UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Information Statement
Pursuant to Section 14(c)
of the Securities
Exchange Act of 1934
(Amendment No. 3)
Check the appropriate box:
| x | Preliminary Information Statement |
| o | Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2)) |
| o | Definitive Information Statement |
| NB TELECOM, INC. |
|---|
| (Name of Registrant as Specified In Its Charter) |
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
x No fee required.
o Fee computed on table below per Exchange Act Rules 14c-5(g)
| (1) | Title of each class of securities to which transaction applies: |
| (2) | Aggregate number of securities to which transaction applies: |
| (3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): |
| (4) | Proposed maximum aggregate value of transaction: |
| (5) | Total fee paid: |
o Fee paid previously with preliminary materials.
o Check box if any part of the fee is offset as provided by Exchange Act Rule O-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
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| (4) | Date Filed: |
NB TELECOM, INC.
No. 9 Qinling Road, Yingbin Road Centralized Industrial Park
Harbin Development Zone, Heilongjiang, China 150078
January __, 2009
Dear Stockholders:
The enclosed Information Statement is being furnished to the holders of record of shares of the common stock (the “Common Stock”) and Series B preferred stock (the “Series B Preferred Stock”) of NB Telecom, Inc., a Nevada corporation (the “Company”), as of the close of business on the record date, January 9, 2009. The purpose of the Information Statement is to notify our stockholders that on January 8, 2009, the Company received a written consent in lieu of a meeting of stockholders (the “Written Consent”) from one stockholder which has 70.22% of the total voting power holding 405,864 shares of Common Stock and 1,000,000 shares of Series B Preferred Stock, representing 50.36%, of the issued and outstanding shares of Common Stock and 100% of the issued and outstanding shares of Series B Preferred Stock with 40% of the total voting power, respectively, representing 70.22% of the voting power of the combined classes of stock. The Written Consent adopted the following resolutions, which authorized the Company to amend the Company’s Articles of Incorporation for the purpose of increasing the authorized capital from 10,805,802 shares, consisting of 805,802 shares of common stock, par value $0.0001 and 10,000,000 shares of preferred stock, par value $0.0001 to 550,000,000 authorized capital, consisting of 500,000,000 shares of common stock, par value $0.0001, and 50,000,000 shares of preferred stock, par value $0.0001.
You are urged to read the Information Statement in its entirety for a description of the actions taken by the majority stockholder of the Company. The resolutions will become effective twenty calendar days after this Information Statement is first mailed to our stockholders.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
No action is required by you. The enclosed Information Statement is being furnished to you to inform you that the foregoing actions have been approved by the holder of at least a majority of the outstanding shares of all voting stock of the Company. Because a stockholder holding at least a majority of the voting rights of our outstanding Common Stock and Series B Preferred Stock has voted in favor of the foregoing actions, and has sufficient voting power to approve such actions through his ownership of Common Stock and Series B Preferred Stock, no other stockholder consents will be solicited in connection with the transactions described in this Information Statement. The Board is not soliciting your proxy in connection with the adoption of these resolutions and proxies are not requested from stocks.
This Information Statement is being mailed on or about January 19, 2009 to stockholders of record on January 9, 2009.
Sincerely,
/s/ Jie Han
Jie Han
President
NB TELECOM, INC.
No. 9 Qinling Road, Yingbin Road Centralized Industrial Park
Harbin Development Zone, Heilongjiang, China 150078
This Information Statement is being furnished to the holders of record of shares of the common stock (the “Common Stock”) of NB Telecom, Inc., a Nevada corporation (the “Company”), as of the close of business on the record date, January 9, 2009. The purpose of the Information Statement is to notify our stockholders that on January 8, 2009, the Company received a written consent in lieu of a meeting of stockholders (the “Written Consent”) from the holder of 405,864 shares of Common Stock and 1,000,000 shares of Series B Preferred Stock, representing 50.36%, of the issued and outstanding shares of Common Stock and 100% of the issued and outstanding shares of Series B Preferred Stock, respectively, representing 70.22% of the voting power of the combined classes of stock which is calculated as follows: the 805,802 shares of Common Stock of the Company represents 60% of the voting power and the 1,000,000 shares of Series B Preferred Stock represents 40% of the voting power. Therefore, the stockholder which owns 405,864 shares of Common Stock and 1,000,000 shares of Series B Preferred Stock accounts for (a) 50.36% of the Common Stock 60% voting block or 50.36% multiplied by 60%, which equates to 30.22% of the total voting power of the Company, and (b) 100% of the Series B Preferred Stock voting block or 100% multiplied by 40% which equates to 40% of the total voting power of the Company. The aggregate voting power from the two classes of stock is 30.22% and 40% which equals 70.22% total. The stockholder acquired its shares of Common Stock and Series B Preferred Stock of the Company pursuant to that certain Agreement and Plan of Merger, dated December 24, 2008 entered into by the Company. The Written Consent adopted the following resolutions, which authorized the Company to amend the Company’s Articles of Incorporation for the purpose of increasing the authorized capital from 10,805,802 shares, consisting of 805,802 shares of common stock, par value $0.0001 and 10,000,000 shares of preferred stock, par value $0.0001 to 550,000,000 authorized capital, consisting of 500,000,000 shares of common stock, par value $0.0001, and 50,000,000 shares of preferred stock, par value $0.0001.
Because a stockholder holding at least a majority of the voting rights of our outstanding Common Stock and Series B Preferred Stock has voted in favor of the foregoing resolutions, and has sufficient voting power to approve such actions through his ownership of common stock, no other shareholder consents will be solicited in connection with the transactions described in this Information Statement. The Board is not soliciting proxies in connection with the adoption of these resolutions and proxies are not requested from stockholders.
In accordance with our bylaws, our board of directors has fixed the close of business on January 9, 2009 as the record date for determining the stockholders entitled to notice of the above noted actions. This Information Statement is being mailed on or about January 19, 2009 to stockholders of record on the record date.
We will pay all costs associated with the distribution of this Information Statement, including the costs of printing and mailing. In addition, we will only deliver one information statement to multiple security holders sharing an address, unless we have received contrary instructions from one or more of the security holders. Also, we will promptly deliver a separate copy of this information statement and future stockholder communication documents to any security holder at a shared address to which a single copy of this information statement was delivered, or deliver a single copy of this information statement and future stockholder communication documents to any security holder or holders sharing an address to which multiple copies are now delivered, upon written request to us at our address noted above.
Security holders may also address future requests regarding delivery of information statements by contacting us at the address noted above.
Approval to amend the current Articles of Incorporation of the Company under the Nevada Revised Statutes (“NRS”) Section 78.390 (the “Amendment”) require the affirmative vote of the holders of a majority of the voting power of the Company. Accordingly, the holders of a majority of the voting power of the Company must approve the Amendment.
In addition, NRS 78.320 provides in substance that stockholders may take action without a meeting of the stockholders and without prior notice if a consent or consents in writing, setting forth the action so taken, is signed by the holders of the outstanding voting shares holding not less than the minimum number of votes that would be necessary to approve such action at a stockholders meeting. This action is effective when written consents from holders of record of a majority of the outstanding shares of voting stock are executed and delivered to the Company.
The Company has two classes of voting stock outstanding consisting of Common Stock and Series B Preferred Stock. There are currently 805,802 shares of Common Stock issued and outstanding, and each share of Common Stock is entitled to 1 vote. The holder of the Series B Preferred Stock has voting power equivalent to 40% of the total voting power of all Common Stock holders of the Company. Accordingly, by way of example, the vote or written consent of (1) the stockholders holding at least 671,502 shares of the Common Stock or (2) the stockholder holding at least the 1,000,000 shares of the Series B Preferred Stock issued and outstanding and at least an additional 134,301 shares of the Common Stock is necessary to approve the filing of the Certificate of Amendment. In accordance with our bylaws, our board of directors has fixed the close of business on January 9, 2009 as the record date for determining the stockholders entitled to vote or give written consent.
2
On January 8, 2009, a stockholder holding 405,864 shares of Common Stock and 1,000,000 shares of Series B Preferred Stock, representing 50.36%, of the issued and outstanding shares of Common Stock and 100% of the issued and outstanding shares of Series B Preferred Stock (representing 70.22% of the voting power of the combined classes of stock) executed and delivered to the Company the Written Consent. Accordingly, in compliance with the NRS, at least a majority of the outstanding shares has approved the Amendment. As a result, no vote or proxy is required by the stockholders to approve the adoption of the foregoing resolutions.
Under Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as amended (the “Act”), the Articles of Amendment may not be filed with the Nevada Secretary of State until twenty calendar days after this Information Statement is first mailed to our stockholders. As mentioned earlier the Amendment will become effective upon the filing of the Articles of Amendment with the Secretary of State of the State of Nevada, which is anticipated to be on or about February 9, 2009, twenty days after the mailing of this Information Statement.
On January 8, 2009, the Company received a written consent in lieu of a meeting of stockholders (the “Written Consent”) from the holder of 405,864 shares of Common Stock and 1,000,000 shares of Series B Preferred Stock, representing 50.36%, of the issued and outstanding shares of Common Stock and 100% of the issued and outstanding shares of Series B Preferred Stock having a total voting power of 40%, respectively, representing 70.22% of the voting power of the combined classes of stock which is calculated as follows: the 805,802 shares of Common Stock of the Company represents 60% of the voting power and the 1,000,000 shares of Series B Preferred Stock represents 40% of the voting power. Therefore, the stockholder which owns 405,864 shares of Common Stock and 1,000,000 shares of Series B Preferred Stock accounts for (a) 50.36% of the Common Stock 60% voting block or 50.36% multiplied by 60%, which equates to 30.22% of the total voting power of the Company, and (b) 100% of the Series B Preferred Stock voting block or 100% multiplied by 40% which equates to 40% of the total voting power of the Company. The aggregate voting power from the two classes of stock is 30.22% and 40% which equals 70.22% total. The Written Consent adopted the resolutions, which authorized the Company to amend the Company’s Articles of Incorporation for the purpose of increasing the authorized capital from 10,805,802 shares, consisting of 805,802 shares of common stock, par value $0.0001 and 10,000,000 shares of preferred stock, par value $0.0001 to 550,000,000 authorized capital, consisting of 500,000,000 shares of common stock par value $0.0001, and 50,000,000 shares of preferred stock, par value $0.0001. The text of the proposed Amendment to the Articles of Incorporation which contains the increase in the authorized capital is attached hereto as Appendix I. This Amendment will not affect total stockholder equity but will increase the authorized capitalization of the Company. Subsequent to the Amendment and the conversion of the 1,000,000 shares of the convertible Series A Preferred Stock, there will be approximately 39,000,000 shares of Common Stock of the Company issued and outstanding.
3
Our Board of Directors believes that by increasing the number of authorized capital of the Company will give the Company more flexibility to meet its obligations. Currently, the Company does not have sufficient shares of Common Stock authorized to (a) honor certain post merger contractual obligations under that certain Agreement and Plan of Merger the Company entered into on December 24, 2008 whereby there are 1,000,000 shares of convertible Series A preferred stock of the Company convertible into approximately 1:38.2 into 38,194,072 shares of Common Stock of the Company, and (b) allow for future transactions to raise the working capital funds of the Company. Accordingly, the Company needs to increase its authorized share capital. Subsequent to the Amendment and the conversion of the 1,000,000 shares of the convertible Series A Preferred Stock, there will be approximately 39,000,000 shares of Common Stock of the Company issued and outstanding. Management of the Company currently does not have any loans, proposals or arrangements with respect to future transactions to raise the working capital funds of the Company as referenced above.
The additional Common Stock authorized by the proposed amendment would have rights identical to our currently outstanding Common Stock. Holders of our Common Stock are entitled to 1 vote per share. The additional Series B Preferred Stock authorized by the proposed amendment would have rights identical to our currently outstanding Series B Preferred Stock such that holders of Series B Preferred Stock have voting power equivalent to 40% of the total voting power of all Common Stock holders of the Company. Holders of our Common Stock and Series B Preferred Stock are entitled to vote on all matters submitted to a vote of our stockholders, including the election of directors, and except as otherwise required by law, the holders of such shares will exclusively possess all voting power. Holders of Common Stock and Series B Preferred Stock do not have the right to cumulative voting for the election of directors. Subject to the preferential rights of any outstanding series of preferred stock, the holders of Common Stock and Series B Preferred Stock will be entitled to such dividends as may be declared from time to time by our Board from funds legally available therefore and will be entitled to receive pro rata all of our assets available for distribution to such holders upon liquidation. The Board further believes that it is in Company’s best interests to increase the number of authorized shares of Common Stock in order to provide the Company with the flexibility to issue Common Stock without further action by the Company’s stockholders (unless required by law or regulation) for such other corporate purposes as the Board may deem advisable. These purposes may include, among other things, the sale of shares to obtain additional capital funds, the purchase of property, the use of additional shares for various equity compensation and other employee benefit plans of the Company or of acquired companies, the acquisition of other companies, and other bona fide purposes.
| (1) | Summary Term Sheet: |
| • | On December 24, 2008, the NB Telecom, Inc. (the “Company”) entered into an Agreement and Plan of Merger (the “Agreement”) by and among its wholly owned acquisition subsidiary China XD Plastics Company Limited (the “Merger Sub”), a Nevada corporation, Favor Sea Limited (“Favor Sea”), a corporation formed under the laws of the British Virgin Islands, and the shareholders of Favor Sea including the principal shareholder, XD. Engineering Plastics Company Limited (“XD”), a British Virgin Islands corporation. |
4
| • | In connection with the acquisition, and in exchange for the outstanding stock of Favor Sea, the shareholders of Favor Sea received 50,367,778 shares of the common stock of the Company and 1,000,000 shares of convertible Series A preferred stock of the Company, and XD individually received 1,000,000 shares of Series B preferred stock of the Company (the “Merger”). |
| • | The 50,367,778 shares of common stock were converted into 805,802 shares post a reverse stock split of 124.1:1 for 1. |
| • | The 1,000,000 shares of convertible Series A preferred stock of the Company are convertible into approximately 1:38.2 into 38,194,072 shares of the common stock of the Company. Assuming the conversion of the Series A preferred stock of the Company, the shareholders of Favor Sea will own approximately 99% of the Common Stock of the Company. |
| • | Subsequent to the Merger and as a direct consequence, the name of the Company was changed to “China XD Plastics Company Limited.” |
| (2) | Contact Information: |
Contact information for both NB Telecom, Inc. and China XD Plastics Company Limited is:
NB Telecom, Inc./China XD
Plastics Company Limited
No. 9 Qinling Road,
Yingbin Road Centralized Industrial
Park Harbin Development Zone,
Heilongjiang, China 150078
| (3) | Business conducted: |
NB Telecom, Inc. (the “Company”) is a provider of both privately owned and company owned payphones and stations in Pennsylvania. The Company receives revenues from the collection of the payphone coinage, a portion of usage of service from each payphone and a percentage of long distance calls placed from each payphone from the telecommunications service providers. In addition, the Company also receives revenues from the service and repair of privately owned payphones, sales of payphone units and the sales of prepaid phone cards.
China XD Plastics Company Limited (the “Merger Sub”) is a wholly-owned subsidiary of the Company which has been established solely for the purpose of this transaction and does not have any business, assets, liabilities or operations.
Favor Sea Limited is a holding company whose only asset, held through a subsidiary, is 100% of the registered capital of Harbin Xinda Macromolecule Material Co., Ltd., a limited liability company organized under the laws of the People’s Republic of China.
5
Harbin Xinda Macromolecule Material Co. Ltd. (“Xinda”) is a high-tech company that was founded in September 2004 under the laws of the People’s Republic of China with registered capital of 20 million RMB (US$2,416,451). Xinda’s executive offices and manufacturing facility are located at No. 9 Qinling Road, Yingbin Road Centralized Industrial Park, Harbin Development Zone, Heilongjiang Province, in northeast China. Xinda engages in the development, manufacture, and distribution of modified plastic, primarily for use in automobiles. The technology that has enabled us to become China’s leading producer of automotive modified plastics is carried in our wholly-owned research laboratory, Harbin Xinda Macromolecule Material Research Institute (“the Research Institute”), a subsidiary established in 2007. The Research Institute has developed into a leader in research and development for China’s macromolecular industry. The Research Institute is outfitted with more than 80 sets of testing, analytical and production equipment used to analyze the physical and mechanical properties of the heat resistances, durability, stability, and environmental performance exhibited by modified plastics.
| (4) | Terms of the Transaction. |
On December 24, 2008, the Company entered into an Agreement and Plan of Merger (the “Agreement”) by and among its wholly owned acquisition subsidiary China XD Plastics Company Limited (the “Merger Sub”), a Nevada corporation, Favor Sea Limited (“Favor Sea”), a corporation formed under the laws of the British Virgin Islands, and the shareholders of Favor Sea including the principal shareholder, XD. Engineering Plastics Company Limited (“XD”), a British Virgin Islands corporation. The Company engaged in the transaction to improve shareholders’ values based on the lackluster performance of the Company’s existing operations. The acquired entity, Favor Sea and its principal shareholder, XD, entered into the transaction to become a U.S. listed company based on their cost-benefit analysis which was made before the financial meltdown of the U.S. As disclosed in the Current Report on Form 8-K, filed with the Securities and Exchange Commission on December 31, 2008, pursuant to the Agreement, the Company acquired all of the outstanding capital stock of Favor Sea, through the Merger Sub. Favor Sea is a holding company whose only asset, held through a subsidiary, is 100% of the registered capital of Harbin Xinda Macromolecule Material Co., Ltd. (“Xinda”), a limited liability company organized under the laws of the People’s Republic of China. In connection with the acquisition, and in exchange for the outstanding stock of Favor Sea the shareholders of Favor Sea received 50,367,778 shares of the common stock of the Company and 1,000,000 shares of convertible Series A preferred stock of the Company, and XD individually received 1,000,000 shares of Series B preferred stock of the Company (the “Merger”). Subsequent to the Merger and as a direct consequence, the name of the Company was changed to “China XD Plastics Company Limited” pursuant to Chapter 92A the Revised Nevada Statutes in connection with the Merger. The 50,367,778 shares of common stock were converted into 805,802 shares post a reverse stock split of 124.1:1 for 1 pursuant to Nevada Revised Statutes Section 78.207 for both the total number of authorized shares of common stock and the total number of issued and outstanding shares of common stock. The 1,000,000 shares of convertible Series A preferred stock of the Company are convertible into approximately 1:38.2 into 38,194,072 shares of the common stock of the Company. Assuming the conversion of the Series A preferred stock of the Company, the shareholders of Favor Sea will own approximately 99% of the Common Stock of the Company.
6
| (5) | Regulatory Approvals: |
The Company has obtained the relevant approval for the merger, the name change and the reverse split from the Secretary of State of Nevada.
| (6) | Reports, opinions, appraisals: |
Not applicable.
| (7) | Past contacts, transactions or negotiations: |
None.
| (8) | Selected financial data: |
Not applicable.
| (9) | Pro Forma Information: |
Summary Selected Pro Forma Condensed Consolidated Financial Data
The following summary selected unaudited pro forma condensed consolidated balance sheet has been presented with consolidated subsidiaries at September 30, 2008. The following summary selected unaudited pro forma condensed consolidated statement of income for the nine months ended September 30, 2008 and for the year ended December 31, 2007 has been presented as if the acquisition had occurred January 1, 2007.
The unaudited pro forma condensed consolidated statements do not necessarily represent the actual results that would have been achieved had the companies been combined at the beginning of the year, nor may they be indicative of future operations. These unaudited pro forma condensed financial statements should be read in conjunction with the companies’ respective historical financial statements and notes included thereto.
| Year ended December 31, 2007 |
Nine months ended September 30, 2008 |
|||||||
|---|---|---|---|---|---|---|---|---|
| Income Statement Data | ||||||||
| Net Revenues | $ | 34,177,415 | $ | 55,802,003 | ||||
| Gross profit | $ | 6,347,442 | $ | 13,921,235 | ||||
| Income from operations | $ | 5,622,507 | $ | 12,019,405 | ||||
| Net income | $ | 5,272,502 | $ | 11,437,903 | ||||
| Net income per common share—basic | $ | 0.12 | $ | 0.25 | ||||
| Weighted average number of shares used in | ||||||||
| calculating net income per share—basic | 49,632,222 | 49,632,222 | ||||||
7
| As at September 30, 2008 |
|||||
|---|---|---|---|---|---|
| Balance Sheet Data | |||||
| Current assets | $ | 47,191,190 | |||
| Total assets | $ | 60,083,321 | |||
| Current liabilities | $ | 38,148,515 | |||
| Total liabilities | $ | 38,148,515 | |||
| Minority interests | $ | 0 | |||
| Stockholders' equity | $ | 21,934,806 | |||
| (10) | Pro Forma Information: |
| Historical and Pro Forma Per Share Data |
The following table sets forth the historical and pro forma per share data of Favor Sea and pro forma historical and equivalent pro forma data of the Company:
| 9/30/2008 |
Favor Sea Historical |
NB Telecom, Inc. Historical |
NB Telecom, Inc. Pro Forma Combined |
Favor Sea Pro Forma Equivalent |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Book value | 60,083,321 | 5,877 | 60,083,321 | |||||||||||
| Shares used in calculation | 40,000 | 49,632,222 | 49,632,222 | |||||||||||
| Book value per share | 1,502 | 0.00 | 1.21 | 1,524.108696 | ||||||||||
| Earnings (loss) per share | 285.95 | 0.00 | 0.25 | 314.75 | ||||||||||
| Dividends | 0 | 0 | 0 | |||||||||||
| Dividends per share | 0 | 0 | 0 | |||||||||||
| FOR THE YEAR ENDED 12/31/2007 | ||||||||||||||
| Earnings (loss) per share | 131.81 | 0 | 0.12 | 151.08 | ||||||||||
| Dividends | 0 | 0 | 0 | 0 | ||||||||||
| Dividends per share | 0 | 0 | 0 | 0 | ||||||||||
| (11) | Pro Forma Information: |
See the unaudited pro forma condensed consolidated financial statements of the Company at the end of this Information Statement.
8
Our Chief Executive
Officer has a large degree of control on us through his position and stock ownership and
his
interests may differ from other stockholders.
Our Chief Executive Officer, Mr. Jie Han has an option on XD. Engineering Plastics Company Limited’s shares. As a result, Mr. Han will be able to influence the outcome of stockholder votes on various matters, including the election of directors and extraordinary corporate transactions such as business combinations. Mr. Han’s interests may differ from that of other stockholders.
There are now 1,000,000 shares of Series B Preferred Stock issued to XD. Engineering Plastics Company Limited with 40% of the total voting power of the Company’s common stock put together and other consent rights on mergers and acquisitions, significant acquisition or disposition of assets and change of control, among others. This gives XD. Engineering Plastics Company Limited significant voting power. Such voting power may enable XD. Engineering Plastics Company Limited to block actions that may benefit the common stockholders thus reduce the value of their holdings.
Existing shareholders will experience dilution from the conversion of Series A Convertible Preferred Stock
Assuming the conversion of the 1,000,000 shares of convertible Series A Preferred Stock, the percentage ownership of the existing shareholders who do not hold such shares of convertible Series A Preferred Stock will be reduced. Such existing shareholders will experience subsequent dilution, however such newly issued securities will not have rights, preferences and privileges senior to those of the existing shareholders.
The following table lists, as of January 7, 2009, the number of shares of common stock beneficially owned by (i) each person or entity known to the Company to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each officer and director of the Company, and (iii) all officers and directors as a group. Information relating to beneficial ownership of common stock by our principal stockholders and management is based upon information furnished by each person using “beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.
The Certificate of Change to effectuating the 124.1 to 1 reverse split of the issued and outstanding shares of common stock, while correspondingly reducing the Company’s authorized capital, was filed with the Secretary of State of Nevada on January 6, 2009. As of such date, the Company had 110,000,000 shares of stock authorized, of which 100,000,000 shares of common stock were authorized, issued and outstanding and 10,000,000 shares of preferred stock were authorized, of which 1,000,000 shares of Series A Preferred Stock were issued and outstanding and 1,000,000 shares of Series B Preferred Stock were issued and outstanding.
There are no options or warrants convertible into shares of Common Stock. There are 1,000,000 shares of convertible Series A preferred stock of the Company convertible approximately 1:38.2 into 38,194,072 shares of Common Stock of the Company.
9
| Name and Address of Beneficial Owner(1) |
Amount and Nature of Beneficial Ownership(2) |
Percentage of Class |
||||||
|---|---|---|---|---|---|---|---|---|
| Paul Kelly | 0 | — | ||||||
| Craig Burton | 0 | — | ||||||
| Leonard Battaglia | 0 | |||||||
| All officers and directors | ||||||||
| as a group (3 persons) | 0 | — | ||||||
| XD. Engineering Plastics Company Limited | 405,864 | 50.36% | (3) | |||||
| P.O. Box 957, Offshore Incorporations Centre | ||||||||
| Road Town, Tortola, British Virgin Islands | ||||||||
| (1) | Except as otherwise noted, each shareholder's address is No. 9 Qinling Road, Yingbin Road Centralized Industrial Park, Harbin Development Zone, Heilongjiang, China 150078. |
| (2) | Except as otherwise noted, all shares are owned of record and beneficially. |
| (3) | XD is the holder of 1,000,000 shares of convertible Series A preferred stock of the Company convertible approximately 1:38.2 into 38,194,072 shares of Common Stock of the Company. XD also is the holder of 1,000,000 shares of Series B Preferred Stock which has voting power equivalent to 40% of the total |
10
The following is a summary of the compensation paid to our executive officers for the two years ending December 31, 2007.
|
SUMMARY COMPENSATION TABLE |
|||||||||
|
Name and Principal Position |
Year |
Salary |
Bonus |
Stock Awards |
Option Awards |
Nonequity Incentive Plan Compensation |
Nonqualified Deferred Compensation Earnings |
All Other Compensation |
Total ($) |
|
Paul Kelly |
2006 |
$33,448 |
$0 |
$0 |
$0 |
0 |
$0 |
$0 |
$33,448 |
|
|
2007 |
$23,270 |
$0 |
$0 |
$0 |
0 |
$0 |
$0 |
$23,270 |
|
Craig Burton |
2006 |
$0 |
$0 |
$0 |
$0 |
0 |
$0 |
$0 |
$0 |
|
|
2007 |
$0 |
$0 |
$0 |
$0 |
0 |
$0 |
$300 |
$300 |
11
The following is a summary of all options, unvested stock and equity incentive plans for our Executive Officers for the year ending December 31, 2007.
|
|
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END |
||||||||
|
|
Option Awards |
Stock Awards |
|||||||
|
Name |
Number of Securities Underlying Unexercised Options Exercisable |
Number of Securities Underlying Un-Exercised Options Un-Exercisable |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options |
Option Exercise Price |
Option Expiration Date |
Number of Shares or Units of Stock That Have Not Vested |
Market Value of Shares or Units of Stock That Have Not Vested |
Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested |
Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested |
|
Paul Kelly |
0 |
0 |
0 |
N/A |
N/A |
0 |
0 |
0 |
0 |
|
Craig Burton |
0 |
0 |
0 |
N/A |
N/A |
0 |
0 |
0 |
0 |
The following is a summary of the compensation paid to our Directors for the period ending December 31, 2007.
|
DIRECTOR COMPENSATION |
|||||||
|
Name |
Fees Earned or Paid in Cash |
Stock Awards |
Option Awards |
Non-Equity Incentive Plan Compensation |
Nonqualified Deferred Compensation Earnings |
All Other Compensation |
Total |
|
Paul Kelly |
23,270 |
0 |
0 |
0 |
0 |
0 |
23,270 |
|
Craig Burton |
300 |
0 |
0 |
0 |
0 |
0 |
300 |
|
Leonard J. Battaglia |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
12
Other than as described in this Information Statement, none of the following parties has, since the date of incorporation of the Company, had any material interest, direct or indirect, in any transaction with the Company or in any presently proposed transaction that has or will materially affect us:
| — | any of our directors or officers; |
| — | any person proposed as a nominee for election as a director; |
| — | any person who beneficially owns, directly or indirectly, shares carrying more than 10% of the voting rights attached to our outstanding shares of common stock; or |
| — | any relative or spouse of any of the foregoing persons who has the same house as such person. |
No director, executive officer, associate of any officer or director or executive officer, or any other person has any interest, direct or indirect, by security holdings or otherwise, in the Amendment to the Articles of Incorporation or reverse split which is not shared by all other stockholders.
The Board knows of no other matters other than those described in this Information Statement which have been approved or considered by the holders of a majority of the shares of the Company’s voting stock.
INVESTOR INFORMATION
All reports filed by the Company with the SEC are available free of charge via EDGAR through the SEC website at www.sec.gov. In addition, the public may read and copy materials filed by the Company with the SEC at the SEC's public reference room located at 450 Fifth St., N.W., Washington, D.C. 20549. You can obtain information about the operation of the SEC's Public Reference Room by calling the SEC at 1-800-SEC-0330.
13
IF YOU HAVE ANY QUESTIONS REGARDING THIS INFORMATION STATEMENT AND/OR THE ARTICLES OF AMENDMENT, PLEASE CONTACT:
NB TELECOM, INC.
No. 9 Qinling Road,
Yingbin Road Centralized Industrial Park
Harbin Development Zone, Heilongjiang, China
150078
By Order of the Board of Directors,
/s/ Jie Han
Jie Han
President
14
On December 24, 2008, the Company entered into an Agreement and Plan of Merger (the “Agreement”) by and among its wholly owned acquisition subsidiary China XD Plastics Company Limited (the “Merger Sub”), a Nevada corporation, Favor Sea Limited (“Favor Sea”), a corporation formed under the laws of the British Virgin Islands, and the shareholders of Favor Sea including the principal shareholder, XD. Engineering Plastics Company Limited (“XD”), a British Virgin Islands corporation. Pursuant to the Agreement, the Company acquired all of the outstanding capital stock of Favor Sea, through the Merger Sub. Favor Sea is a holding company whose only asset, held through a subsidiary, is 100% of the registered capital of Harbin Xinda Macromolecule Material Co., Ltd. (“Xinda”), a limited liability company organized under the laws of the People’s Republic of China. In connection with the acquisition and in exchange for the outstanding stock of Favor Sea the shareholders of Favor Sea received 50,367,778 shares of the common stock of the Company and 1,000,000 shares of convertible Series A preferred stock of the Company, and XD individually received 1,000,000 shares of Series B preferred stock of the Company (the “Merger”). Subsequent to the Merger and as a direct consequence, the name of the Company was changed to “China XD Plastics Company Limited” pursuant to Chapter 92A the Revised Nevada Statutes in connection with the Merger. The 50,367,778 shares of common stock were converted into 805,802 shares post a reverse stock split of 124.1:1 for 1 pursuant to Nevada Revised Statutes Section 78.207 for both the total number of authorized shares of common stock and the total number of issued and outstanding shares of common stock. The 1,000,000 shares of convertible Series A preferred stock of the Company are convertible into approximately 1:38.2 into 38,194,072 shares of the common stock of the Company. Assuming the conversion of the Series A preferred stock of the Company, the shareholders of Favor Sea will own approximately 99% of the Common Stock of the Company.
Immediately before and in conjunction with the consummation of the Merger, the Parent will spin off all of assets and liabilities to Sotech, Inc., a Georgia corporation so the only material assets of the Parent following the Spin-off will be the ownership of the Merger Sub.
Favor Sea owns 100% of its subsidiaries, Favor Sea (US) Limited, a New York corporation, Hong Kong Engineering Plastics Company Limited, a corporation established and existing in China, which in turn owns 100% ownership interest in Harbin Xinda Macromolecule Material Co., Ltd., a limited liability company established and existing in China.
The acquisition will be accounted for as a reverse merger under the purchase method of accounting since there was a change of control. Accordingly, Favor Sea will be treated as the continuing entity for accounting purposes.
F-1
The accompanying unaudited pro forma condensed consolidated balance sheet has been presented with consolidated subsidiaries at September 30, 2008. The unaudited pro forma condensed consolidated statement of income for the nine months ended September 30, 2008 and for the year ended December 31, 2007 has been presented as if the acquisition had occurred January 1, 2007.
The unaudited pro forma condensed consolidated statements do not necessarily represent the actual results that would have been achieved had the companies been combined at the beginning of the year, nor may they be indicative of future operations. These unaudited pro forma condensed financial statements should be read in conjunction with the companies’ respective historical financial statements and notes included thereto.
F-2
| NB TELECOM, INC |
FAVOR SEA LIMITED |
Adjustments |
Notes |
(1) Pro Forma |
|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ASSETS | |||||||||||||||||
| Current Assets | |||||||||||||||||
| Cash and cash equivalents | $ | — | $ | 2,167,016 | $ | 2,167,016 | |||||||||||
| Restricted Cash | — | 4,388,872 | 4,388,872 | ||||||||||||||
| Comissions and sales receivable, net | 5,553 | ) | — | (5,553 | ) | a | — | ||||||||||
| Notes Receivable | — | 831,522 | 831,522 | ||||||||||||||
| Accounts receivable - net of allowance | |||||||||||||||||
| for bad debts of $100,148 and $93,219, | |||||||||||||||||
| respectively | — | 16,623,310 | 16,623,310 | ||||||||||||||
| Other receivables | — | 3,420,543 | 3,420,543 | ||||||||||||||
| Inventories | 324 | 10,786,227 | (324 | ) | a | 10,786,227 | |||||||||||
| Advances to suppliers | — | 8,973,700 | 8,973,700 | ||||||||||||||
| Total current assets | 5,877 | 47,191,190 | 47,191,190 | ||||||||||||||
| Property and Equipment, Net | — | 12,641,860 | 12,641,860 | ||||||||||||||
| Other assets: | |||||||||||||||||
| Intangible asset, net | — | 250,271 | 250,271 | ||||||||||||||
| Total other assets | — | 250,27 | 250,271 | ||||||||||||||
| TOTAL ASSETS | $ | 5,877 | $ | 60,083,321 | $ | 60,083,321 | |||||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | |||||||||||||||||
| Current Liabilites | |||||||||||||||||
| Short Term Loan | $ | — | $ | 21,797,081 | $ | 21,797,081 | |||||||||||
| Notes Payable | 119,214 | 9,867,597 | (119,214 | ) | a | 9,867,597 | |||||||||||
| Accounts payable | 190,588 | 1,560,312 | (190,588 | ) | a | 1,560,312 | |||||||||||
| Other payable | 2,166 | 3,175,438 | (2,166 | ) | a | 3,175,438 | |||||||||||
| Accrued expenses | — | 709,652 | 709,652 | ||||||||||||||
| Tax payable | — | 145,320 | 145,320 | ||||||||||||||
| Due to shareholders | — | 620,000 | 620,000 | ||||||||||||||
| Deferred revenue | — | 273,115 | 273,115 | ||||||||||||||
| Total current liabilities | 311,968 | 38,148,515 | 38,148,515 | ||||||||||||||
| STOCKHOLDERS' EQUITY (DEFICIT) | |||||||||||||||||
| Common Stock, .0001 par value 100,000,000 | |||||||||||||||||
| shares authorized, 49,632,222 shares issued | |||||||||||||||||
| and outstanding at September 30, 2008 | 4,963 | — | 4,963 | ||||||||||||||
| Common Stock, $1 par value, 50,000 shares | |||||||||||||||||
| authorized, 40,000 shares issued and | |||||||||||||||||
| outstanding as of September 30, 2008 | — | 40,000 | (40,000 | ) | b | — | |||||||||||
| Additional paid-in capital | 501,474 | 2,443,066 | (466,437 | ) | a,b | 2,478,103 | |||||||||||
| Accumulated other comprehensive income | — | 1,650,186 | 1,650,186 | ||||||||||||||
| Retained earnings | (812,528 | ) | 17,801,554 | 812,528 | a,b | 17,801,554 | |||||||||||
| Total stockholders' equity (deficit) | (306,091 | ) | 21,934,806 | 21,934,806 | |||||||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) | $ | 5,877 | $ | 60,083,321 | $ | 60,083,321 | |||||||||||
(1) Represents reverse acquisition showing the assets and liabilities of Favor Sea Only
See Notes to unaudited Pro forma condensed consolidated financial statements
F-3
| NB TELECOM, INC |
FAVOR SEA LIMITED |
Adjustments |
Notes |
Pro Forma |
|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| REVENUES | $ | 9,522 | $ | 55,802,003 | $ | (9,522 | ) | a | $ | 55,802,003 | |||||||
| COST OF GOODS SOLD | 10,329 | 41,880,768 | (10,329 | ) | a | 41,880,768 | |||||||||||
| GROSS PROFIT | (807 | ) | 13,921,235 | 13,921,235 | |||||||||||||
| OPERATING EXPENSES | |||||||||||||||||
| Research and development expense | — | 557,746 | 557,746 | ||||||||||||||
| Selling expense | — | 241,823 | 241,823 | ||||||||||||||
| General and adminstrative expenses | 7,506 | 1,102,261 | (7,506 | ) | a | 1,102,261 | |||||||||||
| Total operating expense | 7,506 | 1,901,830 | 1,901,830 | ||||||||||||||
| NET INCOME (LOSS) FROM OPERATIONS | (8,313 | ) | 12,019,405 | 12,019,405 | |||||||||||||
| OTHER INCOME (EXPENSE) | |||||||||||||||||
| Interest income (expense) | (13,805 | ) | (481,875 | ) | 13,805 | a | (481,875 | ) | |||||||||
| Other income | — | 25,665 | 25,665 | ||||||||||||||
| Other expense | — | (100,881 | ) | (100,881 | ) | ||||||||||||
| Total other income and (expense) | (13,805 | ) | (557,091 | ) | (557,091 | ) | |||||||||||
| NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | |||||||||||||||||
| AND MINORITY INTEREST | (22,118 | ) | 11,462,314 | 11,462,314 | |||||||||||||
| PROVISION FOR INCOME TAX | — | 24,411 | 24,411 | ||||||||||||||
| NET INCOME (LOSS) APPLICABLE TO COMMON SHARES | $ | (22,118 | ) | $ | 11,437,903 | $ | 11,437,903 | ||||||||||
| OTHER COMPREHENSIVE INCOME | — | 1,031,080 | 1,031,080 | ||||||||||||||
| COMPREHENSIVE INCOME | $ | (22,118 | ) | $ | 12,468,983 | $ | 12,468,983 | ||||||||||
| BASIC AND DILUTED INCOME (LOSS) PER SHARE | $ | (0.00 | ) | $ | 285.95 | $ | (285.70 | ) | b | $ | 0.25 | ||||||
| WEIGHTED AVERAGE NUMBER | |||||||||||||||||
| OF COMMON SHARES | 49,632,222 | 40,000 | 49,632,222 | ||||||||||||||
See Notes to unaudited Pro forma condensed consolidated financial statements
F-4
| NB TELECOM, INC |
FAVOR SEA LIMITED |
Adjustments |
Notes |
Pro Forma |
||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| REVENUES | $ | 71,291 | $ | 34,177,415 | $ | (71,291 | ) | a | $ | 34,177,415 | ||||||||||
| COST OF GOODS SOLD | 63,570 | 27,829,973 | (63,570 | ) | a | 27,829,973 | ||||||||||||||
| GROSS PROFIT | 7,721 | 6,347,442 | 6,347,442 | |||||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||||
| Research and development expense | — | 189,329 | 189,329 | |||||||||||||||||
| Selling expense | — | 131,772 | 131,772 | |||||||||||||||||
| General and adminstrative expenses | 97,884 | 403,834 | (97,884 | ) | a | 403,834 | ||||||||||||||
| Total operating expense | 97,884 | 724,935 | 724,935 | |||||||||||||||||
| NET INCOME (LOSS) FROM OPERATIONS | (90,163 | ) | 5,622,507 | 5,622,507 | ||||||||||||||||
| OTHER INCOME (EXPENSE) | ||||||||||||||||||||
| Interest income (expense) | (23,185 | ) | (152,684 | ) | 23,185 | a | (152,684 | ) | ||||||||||||
| Other income | 6,160 | ) | 10,434 | (6,160 | ) | a | 10,434 | |||||||||||||
| Other expense | (2,398 | ) | (207,687 | ) | 2,398 | a | (207,687 | ) | ||||||||||||
| Total other income and (expense) | (19,423 | ) | (349,937 | ) | (349,937 | ) | ||||||||||||||
| NET INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES | ||||||||||||||||||||
| AND MINORITY INTEREST | (109,586 | ) | 5,272,570 | 5,272,570 | ||||||||||||||||
| PROVISION FOR INCOME TAX | 735 | — | (735 | ) | a | — | ||||||||||||||
| NET INCOME (LOSS) APPLICABLE TO COMMON SHARES | $ | (110,321 | ) | $ | 5,272,570 | $ | 5,272,570 | |||||||||||||
| OTHER COMPREHENSIVE INCOME | — | 482,932 | 482,932 | |||||||||||||||||
| COMPREHENSIVE INCOME | $ | (110,321 | ) | $ | 5,755,502 | $ | 5,755,502 | |||||||||||||
| BASIC AND DILUTED INCOME (LOSS) PER SHARE | $ | (0.00 | ) | $ | 131.81 | (131.70 | ) | b | $ | 0.12 | ||||||||||
| WEIGHTED AVERAGE NUMBER | ||||||||||||||||||||
| OF COMMON SHARES | 49,632,222 | 40,000 | 49,632,222 | |||||||||||||||||
See Notes to unaudited Pro forma condensed consolidated financial statements
F-5
The following unaudited pro forma adjustments are included in the accompanying unaudited pro forma condensed consolidated balance sheet as of September 30, 2008 and the unaudited pro forma condensed consolidated statement of income for the nine months ended September 30, 2008 and for the year ended December 31, 2007 to reflect the acquisition of Favor Sea by the Merger Sub and the Parent:
| a. | To record the spin-off of the Parent’s assets and liabilities prior to the reverse acquisition; |
| b. | These adjustments reflect the recapitalization as a result of the transactions related to the share exchange. |
F-6
Appendix I
NB Telecom, Inc., a corporation organized and existing under the laws of the State of Nevada, hereby certifies asfollows:
1. The name of the corporation is NB Telecom, Inc. The date of filing of its original Articles of Incorporation with the Secretary of State was December 1, 2005.
2. This Amended Articles of Incorporation amends the provisions of the Articles of Incorporation of this corporation in full.
3. The text of the Articles of Incorporation as amended and heretofore is hereby amended to read as herein set forth in full:
The total number of shares of all classes which the Corporation has authority to issue is 550,000,000, of which 500,000,000 shares shall be designated as “Common Stock” with a par value of $.0001 per share, and 50,000,000 shares shall be designated as “Preferred Stock” with a par value of $.0001 per share.
The designations and the preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption of the shares of each class of stock are as follows:
A. Preferred Stock
The Preferred Stock may be issued from time to time by the Board of Directors as shares of one or more series. The description of shares of Preferred Stock, including any preferences, conversion and other rights, voting powers, restrictions, limitations as to dividends, qualifications, and terms and conditions of redemption shall be as set forth in resolutions adopted by the Board of Directors, and Articles of Amendment shall be filed as required by law with respect to issuance of such Preferred Stock, prior to the issuance of any shares of Preferred Stock.
The Board of Directors is expressly authorized, at any time, by adopting resolutions providing for the issuance of, dividing of such shares into series or providing for a change in the number of, shares of any Preferred Stock and, if and to the extent from time to time required by law, by filing Articles of Amendment which are effective without Shareholder action to increase or decrease the number of shares included in the Preferred Stock, but not below the number of shares then issued, and to set or change in any one or more respects the designations, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends, qualifications, or terms and conditions of redemption relating to the shares of Preferred Stock. Notwithstanding the foregoing, the Board of Directors shall not be authorized to change the rights of holders of the Common Stock of the Corporation to vote one vote per share on all matters submitted for shareholder action. The authority of the Board of Directors with respect to the Preferred Stock shall include, but not be limited to, setting or changing the following:
| 1. | the annual dividend rate, if any, on shares of Preferred Stock, the times of payment and the date from which dividends shall be accumulated, if dividends are to be cumulative; |
| 2. | whether the shares of Preferred Stock shall be redeemable and, if so, the redemption price and the terms and conditions of such redemption; |
| 3. | the obligation, if any, of the Corporation to redeem shares of Preferred Stock pursuant to a sinking fund; |
| 4. | whether shares of Preferred Stock shall be convertible into, or exchangeable for, shares of stock of any other class or classes and, if so, the terms and conditions of such conversion or exchange, including the price or prices or the rate or rates of conversion or exchange and the terms of adjustment, if any; |
| 5. | whether the shares of Preferred Stock shall have voting rights, in addition to the voting rights provided by law, and, if so, the extent of such voting rights; |
| 6. | the rights of the shares of Preferred Stock in the event of voluntary or involuntary liquidation, dissolution or winding-up of the Corporation; and |
| 7. | any other relative rights, powers, preferences, qualifications, limitations or restrictions thereof relating to the Preferred Stock. |
The shares of Preferred Stock of any one series shall be identical with each other in all respects except as to the dates from and after which dividends thereon shall cumulate, if cumulative.
B COMMON STOCK
Subject to all of the rights of the Preferred Stock as expressly provide herein, by law or by the Board of Directors pursuant to this Article I, the Common Stock of the Corporation shall possess all such rights and privileges as are afforded to capital stock by applicable law in the absence of any express grant of rights or privileges in the Corporation’s Articles of Incorporation, including, but not limited to, the following rights and privileges:
| (1) | dividends may be declared and paid or set apart for payment upon the Common Stock out of any assets or funds of the Corporation legally available for the payment of dividends; |
| (2) | the holders of Common Stock shall have the unlimited right to vote for the election of directors and on all other matters requiring stockholder action, each share being entitled to one vote; and |
| (3) | upon the voluntary or involuntary liquidation, dissolution or winding-up of the Corporation the net assets of the Corporation available for distribution shall be distributed pro rata to the holders of the Common Stock in accordance with their respective rights and interests. |
II.
The governing board of the corporation shall be styled as a “Board of Directors”, and any member of said Board shall be styled as a “Director.”
The number of members constituting the first Board of Directors of the corporation is three; and the name and the post office box or street address, either residence or business, of each of said members are as follows:
| NAME | ADDRESS |
|---|---|
Jie Han |
c/o Harbin Xinda Macromolecule Material Co., Ltd., No. 9 Qinling Road, Yingbin Road Centralized Industrial Park, Harbin Development Zone, Heilongjiang Province, P.R. China. |
| Qingwei Ma | c/o Harbin Xinda Macromolecule Material Co., Ltd., No. 9 Qinling Road, Yingbin Road Centralized Industrial Park, Harbin Development Zone, Heilongjiang Province, P.R. China. |
| Junjie Ma | c/o Harbin Xinda Macromolecule Material Co., Ltd., No. 9 Qinling Road, Yingbin Road Centralized Industrial Park, Harbin Development Zone, Heilongjiang Province, P.R. China. |
The number of directors of the corporation may be increased or decreased in the manner provided in the Bylaws of the corporation; provided, that the number of directors shall never be less than one. In the interim between elections of directors by stockholders entitled to vote, all vacancies, including vacancies caused by an increase in the number of directors and including vacancies resulting from the removal of directors by the stockholders entitled to vote which are not filled by said stockholders, may be filled by the remaining directors, though less than a quorum.
III.
The personal liability of the directors of the corporation is hereby eliminated to the fullest extent permitted by the General Corporation Law of the State of Nevada, as the same may be amended and supplemented.
IV.
The corporation shall, to the fullest extent permitted by the General Corporation Law of the State of Nevada, as the same may be amended and supplemented, indemnify any and all persons whom it shall have power to indemnify under said Law from and against any and all of the expenses, liabilities, or other matters referred to in or covered by said Law, and the indemnification provided for herein shall not be deemed exclusive of any other rights to which those indemnified may be entitled under any Bylaw, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators of such a person.
V.
The Board of Directors of the Corporation may, from time to time, and at its discretion, cause the Corporation to purchase its own shares and such shares may be reissued by the Corporation.
VI.
The corporation reserves the right to amend, alter, change, or repeal any provision contained in these Articles of Incorporation in the manner now or hereafter prescribed by statute, and all rights conferred upon stockholders herein are granted subject to this reservation.
VII.
The Board of directors is hereby authorized to take any and all actions without shareholder approval, which are allowed by the General Corporation Law of the state of Nevada.