Yulong Eco-Materials Limited
Eastern End of Xiwuzhuang Village
Jiaodian Town, Xinhua Area
Pingdingshan, Henan Province
People’s Republic of China
Phone: +86-375-8888988
April 21, 2015
VIA EDGAR CORRESPONDENCE
United States Securities and Exchange Commission
100 “F” Street, N.E.
Washington, D.C. 20549
| Attn:Ms. | Pamela Long |
| Mr. Craig Slivka | |
| Mr. Leland Benton | |
| Ms. Patricia Do | |
| Ms. Jeanne Baker |
| Re: | Yulong Eco-Materials Limited | |
| Amendment No. 1 to Registration Statement on Form S-1 | ||
| Filed April 2, 2015 File No. 333-201170 |
Ladies and Gentlemen:
Set forth below are the responses of Yulong Eco-Materials Limited (the “Company”) to the comments received from the staff (“Staff”) of the Securities and Exchange Commission in the letter dated April 10, 2015, regarding the above-referenced matter. We have reproduced the Staff’s comments in bold type for your convenience and have followed the comment with the Company’s response. References in this letter to “we”, “our”, or “us” mean the Company or its advisors, as the context may require.
We also enclose a marked draft of the proposed Amendment No. 5 (“Amendment No. 5”) to the Company’s Registration Statement on Form S-1 filed on April 2, 2015 (the “Registration Statement”), containing revisions that have been made in response to the Staff’s comments.
General
| 1. | Please supplementally provide us with copies of the memorandums that you refer to in your supplemental response to comment two of our letter dated March 23, 2015. |
Response: A copy of the memorandum issued by the Pingdingshan Construction Wastes Management Office, and an English translation thereof, are hereby submitted with this response letter.
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| 2. | Please revise to clarify the scope of your exclusive right to transport and process construction waste. It is unclear what “five districts” means in terms of the size of the market that you enjoy an exclusive right to service. Please also revise your disclosure on page 53 in which you name the “districts” that “the municipal government has designated as” the built-up area of Pingdingshan. We note that neither Xinhua Zhanhe or Xingcheng are districts in Pingdingshan, and that Pingdingshan has only the four districts. Please refer to the fourth bullet point of comment two of our letter dated March 23, 2015. |
Response:We have revised our disclosure throughout the Registration Statement to clarify that our exclusive right encompasses the four districts (Shilong, Weidong, Xinhua and Zhanhe) and two special districts (Gaoxing and Xincheng) currently under the administration of the Pingdingshan municipal government, as follows:
The third paragraph under “Our Company” on page 1:
In connection with our plans to establish waste hauling operations and to produce bricks from construction waste, we have: (i) been granted exclusive right by the Pingdingshan municipal government to transport and process construction waste in the built-up area of Pingdingshan consisting of the four districts (Shilong, Weidong, Xinhua and Zhanhe) and two special districts (Gaoxing and Xincheng) under the administration of the municipal government (subject to exclusions imposed by special municipal regulations), which exclusive right will commence concurrently with the formal operations of our waste recycling plant; (ii) contracted to acquire an additional 70 haul trucks to augment our current fleet of 50 trucks for a total of 120 haul trucks to transport the waste; and (iii) built a state-of-the-art recycling plant to process the waste, and a brick plant to utilize the processed waste. One of the two production lines is complete and currently undergoing trial operations. We anticipate formal production and our hauling operations to commence in April 2015.
First bullet point under “Our Competitive Strengths” on page 1:
Environmentally friendly products.In addition to our fly-ash bricks which are each comprised of at least 30% in reclaimed fly-ash, we will be able to produce bricks from construction waste consisting of discarded bricks and concrete that we have the exclusive right to collect in the built-up area of Pingdingshan (subject to exclusions imposed by special municipal regulations), once our new recycling plant and brick plant become operational. We have also built a research and development facility that will focus on renewable construction materials. Given China’s growing public awareness of pollution and resource conservation, we believe such efforts will be crucial for us to remain the market leader in Pingdingshan.
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The following risk factor on page 11:
If our exclusive right to collect and process construction waste is terminated or expires, we may have difficulty sourcing the discarded bricks and concrete in quantities that we may need for our new facilities or on terms acceptable to us.
Through Yulong Renewable, we plan to process construction waste consisting of discarded bricks and concrete at our new recycling plant, which is not yet operational. We then plan to transform them into various types of recycled bricks at our new brick plant, which is undergoing trial operations. We have a 20-year exclusive right to collect and process construction waste in the built-up area of Pingdingshan consisting of the four districts and two special districts under the administration of the municipal government (subject to exclusions imposed by special municipal regulations) pursuant to our agreement with the Pingdingshan Housing and Urban-Rural Development Bureau and licenses issued by the Pingdingshan Construction Wastes Management Office, which exclusive right will commence concurrently with the formal operations of our recycling plant. Such right, however, may be terminated if, for example, we were to breach our obligations and fail to correct such breach within a specified time period, or if we were to fail to expand our operations as needed to meet the city’s requirements. Should our right terminate, or expire without being renewed, we may not be able to source discarded bricks and concrete in quantities that we may require for Yulong Renewable’s anticipated operations and/or on terms that are acceptable to us. Should that happen, we would be unable to carry out our business plans, which in turn would have a material negative impact our projected revenues and growth.
The first paragraph under “Overview” on page 31 as follows:
We are engaged in the production and sale of fly-ash bricks and ready-mixed concrete in and around the city of Pingdingshan, Henan Province, China. We are also in the process of establishing and constructing a waste recycling plant and another brick production plant. We plan to process construction waste consisting of discarded bricks and concrete that we have the exclusive right to collect and process in the built-up area of Pingdingshan consisting of the four districts (Shilong, Weidong, Xinhua and Zhanhe) and two special districts (Gaoxing and Xincheng) currently under the administration of the municipal government (subject to exclusions imposed by special municipal regulations) at the recycling plant and to transform them into various types of recycled bricks at the brick plant. Our exclusive right will commence concurrently with the formal operations of our recycling plant. We completed construction of both plants as well as a research and development center in October 2014, and completed equipment installation (including the first production line at the brick plant) in November 2014. We commenced trial operations in late December 2014, and plan to commence formal operations sometime in April 2015. We also plan to complete the second production line of the brick plant by December 2015. We are a holding company and our primary business operations are conducted through our consolidated affiliated entities, which are variable interest entities, or VIEs, that we control. These VIEs include Yulong Bricks, which operates our bricks business, and Yulong Concrete and Yulong Transport, which operate our concrete business. Yulong Renewable will operate our new facilities when they become operational.
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The second to last paragraph under “Overview” on page 42 as follows:
In connection with our plans to establish waste hauling operations and to produce bricks from construction waste, we have: (i) been granted exclusive right by the Pingdingshan municipal government to transport and process construction waste in the built-up area of Pingdingshan consisting of the four districts and two special districts currently under the administration of the municipal government (subject to exclusions imposed by special municipal regulations), which exclusive right will commence concurrently with the formal operations of our waste recycling plant; (ii) contracted to acquire an additional 70 haul trucks to augment our current fleet of 50 trucks for a total of 120 haul trucks to transport the waste; and (iii) built a state-of-the-art recycling plant to process the waste, and a brick plant to utilize the processed waste. One of the two production lines is complete and currently undergoing trial operations. We anticipate formal production and our hauling operations to commence in April 2015.
The second to last paragraph under “Our Business Strategy” on page 49 as follows:
Also, our production volumes have in the past lagged behind demand, and we believe that our current product offerings are insufficient to meet the market requirements that we project. Based on internal studies of our customers’ purchases and the Pingdingshan market in general, we estimate that the city currently requires approximately 0.9 million m3 of bricks and 2.4 million m3 of concrete annually. We currently have four brick production lines each capable of producing 100,000 m3 annually, and two concrete mixing towers each capable of producing 200,000 m3 annually. In recent years, however, what we produced and had others produce for us were on occasions not enough to meet demand. Such was the case for concrete in fiscal 2013 and 2014, and the six months ended December 31, 2014. Additionally, as the populace has become more vocal of pollution concerns in recent years, the Chinese central government is responding with policies that favors sustainability. For example, a 2013 national energy conservation policy imposes production limits on some of our raw material suppliers to control pollution generated by their plants. Yulong Renewable was established to operate a new recycling plant to process construction waste consisting of discarded bricks and concrete that we will collect mainly from construction sites in the built up area of Pingdingshan consisting of the four districts and two special districts currently under the administration of the municipal government (subject to exclusions imposed by special municipal regulations), and to which we have the exclusive right under an agreement with the Pingdingshan Housing and Urban-Rural Development Bureau and licenses issued by the Pingdingshan Construction Wastes Management Office. Once the construction waste is processed, we will use them to produce bricks at the adjacent brick plant that Yulong Renewable will also operate. In 2012, we secured a piece of land approximately 15 kilometers from our headquarters, and commenced construction of the recycling and brick plants in July 2013. Construction of both plants was completed in October 2014, and equipment installation (including the first production line with 75,000 m3in annual capacity at the brick plant) in November 2014, and we currently expect to complete the second production line by December 2015. Both plants have thus far been funded with cash flow from operations and loans from some of the shareholders of our consolidated affiliated entities, and we intend to use the net proceeds from this offering to fund the completion of these plants. If we are unable to complete this offering, however, we will use our future working capital, and look to banks and, as necessary, our founder, for financing.
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The first bullet point under “Competitive Strengths” on page 54 as follows:
Environmentally friendly products.We are already using reclaimed fly-ash (from coal fired power plants) in our brick production, comprising approximately 30% of each brick. In doing so, we not only help reduce environmental wastes but we believe also increase our product quality. Once our new recycling plant and brick plant are completed and operational, we will be able to add bricks made with recycled construction waste (consisting of discarded bricks and concrete that we have the exclusive right to collect and process from the built up areas of Pingdingshan consisting of the four districts and two special districts currently under the administration of the municipal government (subject to exclusions imposed by special municipal regulations)) to our lineup. We are also positioning ourselves to capitalize on future opportunities by building a facility that, when completed, will focus on researching and developing renewable construction materials. We believe that such efforts not only sync with China’s growing public consciousness regarding pollution and resource conservation, but will be instrumental in maintaining our position as market leader in Pingdingshan.
In addition, we have revised our disclosure in the last paragraph on page 53 as follows to clarify the size of the market that our exclusive right encompasses:
We plan to supply the discarded bricks and concrete needed for our new recycling plant and brick plant pursuant to our exclusive right from the municipal government concerning construction waste in the built-up area of Pingdingshan (subject to exclusions imposed by special municipal regulations). Specifically, in September 2012, Yulong Renewable entered into an agreement with the Pingdingshan Housing and Urban-Rural Development Bureau, or the Pingdingshan Development Bureau, pursuant to which we have the exclusive right to clean up and process construction waste in the built-up area of Pingdingshan (subject to exclusions imposed by special municipal regulations). The municipal government currently administers four districts, two county-level cities and four counties, as well as two special districts. The built-up area in which we have exclusive right encompasses the four districts, namely Shilong, Weidong, Xinhua and Zhanhe, and the two special districts, namely Gaoxing Technology Industry Development District, which is created from a portion of Weidong district, and Xincheng District, which is created from portions of Xinhua and Zhanhe districts as well as Baofeng County. Our exclusivity is for 20 years, commencing concurrently with the formal operations of our recycling plant, but may be extended subject to agreement with the Pingdingshan Development Bureau prior to the expiration or termination of our exclusive agreement. Additionally, in October 2012, the Pingdingshan Construction Wastes Management Office, which is a department of the Pingdingshan Development Bureau and is in charge of the city’s construction waste, granted Yulong Renewable an exclusive license to clean up, transport and process constructions waste within the city’s planning area (in this case, in the built-up area under our agreement with the Pingdingshan Development Bureau), as well as a qualification license as required under our agreement with the Pingdingshan Development Bureau. Both licenses expire on October 30, 2032.
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With respect to Gaoxing being under the administration of the municipal government, we respectfully direct the Staff’s attention to the Opinion of the People’s Government of Pingdingshan regarding the Implementation of Municipal Management Authority within Gaoxing Technology Industry Development District, Pingzheng (2014) No. 9, in which the municipal government agrees to confer certain of its authority to Gaoxing’s governing body to improve the development and service efficiency in the district, but subject to the supervision and inspection of the municipal government. The opinion is addressed to “the people’s government of each county (city, district), the management committees of Xincheng District and Gaoxing District, and each department of the municipal government.” A copy of such opinion from the website of the municipal government is submitted with this response letter for the Staff’s consideration.
We also direct the Staff’s attention to the Notice of the People’s Government of Henan Province regarding the Printing and Distribution of the Overall Construction Plan of Pingdingshan Xincheng District, Yuzheng (2011) No. 85, which states that the governing body for Xincheng District shall be agencies of the Pingdingshan municipal government. A copy of such notice from the website of the provincial government is submitted with this response letter for the Staff’s consideration.
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Calculation of Registration Fee Table
| 3. | Please advise as to why the registration fee for your warrants has changed, and why you are referring to a percentage of $16,312,500. We note that amount of warrants being registered, as well as the value of those warrants, have not changed. We further note that the maximum aggregate offering price of 147,500 shares at $7.25 per share is $1,141,875, rather than $815, 625. |
Response: The registration fee for ordinary shares underlying the warrants changed to reflect the reduced amount of such shares being registered (from 7% of the ordinary shares being registered for this offering, excluding overallotment shares, to 5%), which reduced amount was inadvertently not reflected in the registration fee table. $16,312,500 is the proposed maximum aggregate offering price for such shares, excluding overallotment shares. We have amended the registration fee table as follows:
CALCULATION OF REGISTRATION FEE
| Title of Class of Securities to be Registered | Amount to be Registered | Proposed Maximum Aggregate Price Per Share | Proposed Maximum Aggregate Offering Price(1) | Amount of Registration Fee | ||||||||||||
| Ordinary shares, $0.001 par value per share | 2,587,500 | (2) | $ | 7.25 | $ | 18,759,375 | $ | 2,179.84 | ||||||||
| Warrants to purchase ordinary shares | - | - | - | - | (3) | |||||||||||
| Ordinary shares underlying warrants(4)(5) | 112,500 | (6) | 7.25 | 815,625 | 94.78 | |||||||||||
| Total | 2,700,000 | $ | 7.25 | $ | 19,575,000 | $ | 2,274.62 | (7) | ||||||||
| (1) | Estimated solely for the purpose of calculating the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended. |
| (2) | Includes 337,500 ordinary shares, which the underwriters have the option to purchase to cover over-allotments, if any. |
| (3) | No registration fee pursuant to Rule 457(g) under the Securities Act. |
| (4) | The warrants are exercisable at a per share exercise price equal to 100% of the public offering price. As estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(g) under the Securities Act. |
| (5) | The ordinary shares underlying the warrants are being registered solely in connection with the Securities and Exchange Commission’s Compliance and Disclosure Interpretations for Securities Act Sections, Question 139.05. |
| (6) | Includes shares equal to 2.875% of the ordinary shares being offered in this offering (excluding over-allotment), underlying the warrants being granted to the underwriters, and shares equal to 2.125% of the ordinary shares being offered in this offering (excluding over-allotment), underlying the warrants granted to Cuttone & Co, Inc., who is acting as our independent financial adviser. |
| (7) | Previously paid. |
| 4. | You appear to be registering shares underlying the warrants that you are granting to Cuttone, which is no longer acting as an underwriter. Please revise this table to remove the reference to “Underwriter’s warrants.” |
Response: As we are also granting warrants to our underwriters, we have revised the reference to “Warrants.”
Facilities, page 60
| 5. | Please reconcile your statement in your supplemental response to the first bullet point of comment two of our letter dated March 23, 2015 that your inability to have your recycling plant constructed by December 13, 2012 is due “entirely to delays resulting from coordination within agencies and departments of the Pingdingshan municipal government” with the fact that your recycling plant has not been completed and requires the use of proceeds from this offering to become operational, as stated in your Use of Proceeds. Please also note that contrary to your representations in your supplemental response and your prospectus, you were not obliged to commence operations by December 13, 2012, but per clause 8.1 of your contract with the Pingdingshan Municipal Bureau of Housing and Urban-Rural Development, were required to complete the building of a waste treatment site. Please make corresponding revisions to footnote (6) under this heading. |
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Response: We respectfully note that our disclosure does not state that the recycling plant requires the proceeds from this offering to become operational. As disclosed throughout the Registration Statement, construction and equipment installations were completed in November 2014, trial operation commenced in late December 2014, and formal operation is anticipated sometimes in April 2015. We do require the proceeds from this offering to complete the recycling plant by purchasing an additional 70 haul trucks to supplement our existing fleet of 50 trucks, as disclosed in the Registration Statement. However, we would still be able to operate the recycling plant without the 70 additional trucks.
With respect to footnote (6), we have revised as follows:
| (6) | We completed equipment installation of the brick and recycling plants (including one production line for the brick plant) in November 2014 and commenced trial operations in late December 2014, with formal operations anticipated sometime in April 2015. Our agreement with the Pingdingshan Development Bureau contemplates that we complete construction of our recycling plant and commence formal operations thereof within six months of entering into the agreement, or by March 2013. We are not bound by such requirement, however, due to the time required for coordination among agencies of the Pingdingshan municipal government in connection with our waste recycling business. The research and development center and office building are not yet operational. |
Warrants, page 86
| 6. | Please advise why the warrants granted to your financial advisor have been deemed compensation by FINRA. Please also clarify how many warrants you are granting to each of Cuttone and Northland. |
Response: We have revised our disclosure to make clear that the warrants discussed in the paragraph with the heading “Warrants” in Amendment No. 4 of the Registration Statement pertain only to those we are granting to our underwriters, which warrants would be deemed compensation by FINRA, by removing all reference to Cuttone from the paragraph and amending the paragraph heading to “Underwriters’ Warrants,” as follows:
“Underwriters’ Warrants. We have agreed to issue to our underwriters warrants to purchase the number of our ordinary shares in the aggregate equal to 2.875% of the ordinary shares being offered in this offering (excluding the over-allotment) and to also register herein such underlying shares. The warrants will be exercisable at any time, and from time to time, in whole or in part, during the period commencing 180 days from the effective date of the offering, which period shall not extend further than five years from the effective date of the offering in compliance with FINRA Rule 5110(f)(2)(G)(i). The warrants are exercisable at a per share price equal to 100% of the public offering price per share in the offering. The warrants are also exercisable on a cashless basis. The warrants have been deemed compensation by FINRA and are therefore subject to a 180-day lock-up pursuant to Rule 5110(g)(1) of FINRA. Neither our underwriters nor permitted assignees under Rule 5110(g)(1) will sell, transfer, assign, pledge, or hypothecate these warrants or the securities underlying these warrants, nor will they engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the warrants or the underlying securities for a period of 180 days from the effective date of the offering. In addition, the warrants provide for registration rights upon request, in certain cases. The demand registration right provided will not be greater than five years from the effective date of the offering in compliance with FINRA Rule 5110(f)(2)(G)(iv). The piggyback registration right provided will not be greater than seven years from the effective date of the offering in compliance with FINRA Rule 5110(f)(2)(G)(v). We will bear all fees and expenses attendant to registering the securities issuable on exercise of the warrants other than underwriting commissions incurred and payable by the holders. The exercise price and number of shares issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary cash dividend or our recapitalization, reorganization, merger or consolidation. However, the warrant exercise price or underlying shares will not be adjusted for issuances of ordinary shares at a price below the warrant exercise price.
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We are granting warrants to purchase 2.875% of the ordinary shares being offered in this offering (excluding over-allotment) to our underwriters in the aggregate, and warrants to purchase 2.125% of the ordinary shares being offered in this offering (excluding over-allotment) to Cuttone. We have added a new section entitled “Warrants” under “Description of Share Capital,” which section discloses such information as follows:
Warrants
Except for (i) the warrants to be issued to our underwriters to purchase the number of our ordinary shares in the aggregate equal to 2.875% of the ordinary shares being offered in this offering (excluding over-allotment) (the “Underwriters’ Warrants”), and (ii) the warrant to be issued to Cuttone & Co., Inc. (“Cuttone”) to purchase the number of our ordinary shares equal to 2.125% of the ordinary shares being offered in this offering (excluding over-allotment) (the “Advisor’s Warrants”), there are no outstanding options, warrants, or similar rights to purchase any of our securities.
Underwriters’ Warrants
We have agreed to issue to our underwriters the Underwriters’ Warrants. The Underwriters’ Warrants shall have an exercise price equal to 100% of the offering price, terminate five years from the effective date of the offering, and have a cashless exercise provision. The Underwriters’ Warrants will be subject to FINRA Rule 5110(g)(1), except as otherwise permitted by FINRA rules, in that for a period of 180 days following the effectiveness of the registration statement, of which this prospectus forms a part, neither the Underwriters’ Warrants nor any ordinary shares issued upon exercise of the Underwriters’ Warrants shall be (A) sold, transferred, assigned, pledged, or hypothecated, or (B) the subject of any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the securities by any person. See “Underwriting–Underwriters’ Warrants” on page 86 for more information.
Advisor’s Warrants
Cuttone is acting as our independent financial adviser in connection with this offering. Cuttone is not acting as an underwriter in this offering, and accordingly it is neither purchasing ordinary shares nor offering ordinary shares to the public in connection with this offering.
In connection with its services as our independent financial adviser, we have agreed to issue to Cuttone the Advisor’s Warrants and to register herein the underlying ordinary shares. The Advisor’s Warrants will be exercisable at any time, and from time to time, in whole or in part, during the period commencing 180 days from the effective date of the offering, which period shall not extend further than five years from the effective date of this offering. The Advisor’s Warrants are exercisable at a per share price equal to 100% of the public offering price per share in the offering. The Advisor’s Warrants are also exercisable on a cashless basis. Neither Cuttone nor its assignees will sell, transfer, assign, pledge, or hypothecate the Advisor’s Warrants or the securities underlying the Advisor’s Warrants, nor will they engage in any hedging, short sale, derivative, put, or call transaction that would result in the effective economic disposition of the Advisor’s Warrants or the underlying securities for a period of 180 days from the effective date of the offering. In addition, the Advisor’s Warrants provide for registration rights upon request, in certain cases. The demand registration right provided will not be greater than five years from the effective date of the offering. The piggyback registration right provided will not be greater than seven years from the effective date of the offering. We will bear all fees and expenses attendant to registering the securities issuable on exercise of the Advisor’s Warrants other than underwriting commissions incurred and payable by the holders. The exercise price and number of shares issuable upon exercise of the Advisor’s Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary cash dividend or our recapitalization, reorganization, merger or consolidation. However, the warrant exercise price or underlying shares will not be adjusted for issuances of ordinary shares at a price below the warrant exercise price.
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Undertakings, page II-2
| 7. | Please remove the undertaking from Item 512(a)(5)(ii) of Regulation S-K. That undertaking is specific to reliance on Rule 430C. We note that you are relying on Rule 430A. Please also only include the undertaking in Item 512(h) of Regulation S-K once, and please include the totality of the undertaking in Item 512(a)(6) of Regulation S-K, rather than stopping at the first romanette. |
Response:We have revised the undertaking beginning on page II-2 as follows:
The undersigned registrant hereby undertakes to provide to the underwriters at the closing specified in the underwriting agreement certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the small business issuer pursuant to the foregoing provisions, or otherwise, the small business issuer has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the small business issuer of expenses incurred or paid by a director, officer or controlling person of the small business issuer 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, the small business issuer will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.
The undersigned registrant hereby undertakes:
| (1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
| (i) | To include any prospectus required by Section 10(a)(3) of the Securities Act; |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement(or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective Registration Statement; |
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| (iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
| (2) | That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; |
| (3) | That, for purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b) (1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. |
| (4) | For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
| (5) | File a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. |
| (6) | That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities: |
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The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
| (i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424 (§230.424 of this chapter); |
| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| (iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
* * * * *
We hope that the information contained in this letter satisfactorily addresses the comments by the Staff. Please do not hesitate to contact the undersigned or our attorney Francis Chen of LKP Global Law, LLP, at (424) 239-1890 or fchen@lkpgl.com.
| Very truly yours, | |
| Yulong Eco-Materials Limited | |
| /s/ Yulong Zhu | |
| Yulong Zhu | |
| Chief Executive Officer |
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(English Translation of Memorandum issued by the Pingdingshan Construction Wastes Management Office)
Factual Explanation
As Xulong has not yet formally commenced the waste recycling processing project, the work of cleaning and transporting Pingdingshan City’s construction waste will be carried out in its present form, with the Construction Wastes Management Office arranging for other entities to clean and transport the construction waste. When Xulong announces formal production of the recycling processing project, the processing of Pingdingshan City’s construction waste shall be executed in accordance with the terms of the agreement entered into between Xulong and the Pingdingshan Municipal Bureau of Housing and Urban-Rural Development.
Regarding the provision in the agreement between Xulong and the Pingdingshan Municipal Bureau of Housing and Urban-Rural Development requiring Xulong to timely complete the related waste collection processing site and facility, because the coordinating work by the related government agencies require certain period of time in order to complete, Xulong is not required to comply with such provision based on the actual situation and consultations of both parties. Xulong, however, is obligated to guarantee that the project will commence formal operation in 2015.
| Pingdingshan Construction Wastes Management Office | |
| [Chop] | |
| March 24, 2015 |
(Opinion of the People’s Government of Pingdingshan regarding the Implementation of Municipal Management Authority within Gaoxing Technology Industry Development District, Pingzheng (2014) No. 9)
(Notice of the People’s Government of Henan Province regarding the Printing and Distribution of the Overall Construction Plan of Pingdingshan Xincheng District, Yuzheng (2011) No. 85)
