The increase in revenue was primarily a result of our continued focus on soliciting new orders from existing and new customers, at the same time, further eliminating sales orders with low margins.
Our gross profit likewise increased by approximately 16.9%, or HK$15.0 million, to HK$103.5 million compared to the corresponding period in the prior year. The increase in gross profit was attributable to better margins on our products compared to the corresponding period in the prior year, and also our on-going efforts in streamlining our manufacturing operation and process to reduce costs. Gross profit margin further improved to 28.7% from 25.8% compared to the corresponding period in the prior year. Income before income tax expenses increased by approximately 30.9%, or HK$13.0 million, to HK$55.0 million compared to the corresponding period in the prior year.
Income tax expense was HK$4.5 million compared to HK$8.6 million in the corresponding period in the prior year, representing an effective income tax rate was 8.2% compared to 20.6% in the corresponding prior year period.
Net income after tax increased by approximately by 51.4%, or HK$17.1 million, to HK$50.5 million in the third quarter ended September 30, 2015, compared to the corresponding period in the prior year.
Operating results for the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014
We recorded an approximately 10.9% increase in revenue for the nine months ended September 30, 2015 to HK$976.4 million compared to the corresponding period in the prior year, as a result of our continued focus on soliciting new orders from existing customers as well as new customers throughout this period.
Our gross profit increased by approximately 21.0%, or HK$42.8 million, to HK$247.3 million compared to the corresponding period in the prior year. The increase in gross profit was attributable to better margins on our products and our on-going efforts in cost control throughout the period. Gross profit margin improved to 25.3% from 23.2% compared to the corresponding period in the prior year.
We recorded an approximately 2.3% decrease in income before income tax expenses for the third quarter ended September 30, 2015 to HK$127.9 million compared to the corresponding period in the prior year. The decrease was mainly attributable to the relative effect arising from a one-off gain on disposal of a subsidiary for HK$29.1 million recorded in the corresponding period in the prior year. Excluding the effect of this prior corresponding period one-off transaction, our operating income before income tax increased by approximately 25.7%.
Income tax expense was HK$15.0 million compared to HK$18.3 million in the corresponding period in the prior year. Excluding the effect of the aforesaid prior corresponding period one-off gain on disposal of a subsidiary, our effective income tax rate was 11.7% compared to 18.0% in the corresponding prior year period and our net income after tax increased by approximately 35.3% to HK$112.9 million, compared to the corresponding period in the prior year.
Balance sheet positions as at September 30, 2015 compared to December 31, 2014
Total assets increased by HK$45.0 million or approximately 3.5% to HK$1,316.2 million as of September 30, 2015 compared to HK$1,271.2 million as of December 31, 2014. This increase was mainly attributed to a HK$38.1 million increase in trade receivables, a HK$10.5 million increase in inventories and a HK$32.3 million increase in net assets values of property, plant and equipment, against a HK$42.2 million decrease in cash and cash equivalents.
Total liabilities increased by approximately HK$54.8 million, or 16.2%, to HK$392.9 million as of September 30, 2015 compared to HK$338.2 million as of December 31, 2014. This increase was mainly attributable to a HK$29.8 million increased in other payables and accruals, a HK$9.8 million increase in trade payables and a HK$8.3 million increase in bank borrowings.
Cashflow analysis
We have relied primarily upon internally generated funds and bank borrowings to finance our operations and expansion.
For the nine months ended September 30, 2015, we recorded HK$40.6 million cash outflow as compared to HK$144.6 million cash inflow in the same corresponding period in the prior year, which included HK$43.0 million proceeds from the disposal of a subsidiary in that prior period.
We generated HK$170.2 million cash inflow from operating activities as compared to HK$182.8 million cash inflow in the corresponding period in the prior year. Net cash used in investing activities was HK$98.0 million compared to net cash inflow of HK$8.8 million in the corresponding period in the prior year which included HK$43.0 million proceeds from the aforesaid disposal of a subsidiary.
Net cash used in financing activities for the period was HK$112.8 million which included dividends payment in aggregate of HK$121.1 million, compared to HK$47.0 million net cash used in financing activities in the corresponding period in the prior year which included dividends payment of HK$30.3 million.
Subsequent Events
As previously reported, on November 14, 2015, we entered into a Share Transfer Agreement (the “Agreement”) with Shanghai Yongli Belting Co., Ltd. (“SYB”) and its wholly-owned subsidiary, Shanghai Yongjing Investment Management Co., Ltd. (“SYIM”). Pursuant to the Agreement, SYIM will purchase, through a to-be-formed wholly-owned Hong Kong subsidiary (the “HK Subsidiary”), the entirety of our shareholding interests in our wholly-owned subsidiary, Plastec International Holdings Limited (“Plastec”) for an aggregate purchase price of RMB 1,250,000,000 (or US$195,312,500), in cash (the “Transfer Price”).
To finance the Transfer Price, SYB, the shares of which are listed and traded on the ChiNext Board of Shenzhen Stock Exchange, intends to raise funds of no less than RMB 1,250,000,000 through a private placement (the “Private Placement”), which it will subsequently contribute to the capital of the HK Subsidiary to be utilized by the HK Subsidiary for the purchase of our interests in Plastec. Should the funds to be raised through Private Placement fall short of RMB 1,250,000,000 for whatever reason, SYB has agreed to pay, through the HK Subsidiary, to the Company any shortfall with funds raised by SYB through other means.
Of the Transfer Price, RMB 875,000,000 (or US$136,718,750) is payable within 60 days after the China Securities Regulatory Commission (“CSRC”) approves the Private Placement. The remaining RMB 375,000,000 (or US$58,593,750) of the Transfer Price shall be deposited into a bank account designated solely for the purpose of the transaction, supervised and administered by SYB and the Company jointly, and shall be payable to the Company upon Plastec achieving certain performance targets for the years ended December 31, 2016, 2017 and 2018.
The transaction is expected to be consummated (the “Closing”) after the required approval by the Company’s shareholders and the fulfillment of certain other conditions, as described herein and in the Agreement. However, there can be no assurance that Closing will actually occur.
Upon Closing, we will no longer own Plastec. Thereafter, our only operations will generally be to complete certain projects currently under way, collect rental income from certain property we own and is being leased to one of Plastec’s subsidiaries and explore other investment opportunities.
The proceeds from the transaction will be received by us, not our shareholders. We will use a portion of the proceeds to pay for transaction costs associated with the transaction and for general working capital purposes. The remaining proceeds from the transaction may be used, at the sole discretion of our Board, to provide liquidity to our shareholders through one or more interim dividends. It is anticipated that the first tranche of net proceeds from the transaction to us will be an aggregate of approximately RMB 770,000,000 (or US$120,312,500), or RMB 59.5 (or approximately US$ 9.30) per outstanding ordinary share.
Complete information on the terms of the proposed transaction can be found in our Report of Foreign Private Issuer on Form 6-K filed with the Securities and Exchange Commission on November 16, 2015.
Off-Balance Sheet Arrangements
The Company has not entered into any financial guarantees or other commitments to guarantee the payment obligations of third parties. The Company has not entered into any derivative contracts that are indexed to its shares and classified as shareholder’s equity or that are not reflected in its combined financial statements. Furthermore, the Company does not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. The Company does not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to it or that engages in leasing, hedging or research and development services with the Company. There are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the Company’s financial condition, net sales or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to an investor.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| PLASTEC TECHNOLOGIES, LTD. | ||
| By: | /s/ Kin Sun Sze-To | |
| Name: | Kin Sun Sze-To | |
| Title: | Chief Executive Officer | |
Dated: November 17, 2015
