As filed with the Securities and Exchange Commission
on June 1, 2021
Registration No. 333-185212
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 9
TO
FORM F-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PLASTEC TECHNOLOGIES, LTD.
(Exact name of registrant as specified in its constitutional
documents)
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Cayman Islands
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3089
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N/A
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(State or other jurisdiction of
incorporation or organization)
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(Primary Standard Industrial
Classification Code Number)
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(I.R.S. Employer
Identification Number)
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c/o Unit 01, 21/F
Aitken Vanson Centre
61 Hoi Yuen Road
Kwun Tong
Kowloon, Hong Kong
852-21917155
(Address, including zip code, and telephone number,
including area code, of registrant’s principal
executive offices)
Kin Sun Sze-To, Chief Executive Officer
Plastec Technologies, Ltd.
c/o Unit 01, 21/F
Aitken Vanson Centre
61 Hoi Yuen Road
Kwun Tong
Kowloon, Hong Kong
852-21917155
Graubard Miller
405 Lexington Avenue
New York, New York 10174
(212) 818-8800
(Name, address, including zip code, and telephone
number,
including area code, of agent for service)
Copies to:
David Alan Miller, Esq.
Jeffrey M. Gallant, Esq.
Graubard Miller
The Chrysler Building
405 Lexington Avenue
New York, New York 10174
(212) 818-8800
(212) 818-8881 — Facsimile
Approximate date of commencement of proposed
sale to the public: As soon as practicable after the effective date of this registration statement.
If any of the securities being registered on this
Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 check the following box.
x
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed
pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. ¨
If this Form is a post-effective amendment filed
pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. ¨
Pursuant to Rule 429 under the Securities Act
of 1933, the prospectus included in this Post-Effective Amendment No. 9 to Form F-1 (“Registration Statement”) is a combined
prospectus also relating to Registration Statement No. 333-162547 previously filed by the registrant on Form F-1 and declared effective
November 19, 2009. This Registration Statement also constitutes a Post-Effective Amendment to Form F-1 to such Registration Statement
No. 333-162547, and such post-effective amendment shall hereafter become effective concurrently with the effectiveness of this Registration
Statement in accordance with Section 8(c) of the Securities Act of 1933.
The registrant hereby amends this registration
statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which
specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities
Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
Explanatory Note
On November 30, 2012, the Registrant filed a registration
statement on Form F-1 (Registration No. 333-185212), which was subsequently declared effective by the Securities and Exchange Commission
on July 29, 2013 (“2013 Registration Statement”), registering the resale of an aggregate of 13,935,057 ordinary shares of
the Registrant and 1,181,122 warrants of the Registrant and the issuance upon exercise of warrants and unit purchase options of 5,280,372
ordinary shares of the Registrant and 289,625 warrants of the Registrant. The 2013 Registration Statement also constituted a Post-Effective
Amendment No. 1 to Form F-1 to the Registrant’s Registration Statement No. 333-162547 declared effective on November 19, 2009 (“2009
Registration Statement”).
This Post-Effective Amendment is being filed pursuant
to Section 10(a)(3) of the Securities Act of 1933, as amended, to update the 2013 Registration Statement and 2009 Registration Statement
to include the audited consolidated financial statements and the notes thereto included in the Registrant’s Annual Report on Form
20-F for the fiscal year ended December 31, 2020, filed with the SEC on May 14, 2021 (“2020 Annual Report”), and certain other
information in such Registration Statements.
No additional securities are being registered
under this Post-Effective Amendment. All applicable registration fees were paid at the time of the original filing of such 2013 Registration
Statement and 2009 Registration Statement, as applicable.
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The
information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities
and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
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SUBJECT TO COMPLETION,
DATED JUNE 1, 2021
PROSPECTUS
Plastec Technologies, Ltd.
12,093,935 Ordinary Shares (for Resale)
This prospectus relates to 12,093,935 ordinary
shares of Plastec Technologies, Ltd., a Cayman Islands exempted company, that may be sold from time to time by the Selling Securityholders
set forth in this prospectus under the heading “Selling Securityholders” beginning on page 41. This represents (i) 382,507
ordinary shares that were issued in connection with our initial public offering, or “IPO,” held or purchased in privately
negotiated transactions by certain of the Selling Securityholders and (ii) an aggregate of 11,711,428 ordinary shares that were issued
to the former shareholders of Plastec International Holdings Limited (formerly our direct wholly owned subsidiary until October 11, 2016),
or “Plastec,” in connection with our merger with Plastec.
We will not receive any proceeds from the sale
of the securities under this prospectus.
The securities are being registered to permit
the Selling Securityholders to sell the securities from time to time in the public market at prices determined by the prevailing market
prices or in privately negotiated transactions. Information regarding the Selling Securityholders, the amounts of ordinary shares that
may be sold by them and the times and manner in which they may offer and sell the ordinary shares under this prospectus is provided under
the sections titled “Selling Securityholders” and “Plan of Distribution,” respectively, in this
prospectus. We do not know when or in what amount the Selling Securityholders may offer the securities for sale. The Selling Securityholders
may sell any, all, or none of the securities offered by this prospectus.
The Selling Securityholders and intermediaries
through whom such securities are sold may be deemed “underwriters” within the meaning of the Securities Act of 1933, as amended,
with respect to the securities offered hereby, and any profits realized or commissions received may be deemed underwriting compensation.
We have agreed to indemnify the Selling Securityholders against certain liabilities, including liabilities under the Securities Act.
Our ordinary shares are quoted on the OTC Bulletin
Board under the symbol “PLTYF”. As of May 28, 2021, the closing sale price of our ordinary shares was $4.00 per share.
Investing in our securities involves risks.
See “Risk Factors” beginning on page 5 to read about factors you should consider before buying our securities.
Neither the Securities and Exchange Commission
nor any state or foreign securities commission has approved or disapproved of these securities or determined if this prospectus is truthful
or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is
, 2021.
PLASTEC TECHNOLOGIES, LTD
TABLE OF CONTENTS
This prospectus is not an offer to sell any
securities other than the shares offered hereby. This prospectus is not an offer to sell securities in any circumstances in which such
an offer is unlawful.
You should rely only on the information contained
in this prospectus. We have not authorized anyone to provide you with different information. We are not making an offer of these securities
in any state where the offer is not permitted. You should not assume that the information contained in this prospectus is accurate as
of any date other than the date on the front of this prospectus.
PROSPECTUS SUMMARY
This summary highlights key information contained
in this prospectus and is qualified in its entirety by the more detailed information and financial statements included elsewhere herein.
It may not contain all of the information that is important to you. You should read the entire prospectus, including “Risk Factors,”
our consolidated financial statements and the related notes, the information incorporated by reference in this prospectus, and the other
documents to which this prospectus refers, before making an investment decision.
Unless the context indicates otherwise:
· “we,”
“us,” “our company” and “our” refer to Plastec Technologies, Ltd., a Cayman Islands exempted company,
its predecessor entities and direct and indirect subsidiaries;
· “Plastec”
refers to Plastec International Holdings Limited, formerly our direct wholly owned subsidiary until October 11, 2016;
· “HK$”
or “Hong Kong dollar” refer to the lawful currency of the Hong Kong Special Administrative Region, People’s Republic
of China; if not otherwise indicated, all financial information presented in HK$/RMB may be converted to U.S.$ or $ using the exchange
rates of 7.8 HK$ and 6.5 RMB, respectively, for every 1 U.S.$ or $;
· “China”
or the “PRC” refer to the People’s Republic of China.
· “Renminbi”
or “RMB” refer to the lawful currency of China; and
· “U.S.$”
or “$” or “U.S. dollar” refer to the lawful currency of the United States of America
Overview
Until October 11, 2016, we were a vertically integrated
plastic manufacturing services provider providing comprehensive precision plastic manufacturing services through our former wholly owned
subsidiary, Plastec, from mold design and fabrication and plastic injection manufacturing to secondary-process finishing as well as parts
assembly to leading international OEMs, ODMs and OBMs of consumer electronics, electrical home appliances, telecommunication devices,
computer peripherals and precision plastic toys.
On October 11, 2016, we completed the divestment
of our shareholdings in Plastec as described below. Following consummation of the divestment transactions on October 11, 2016, we no longer
own Plastec with the result that our only operations have generally been to (i) complete the construction of a manufacturing plant in
Kai Ping, China which was disposed of and transferred to Plastec upon its establishment on April 20, 2018 as described below, (ii) collect
rental income from certain property we used to own and which was being leased to one of Plastec’s subsidiaries until November 2019
when the former subsidiary of ours that held the property was disposed of as described below, (iii) collect the payments upon Plastec
achieving the performance targets for the years ended December 31, 2016 through 2018 as described below; and (iv) to explore other investment
opportunities.
Corporate History and Developments
We are a Cayman Islands exempted company incorporated
under the Companies Act (As Revised) of the Cayman Islands (as the same may be supplemented or amended from time to time), or the “Companies
Act,” on March 27, 2008 as an exempted company with limited liability. We were originally incorporated under the name “GSME
Acquisition Partners I” for the purpose of acquiring, through a merger, share exchange, asset acquisition, plan of arrangement,
recapitalization, reorganization or similar business combination, an operating business, or control of such operating business through
contractual arrangements, that had its principal operations located in the PRC.
On November 25, 2009, we closed our initial
public offering, or “IPO,” of 3,600,000 units with each unit consisting of one ordinary share and one warrant, or
“public warrants,” each to purchase one ordinary share at an exercise price of $11.50 per share. The units were sold at
an offering price of $10.00 per unit, generating gross proceeds of $36,000,000. We also issued to the underwriters in the IPO an
aggregate of 360,000 unit purchase options, each to purchase a unit identical to the units sold in the IPO, at an exercise price of
$15.00 per unit, of which 70,375 unit purchase options were subsequently repurchased by us in April 2012. Simultaneously with the
consummation of the IPO, we consummated the private sale of 3,600,000 warrants, or “insider warrants,” at a price of
$0.50 per warrant, generating total proceeds of $1,800,000. In connection with the IPO, our initial shareholders placed a total of
1,200,000 ordinary shares, or “initial shares,” in escrow pursuant to an escrow agreement with Continental Stock
Transfer & Trust Company, as escrow agent.
From the consummation of our IPO until August
6, 2010, we were searching for a suitable target business to acquire. On August 6, 2010, we entered into an agreement and plan of reorganization,
or “Merger Agreement,” with Plastec, each of the former Plastec shareholders and our merger subsidiary, which provided, among
other things, that our wholly owned subsidiary would merge with and into Plastec, with Plastec surviving as a wholly owned subsidiary
of ours then. The Merger Agreement was subsequently amended in September 2010 and December 2010 but continued to provide for our wholly
owned subsidiary to merge with and into Plastec, with Plastec surviving as a wholly owned subsidiary of ours then. On December 10, 2010,
we held an extraordinary general meeting of our shareholders, at which our shareholders approved the merger and other related proposals.
On December 16, 2010, we closed the merger. At the closing, we issued to the former shareholders of Plastec an aggregate of 7,054,583
ordinary shares and agreed to issue the former Plastec shareholders an aggregate of 9,723,988 earnout shares additionally upon the achievement
by Plastec of certain net income targets. Also at the closing, 2,615,732 of the public shares sold in our IPO were converted into cash
and cancelled based on the election of the holders to exercise their conversion rights. In connection with the merger, our business then
became the business of Plastec and we changed our name to “Plastec Technologies, Ltd.” On April 30, 2011, we further amended
the Merger Agreement to remove certain earnout provisions contained within it and to issue an aggregate of 7,486,845 ordinary shares to
the former Plastec shareholders. We subsequently repurchased from one of the former Plastec shareholders an aggregate of 1,570,000 shares.
In connection with the merger with Plastec, we
amended the terms of the escrow agreement with the initial shareholders to include in escrow an aggregate of 2,418,878 of the insider
warrants and to provide additional restrictions on the release from escrow of all of the securities, including the requirement to raise
certain financing by December 16, 2011. On December 16, 2011, the escrow agreement was again amended and the date on which the required
financing was needed by was extended to March 16, 2012. No funds were ultimately raised and as a result, a total of 806,293 initial shares
and the entire 2,418,878 insider warrants held in escrow were automatically repurchased by us at an aggregate consideration of $0.01 and
cancelled.
We announced the establishment of a repurchase
program in December 2011, under which and as the program was subsequently extended and expanded, we were allowed to repurchase up to $5.0
million of our ordinary shares and public warrants in both open market and privately negotiated transactions at the discretion of our
management and as market conditions allowed, or “2011 Repurchase Program.” At the completion of the 2011 Repurchase Program
on September 25, 2013, we had repurchased 832,765 ordinary shares and 85,000 public warrants thereunder.
On September 25, 2013, we also announced a new
repurchase program, under which and as the program was subsequently extended and expanded, we are allowed to repurchase up to $5.0 million
of our units, ordinary shares and public warrants in both open market and privately negotiated transactions at the discretion of our management
and as market conditions allowed, or “2013 Repurchase Program.” The 2013 Repurchase Program (as extended) is currently valid
through September 25, 2021 and so far we have repurchased 586,010 ordinary shares and 547,600 public warrants thereunder.
On November 18, 2014, all issued and outstanding
public warrants, insider warrants and unit purchase options expired and were cancelled accordingly.
Completion of Sale of Plastec
On November 14, 2015, we entered into a Share
Transfer Agreement (the “Agreement”) with Shanghai Yongli Belting Co., Ltd. (“SYB”) and its wholly-owned subsidiary,
Shanghai Yongjing Investment Management Co., Ltd. (“SYIM”). Pursuant to the Agreement, SYIM was to purchase, through a wholly-owned
Hong Kong subsidiary, the entirety of our shareholding interests in Plastec for an aggregate purchase price of RMB 1,250,000,000 (or US$192,307,692),
in cash (the “Transfer Price”). Of the Transfer Price, RMB 875,000,000 (or US$134,615,385) was payable within 60 days after
the China Securities Regulatory Commission approved of the Issuance (as defined in the Agreement) and SYB’s receipt of the funds
raised through the Issuance, the latter of which was confirmed by SYB to have happened by July 29, 2016. Accordingly, payment of the initial
portion of the Transfer Price was made to us on September 21, 2016.
The remaining RMB 375,000,000 (or US$57,692,308)
of the Transfer Price (the “Remaining Amount”) was deposited into a bank account designated solely for the purpose of the
transaction, supervised and administered by SYB and us jointly, with tranches of which made payable to us upon Plastec achieving certain
performance targets for the years ended December 31, 2016, 2017 and 2018 (the “Performance Commitments”) as described below:
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Year ending December 31,
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Net Profit Target
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Payment Amount
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2016
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HK$161,211,000
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RMB 113,250,000 (US$17,423,077)
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2017
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HK$177,088,000
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RMB 124,380,000 (US$19,135,385)
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2018
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HK$195,408,000
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RMB 137,370,000 (US$21,133,846)
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On October 11, 2016, the parties consummated the
transactions contemplated by the Agreement after the fulfillment of certain other conditions, as described in the Agreement. As a result,
we no longer own Plastec.
Confirmations of Plastec’s Achievement
of Performance Targets for the years ended December 31, 2016, 2017 and 2018
By a letter dated May 10, 2017, SYB confirmed
and acknowledged to us that Plastec’s audited net profit (on a consolidated basis, after deducting non-recurring gains and losses)
for the year ended December 31, 2016 was HK$183,958,100, which is in excess of the performance target for the year ended December 31,
2016, set at HK$161,211,000 in the Agreement, by HK$22,747,100 or approximately 14.1%. Accordingly, we were paid a further sum of RMB
113,250,000 (or US$17,423,077) of the Remaining Amount on June 1, 2017 and in accordance with the terms of the Agreement.
By a letter dated March 28, 2018, SYB confirmed
and acknowledged to us that Plastec’s audited net profit (on a consolidated basis, after deducting non-recurring gains and losses)
for the year ended December 31, 2017 was HK$183,124,000, which was in excess of the performance target for the year ended December 31,
2017, set at HK$177,088,000 in the Agreement, by HK$6,036,000 or approximately 3.4%. Accordingly, we were paid a further sum of RMB 124,380,000
(or US$19,135,385) of the Remaining Amount on May 25, 2018 and in accordance with the terms of the Agreement.
By a letter dated April 26, 2019, SYB confirmed
and acknowledged to us that Plastec’s audited net profit (on a consolidated basis, after deducting non-recurring gains and losses)
for the year ended December 31, 2018 was HK$262,954,000, which was in excess of the performance target for the year ended December 31,
2018, set at HK$195,408,000 in the Agreement, by HK$67,546,000 or approximately 34.6%. Accordingly, we were paid a further sum of RMB
137,370,000 (or US$21,133,846) of the Remaining Amount on May 30, 2019 and in accordance with the terms of the Agreement.
Transfer of Manufacturing Plant in Kai Ping,
China
In accordance with the terms and spirit of the
Agreement, we caused Viewmount Developments Limited, a wholly owned subsidiary of ours (“Viewmount”), to enter into a Share
Transfer Agreement with Plastec (a wholly owned subsidiary of SYB since October 11, 2016) on March 30, 2018 (the “Manufacturing
Plant Transfer Agreement”), pursuant to the terms and conditions of which Viewmount was to transfer the ownership interests in certain
of its former subsidiaries holding the newly established manufacturing plant in Kai Ping, China through their PRC subsidiaries to Plastec
for a total consideration of approximately HK$70,000 (or US$8,974), representing the actual registered capital injected by Viewmount into
the relevant subsidiaries.
On April 20, 2018, the parties consummated the
transactions contemplated by the Manufacturing Plant Transfer Agreement. The parties also settled all account payables owed by the relevant
subsidiaries to Viewmount at the closing, totaling HK$258,910,000 (or US$33,193,590).
Disposal of Assets
On November 15, 2019, Viewmount entered into an
agreement (“Assets Disposal Agreement”) with an unaffiliated third party (the “Purchaser”), pursuant to which
Viewmount was to transfer the ownership interests in its then wholly-owned subsidiary holding the right to use certain parcels of land
in Shenzhen together with premises built thereon to the Purchaser for HK$47,964,570.65 (or US$6,149,304) in cash, net of all relevant
expenses, charges and taxes.
On November 20, 2019, the parties consummated
the transactions contemplated by the Assets Disposal Agreement; on which date Viewmount also received from the Purchaser HK$112,035,429.35
(or US$14,363,517) representing all amounts due from the former subsidiary disposed of.
Office Location
Our principal executive offices are located at
c/o Unit 01, 21/F, Aitken Vanson Centre, 61 Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong and our telephone number at that location is
852-21917155. Our registered office is PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands and our registered office provider
is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. Our agent for service of process
in the United States is Graubard Miller, our U.S. counsel, located at 405 Lexington Avenue, New York, New York 10174. We maintain a website
at http://www.plastec.com.hk that contains information about our company, but that information is not part of this prospectus.
Risks Affecting Our Company
In evaluating an investment in our securities,
you should carefully read this prospectus and especially consider the factors discussed in the section titled “Risk Factors”
commencing on page 5.
The Offering
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Shares offered by the Selling Securityholders
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12,093,935 shares
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Shares outstanding
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12,938,128 shares
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Trading Symbol
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Our shares are quoted on the OTC Bulletin Board under the symbol “PLTYF.”
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Use of proceeds
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We will not receive any proceeds from the sale of the securities under this prospectus.
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Risk factors
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Prospective investors should carefully consider the “Risk Factors” beginning on
page 5 before buying the ordinary shares offered hereby.
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RISK FACTORS
You should carefully consider the following risk
factors, before you decide to buy our securities. You should also consider the other information in this prospectus. This prospectus also
contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated
in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this
prospectus.
Risks Relating to Our Business
We have limited scope of operation after divestment of our ownership
interest in Plastec and, accordingly, you will have no or little basis on which to evaluate our prospect as a going concern.
Following divestment of our ownership interest
in Plastec, our only operations have generally been to (i) complete the construction of our manufacturing plant in Kai Ping, China which
was disposed of and transferred to Plastec upon its establishment on April 20, 2018 pursuant to the terms of the Manufacturing Plant Transfer
Agreement, (ii) collect rental income from certain property we used to own and which was being leased to one of Plastec’s subsidiaries
until November 2019 when the former subsidiary of ours that held the property was disposed of to an unaffiliated third party pursuant
to the terms of the Assets Disposal Agreement, (iii) collect the payments upon Plastec achieving the performance targets for the years
ended December 31, 2016 through 2018 as described in the Agreement; and (iv) explore other investment opportunities. As of the date hereof,
we have no plans, arrangements or understandings of what long term, if at all, operations in which we might be engaged or business objective
by which we might adopt and, accordingly, you will have no or little basis on which to evaluate our prospect as a going concern.
We do not have any sources of operating revenues.
Currently, we do not have any sources of operating
revenues. As a result, there would be substantial doubt regarding our ability to remain as a going concern from a long-term perspective.
We face uncertainties with respect to indirect transfers of equity
interests in PRC resident enterprises by their non-PRC holding companies.
On February 03, 2015, the PRC State Administration
of Taxation, or SAT, issued the Announcement of the State Administration of Taxation on Several Issues concerning the Enterprise Income
Tax Deriving from the Indirect Transfers of Properties among Non-Resident Enterprises, or “Announcement 7”, which was further
amended on December 1, 2017 and December 29, 2017. According to Announcement 7, where a non-resident enterprise indirectly transfers equities
and other property of a Chinese resident enterprise (Indirect Transfer) to evade its obligation of paying enterprise income tax by implementing
arrangements that are not for bona fide commercial purpose , such Indirect Transfer shall, in accordance with the PRC Enterprise Income
Tax Law, be re-identified and recognized as a direct transfer of equities and other property of the Chinese resident enterprise and shall
be taxed. The equities and other property of a Chinese resident enterprise mentioned above, or Chinese Taxable Property, refers to: (i)
the assets of an "establishment or place" situated in the PRC; (ii) real property situated in the PRC; and (iii) equity interest
in Chinese resident enterprises. The Announcement 7 has also elaborated how to determine that an Indirect Transfer has “a reasonable
commercial purpose” and specified the legal consequences for failing to withhold and pay tax. If the transfer of interests of our
wholly-owned subsidiary which holds the Chinese taxable property, i.e, the real property, be considered by the relevant tax authorities
to be devoid of “a reasonable commercial purpose” , Announcement 7 may be interpreted and the entity or individual that has
the direct liability for the relevant payment obligation to the equity transferor shall be identified as the withholding agent and obligated
to pay the tax. Pursuant to the Announcement of the SAT on Matters Concerning Withholding of Income Tax of Non-resident Enterprises at
Source (“Announcement 37”), issued by SAT on October 17, 2017 with effect from December 1, 2017, if the withholding agent
fails to withhold the tax that should have been withheld, the competent tax authority shall order the withholding agent to withhold the
tax payable, and pursue the liability of the withholding agent according to the law; where there is a need to pursue tax payments from
the taxpayer, it shall be handled by the competent tax authority at the place where the tax is accrued. Although we have agreed in the
Assets Disposal Agreement that the Purchaser shall bear all the relevant taxes and charges, the failure or delay of the payment of tax
by the Purchaser as the withholding agent may result in extra expenses of valuable resources for us to comply with Announcement 7, Announcement
37 or other related tax rules, which may have a material adverse effect on our business, results of operations and financial condition.
We are vulnerable to foreign currency exchange risk exposure.
Our foreign currency exchange risk arises from
the fact that our financial statements are expressed in Hong Kong dollars. Our balance sheet uses the relevant prevailing period end exchange
rate to convert all foreign currency amounts into Hong Kong dollars and our statement of comprehensive income records various payments
and receipts using the relevant prevailing exchange rate on the date of each transaction. The different exchange rates prevailing at different
times will give rise to foreign currency exchange exposures. In addition, the current peg of the exchange rate between the Hong Kong dollar
and the U.S. dollar may be de-pegged or subject to an increased band of fluctuation. Fluctuations in the Hong Kong dollar exchange rates
against other currencies may negatively impact our financial condition.
We intend to explore other currently unidentified investment
opportunities and, accordingly, we are unable to currently ascertain the merits or risks of any such investment opportunity.
We intend to explore other currently unidentified
investment opportunities to supplement our current minimal operations. Accordingly, there is no current basis for you to evaluate the
possible merits or risks of any investment opportunity we may ultimately pursue. Although our management will endeavor to evaluate the
risks inherent in any particular investment opportunity, we cannot assure you that we will properly ascertain or assess all of the significant
risk factors or not be exposed to potential risks which could have a material and adverse effect on ability to manage our business. Further,
as a result of our current minimal operations, limited resources for want of operating revenues and the need to maintain adequate control
of our costs and expenses, we may not be able to attract, train, motivate and recruit suitably qualified personnel to explore or effect
any investment opportunity thereby making it difficult for you to evaluate our long term business, financial performance and prospects.
If we do not succeed in launching new business upon any investment opportunity to supplement our current minimal operations, our future
results of operations and growth prospects may be materially and adversely affected.
Our search for other unidentified investment opportunities may
be materially adversely affected by the coronavirus (COVID-19) pandemic or other adverse geopolitical events .
The COVID-19 pandemic has adversely
affected, and other events (such as geopolitical tensions, terrorist attacks, natural disasters or a significant outbreak of other
infectious diseases) could adversely affect the economies and financial markets worldwide, and the business of any potential company
with which we look to do potential business in the future. Furthermore, concerns relating to COVID-19 could continue to restrict
travel and limit the ability to have meetings with potential companies. The extent to which COVID-19 impacts our operations will
depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge
concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed
by COVID-19 or other events (such as geopolitical tensions, terrorist attacks, natural disasters or a significant outbreak of other
infectious diseases) continue for an extensive period of time, our operations may be materially adversely affected.
In addition, our ability to consummate a transaction
may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events (such as geopolitical
tensions, terrorist attacks, natural disasters or a significant outbreak of other infectious diseases), including as a result of increased
market volatility, a decline in real activity, decreased market liquidity in third-party financing being unavailable on terms acceptable
to us or at all.
Risks Related to Us and Our Securities
Because we are incorporated under the laws of the Cayman Islands,
you may face difficulties in protecting your interests, and your ability to protect your rights through the U.S. Federal courts may be
limited.
We are a company incorporated under the laws of
the Cayman Islands, and substantially all of our assets are located outside the United States. In addition, our directors and officers
are nationals or residents of jurisdictions other than the United States and all or a substantial portion of their assets are located
outside the United States. As a result, it may be difficult for investors to effect service of process within the United States upon our
directors or executive officers, or enforce judgments obtained in the United States courts against our directors or officers.
Our corporate affairs are governed by our second
amended and restated memorandum and articles of association, the Companies Act and the common law of the Cayman Islands. The rights of
shareholders to take action against the directors, actions by minority shareholders and the fiduciary responsibilities of our directors
to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands
is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from English common law, the decisions
of whose courts are of persuasive authority, but are not binding on a court in the Cayman Islands. The rights of our shareholders and
the fiduciary responsibilities of our directors under Cayman Islands law are not as clearly established as they would be under statutes
or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities
laws as compared to the United States, and certain states, such as Delaware, have more fully developed and judicially interpreted bodies
of corporate law. In addition, Cayman Islands companies may not have standing to initiate a shareholders derivative action in a Federal
court of the United States.
There is also uncertainty as to whether the courts
of the Cayman Islands would:
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recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States; or
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entertain original actions brought in each respective jurisdiction against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States.
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The uncertainty relates to whether a judgment
obtained from the U.S. courts under civil liability provisions of U.S. securities laws will be determined by the courts of the Cayman
Islands as penal or punitive in nature. If such a determination is made, the courts of the Cayman Islands will not recognize or enforce
the judgment against a Cayman Islands company, such as our company. As the courts of the Cayman Islands have yet to rule on making such
a determination in relation to judgments obtained from U.S. courts under civil liability provisions of U.S. securities laws, it is uncertain
whether such judgments would be enforceable in the Cayman Islands. The courts of the Cayman Islands would recognize as a valid judgment
a final and conclusive judgment in personam obtained in the federal or state courts in the United States under which a sum of money is
payable (other than a sum of money payable in respect of multiple damages, taxes or other charges of a like nature or in respect
of a fine or other penalty) and would give a judgment based thereon provided that: (a) such courts had proper jurisdiction over the parties
subject to such judgment; (b) such courts did not contravene the rules of natural justice of the Cayman Islands; (c) such judgment was
not obtained by fraud; (d) the enforcement of the judgment would not be contrary to the public policy of the Cayman Islands; (e) no new
admissible evidence relevant to the action is submitted prior to the rendering of the judgment by the courts of the Cayman Islands; and
(f) there is due compliance with the correct procedures under the laws of the Cayman Islands.
As a result of all of the above, shareholders
may have more difficulty in protecting their interests in the face of actions taken by management, members of the board of directors or
controlling shareholders than they would as public shareholders of a United States company.
We may be treated as a passive foreign investment company (“PFIC”),
which could result in adverse U.S. federal income tax consequences to U.S. investors.
In general, we would be treated as a PFIC for
any taxable year in which either (1) at least 75% of our gross income (looking through certain 25% or more-owned corporate subsidiaries)
is passive income or (2) at least 50% of the average value of our assets (looking through certain 25% or more-owned corporate subsidiaries)
is attributable to assets that produce, or are held for the production of, passive income. Passive income generally includes, without
limitation, dividends, interest, rents, royalties, and gains from the disposition of passive assets. If we are determined to be a PFIC
for any taxable year (or portion thereof) that is included in the holding period of a U.S. holder of our ordinary shares, the U.S. holder
may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements. As a result of
the disposition of all of our shareholdings in Plastec in October 2016 and based on the expected composition (and estimated values) of
the assets and the nature of the income of us and our subsidiaries and our current plans of operation, we are expected to be treated as
a PFIC. However, our actual PFIC status for any taxable year will not be determinable until after the end of such taxable year. Accordingly,
there can be no assurance with respect to our status as a PFIC for our current taxable year or any subsequent taxable year. We urge U.S.
investors to consult their own tax advisors regarding the possible application of the PFIC rules.
A national securities exchange may not list our securities, or
if a national securities exchange does grant such listing, it could thereafter delist our securities, which could limit investors’
ability to make transactions in our securities and subject us to additional trading restrictions.
We may consider applying to have our
ordinary shares listed on a national securities exchange if circumstances permit. However, there is no assurance that such an
application will be made or that we will be successful in our efforts to have our securities listed. If a national securities
exchange does not list our securities or if it grants such listing and thereafter delists our securities, we could face significant
material adverse consequences, including:
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A limited availability of market quotations for our securities;
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A reduced liquidity with respect to our securities;
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A determination that our ordinary shares are “penny stocks” which will require brokers trading in our shares to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our shares;
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A limited amount of news and analyst coverage for us; and
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A decreased ability to issue additional securities or obtain additional financing in the future.
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If our ordinary shares become subject to the SEC’s penny
stock rules, broker-dealers may experience difficulty in completing customer transactions and trading activity in our securities may be
adversely affected.
If at any time we have net tangible assets of
$5,000,000 or less and our ordinary shares have a market price per share of less than $5.00, transactions in our ordinary shares may be
subject to the “penny stock” rules promulgated under the Securities Exchange Act of 1934. Under these rules, broker-dealers
who recommend such securities to persons other than institutional accredited investors must:
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make a special written suitability determination for the purchaser;
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receive the purchaser’s written agreement to the transaction prior to sale;
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provide the purchaser with risk disclosure documents which identify certain risks associated with investing in “penny stocks” and which describe the market for these “penny stocks” as well as a purchaser’s legal remedies; and
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obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure document before a transaction in a “penny stock” can be completed.
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If our ordinary shares become subject to these
rules, broker-dealers may find it difficult to effectuate customer transactions and trading activity in our securities may be adversely
affected. As a result, the market price of our securities may be depressed, and you may find it more difficult to sell our securities.
If we fail to maintain an effective system of internal controls,
we may be unable to accurately report our financial results or prevent fraud, and investor confidence and the market price of our ordinary
shares may be adversely affected.
Our reporting obligations as a public company
will place a significant strain on our management, operational and financial resources and systems for the foreseeable future. We are
a relatively young company with limited accounting personnel and other resources with which to address our internal controls and procedures.
In addition, we must implement financial and disclosure control procedures and corporate governance practices that enable us to comply,
on a stand-alone basis, with the Sarbanes-Oxley Act of 2002 and related Securities and Exchange Commission, or the SEC, rules. For example,
we will need to further develop accounting and financial capabilities, including the establishment of an internal audit function and development
of documentation related to internal control policies and procedures. Failure to quickly establish the necessary controls and procedures
would make it difficult to comply with SEC rules and regulations with respect to internal control and financial reporting. We will need
to take further actions to continue to improve our internal controls. If we are unable to implement solutions to any weaknesses in our
existing internal controls and procedures, or if we fail to maintain an effective system of internal controls in the future, we may be
unable to accurately report our financial results or prevent fraud and investor confidence and the market price of our ordinary shares
may be adversely impacted.
Section 404 of the Sarbanes-Oxley Act of 2002
requires us to perform an evaluation of our internal controls over financial reporting and file annual management assessments of their
effectiveness with the SEC. The management assessment to be filed is required to include a certification of our internal controls by our
chief executive officer and chief financial officer. In addition to satisfying requirements of Section 404, we may also make improvements
to our management information system to computerize certain manual controls, establish a comprehensive procedures manual for US GAAP financial
reporting, and increase the headcount in the accounting and internal audit functions with professional qualifications and experience in
accounting, financial reporting and auditing under US GAAP.
If we become an “accelerated filer”
or a “large accelerated filer” as those terms are defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”), our auditors will be required to attest to our evaluation of internal controls over financial reporting.
Unless we successfully design and implement changes to our internal controls and management systems, or if we fail to maintain the adequacy
of these controls as such standards are modified or amended from time to time, we may not be able to comply with Section 404 of the Sarbanes-Oxley
Act of 2002. As a result, our auditors may be unable to attest to the effectiveness of our internal controls over financial reporting.
This could subject us to regulatory scrutiny and result in a loss of public confidence in our management, which could, among other things,
adversely affect the price of our ordinary shares and our ability to raise additional capital.
Our executive officers have limited experience managing a public
company subject to United States securities laws and preparing financial statements in U.S. GAAP.
Our chief executive officer and chief financial
officer, who are primarily responsible for the disclosure contained in our annual reports and financial statements filed with the SEC,
have limited experience as officers of a public company subject to United States securities laws since we are the first and only United
States public company they have managed. As a result, our executive officers chiefly in charge of our disclosure have limited experience
with United States securities laws and U.S. GAAP. Accordingly, they may not have sufficient knowledge to properly interpret the extensive
SEC financial reporting and disclosure rules or all relevant U.S. GAAP accounting standards and guidance, and may have to rely on third
party advisers for compliance. If we are unable to engage knowledgeable third party advisers or our executive officers improperly interpret
SEC financial reporting and disclosure rules and U.S. GAAP accounting standards and guidance, investor confidence and the market price
of our securities may be adversely impacted.
One of our directors and officers controls a significant amount
of our ordinary shares and his interests may not align with the interests of our other shareholders.
Kin Sun Sze-To, our Chairman of the Board of Directors,
currently has beneficial ownership of approximately 78.3% of our issued and outstanding ordinary shares. This significant concentration
of share ownership may adversely affect or reduce the trading price of our ordinary shares because investors often perceive a disadvantage
in owning shares in a company with one or several controlling shareholders. Furthermore, our directors and officers, as a group, have
the ability to significantly influence or control the outcome of all matters requiring shareholders’ approvals, including electing
directors and approving mergers or other business combination transactions. These actions may be taken even if they are opposed by our
other shareholders. This concentration of ownership and voting power may also discourage, delay or prevent a change in control of our
company, which could deprive our shareholders of an opportunity to receive a premium for their shares as part of a sale of our company.
Our executive officers have become affiliated with SYB following
divestment of our shareholdings in Plastec and have thereafter allocated their time in pursuit of businesses of Plastec thereby causing
conflicts of interest in their determination as to how much time to devote to our affairs. This conflict of interest could have a negative
impact on our ability to remain as a going concern.
Our executive officers are not required to commit
their full time to our affairs, which could create a conflict of interest when allocating their time between our operations (albeit limited
currently) and their commitments vis-à-vis Plastec as part and parcel of our divestment of our shareholdings in Plastec to SYB.
None of our executive officers is obligated to devote any specific number of hours to our affairs. If their other business affairs vis-à-vis
Plastec require them to devote more substantial amounts of time to such affairs, it could limit their ability to devote time to our affairs
and could have a negative impact on our ability to remain as a going concern from a long-term perspective. Additionally, our executive
officers may become aware of business opportunities which may be appropriate for presentation to us and SYB/Plastec to which they owe
fiduciary duties. Accordingly, they may have conflicts of interest in determining to which entity a particular business opportunity should
be presented. As a result, a potential business opportunity may preferentially be presented to SYB/Plastec ahead, or instead, of to us
and we may not be afforded a realistic chance of exploring any business opportunity.
Our ability to consummate any investment opportunity will be
dependent on the efforts of our key personnel.
Our ability to successfully effect any investment
opportunity will be dependent upon the efforts of our key personnel. As indicated above, our executive officers are not required to commit
their full time efforts to our affairs. Accordingly, there is no assurance that they will spend sufficient time to our locating any potential
investment opportunity. Further, the unexpected loss of our executives could have a detrimental effect on us and our ability to realize
any potential investment opportunity.
Because of our limited resources, other companies may have a
competitive advantage in locating and consummating investment opportunities.
We expect to encounter competition from entities
having a business objective similar to ours, including venture capital funds, leveraged buyout funds and operating businesses competing
for investment opportunities. Many of these entities are well established and have extensive experience in identifying and effecting investment
opportunities directly or through affiliates. Many of these competitors possess greater technical, human and other resources than we do
and our financial resources will be relatively limited when contrasted with those of many of these competitors. The foregoing may place
us at a competitive disadvantage in successfully locating and consummating any investment opportunity.
The market price for our shares may be volatile.
The market price for our shares is likely to be
highly volatile and subject to wide fluctuations in response to factors including the following:
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actual or anticipated fluctuations in our operating results and changes or revisions of our expected results;
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changes in financial estimates by securities research analysts;
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fluctuations of exchange rates between the RMB, the Hong Kong dollar and the U.S. dollar.
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Volatility in the price of our shares may result in shareholder
litigation that could in turn result in substantial costs and a diversion of our management’s attention and resources.
The financial markets in the United States and
other countries have experienced significant price and volume fluctuations, and market prices have been and continue to be extremely volatile.
Volatility in the price of our shares may be caused by factors outside of our control and may be unrelated or disproportionate to our
results of operations. In the past, following periods of volatility in the market price of a public company’s securities, shareholders
have frequently instituted securities class action litigation against such company. Litigation of this kind could result in substantial
costs and a diversion of our management’s attention and resources.
If we do not pay dividends on our shares, shareholders may be
forced to benefit from an investment in our shares only if those shares appreciate in value.
The payment of dividends in the future, of which
there can be no assurance, will be entirely within the sole discretion of our board of directors and will largely be contingent upon our
cash flow needs for future development; all of which may be adversely affected by one or more of the factors described herein. Accordingly,
we may not declare or pay additional dividends in the future. Even if the board of directors decides to pay dividends, the form, frequency
and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual
restrictions and other factors that the board may deem relevant. If we determine not to pay any dividends in the future, realization of
a gain on shareholders’ investments will depend on the appreciation of the price of our shares, and there is no guarantee that our
shares will appreciate in value.
We may need additional capital, and the sale of additional shares
or equity or debt securities could result in additional dilution to our shareholders.
We believe that our current cash and cash equivalents
will be sufficient to meet our anticipated cash needs at least for the next twelve months. We may, however, require additional cash resources
due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue. If
these resources are insufficient to satisfy our cash requirements, we may seek to sell additional equity or debt securities or obtain
one or more additional credit facilities. The sale of additional equity securities could result in additional dilution to our shareholders.
The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants
that would restrict our operations. It is uncertain whether financing will be available in amounts or on terms acceptable to us, if at
all.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
The statements contained in this prospectus that
are not purely historical are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding
our or our management’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements
that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions,
are forward-looking statements. The words “anticipates,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,”
“potential,” “predicts,” “project,” “should,” “would” and similar expressions
may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The following factors, among others, could cause
actual results to materially differ from those set forth in the forward-looking statements:
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continued compliance with government regulations;
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changing legislation or regulatory environments;
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requirements or changes affecting the businesses in which we are engaged;
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changing interpretations of accounting principles;
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general economic conditions; and
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other relevant risks detailed in our filings with the Securities and Exchange Commission.
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The forward-looking statements contained in this
prospectus are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can
be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve
a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance
to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include,
but are not limited to, those factors described in this prospectus in the section titled “Risk Factors.” Should one
or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material
respects from those projected in these forward-looking statements. Except to the extent required by law, we undertake no obligation to
update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be
required under applicable securities laws and/or if and when management knows or has a reasonable basis on which to conclude that previously
disclosed projections are no longer reasonably attainable.
PER SHARE MARKET INFORMATION
Our ordinary shares are quoted on the OTC Bulletin
Board under the symbols “PLTYF”. We may consider applying to have our ordinary shares listed on a national securities exchange,
if circumstances permit. We can provide no assurance, however, that we will so apply, that any such exchange will approve our application,
if made, or that our ordinary shares will ever become so listed.
Approximate Number of Holders of Securities
As of May 11, 2021, there were 18 shareholders
of record holding a total of 12,938,128 of our ordinary shares.
CAPITALIZATION
The following table sets forth our capitalization,
as of April 30, 2021, on an actual basis:
You should read this table in conjunction with
“Management Discussion and Analysis of Financial Condition and Results of Operations”, our consolidated financial statements
and related notes included elsewhere in this prospectus. The information presented in the capitalization table below is unaudited.
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As of April 30, 2021
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Actual
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(in HK$’000, except per share data)
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(unaudited)
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Bank borrowings
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-
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Equity:
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Preferred shares (US$0.001 par value; 1,000,000 share authorized, none issued and outstanding)
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-
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Ordinary shares (US$0.001 par value; 100,000,000 shares authorized, 12,938,128 shares issued and outstanding as of April 30, 2021)
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101
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Additional paid-in capital
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26,049
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Accumulated other comprehensive income
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(30
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)
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Retained earnings
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146,835
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Total shareholders’ equity
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172,955
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Total capitalization
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172,955
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USE OF PROCEEDS
We will not receive any proceeds from the sale
of the securities under this prospectus.
DIVIDEND POLICY
The payment of dividends in the future, of which
there can be no assurance, will be entirely within the sole discretion of our board of directors and will largely be contingent upon
our cash flow needs for future development; all of which may be adversely affected by one or more of the factors discussed in “Risk
Factors.” Accordingly, we may not declare or pay any additional dividends in the future. Even if the board of directors decides
to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus,
general financial condition, contractual restrictions and other factors that the board may deem relevant.
MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Overview
We used to be a vertically integrated plastic
manufacturing services provider providing comprehensive precision plastic manufacturing services (through our former wholly owned subsidiary,
Plastec) from mold design and fabrication and plastic injection manufacturing to secondary-process finishing as well as parts assembly
to leading international OEMs, ODMs and OBMs of consumer electronics, electrical home appliances, telecommunication devices, computer
peripherals and precision plastic toys.
Following consummation of the divestment transactions
on October 11, 2016 and pursuant to the terms of the Agreement more particularly described in the “Corporate History and Developments”
section of this prospectus, we no longer own Plastec with the result that our only operations have generally been to (i) complete the
construction of our manufacturing plant in Kai Ping, China which was disposed of and transferred to Plastec upon its establishment on
April 20, 2018 pursuant to the terms of the Manufacturing Plant Transfer Agreement (ii) collect rental income from certain property we
used to own and which was being leased to one of Plastec’s subsidiaries until November 2019 when the former subsidiary of ours that
held the property was disposed of to an unaffiliated third party pursuant to the terms of the Assets Disposal Agreement, (iii) collect
the payments upon Plastec achieving the performance targets for the years ended December 31, 2016 through 2018 as described in the Agreement;
and (iv) to explore other investment opportunities.
To date, we have not identified any investment
opportunities, the pursuit of which we believe would be advantageous to us to supplement our current minimal operations. As a result,
we cannot assure you that we will be able to locate any such investment opportunity in the future and accordingly there is no current
basis for you to evaluate the possible merits or risks of any investment opportunity we may ultimately pursue.
Although our management will endeavor to evaluate
the risks inherent in any particular investment opportunity, we cannot assure you that we will properly ascertain or assess all of the
significant risk factors or not be exposed to potential risks which could have a material and adverse effect on ability to manage our
business. Further, as a result of our current minimal operations, limited resources for want of operating revenues and the need to maintain
adequate control of our costs and expenses, we may not be able to attract, train, motivate and recruit suitably qualified personnel to
explore or effect any investment opportunity thereby making it difficult for you to evaluate our long term business, financial performance
and prospects. If we do not succeed in launching any new business upon an investment opportunity to supplement our current minimal operations,
our future results of operations and growth prospects may be materially and adversely affected arising from a lack of business diversification.
Our ability to successfully effect any investment
opportunity will also be dependent upon the efforts of our key personnel. However, our executive officers are not required to, and it
is unlikely that they will, commit and devote their full time efforts to our affairs. Accordingly, there is no assurance that they will
spend sufficient time to our locating any potential investment opportunity. Further, the unexpected loss of our executives could have
a detrimental effect on us and our ability to realize any potential investment opportunity.
Further, we expect to encounter competition from
entities having a business objective similar to ours, including venture capital funds, leveraged buyout funds and operating businesses
competing for investment opportunities. Many of these entities are well established and have extensive experience in identifying and effecting
investment opportunities directly or through affiliates. Many of these competitors possess greater technical, human and other resources
than we do and our financial resources will be relatively limited when contrasted with those of many of these competitors. The foregoing
may place us at a competitive disadvantage in successfully locating and consummating any investment opportunity.
Critical Accounting Policies and Estimates
We prepare our consolidated financial statements
in accordance with U.S. GAAP, which requires us to make judgments, estimates and assumptions that affect:
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the reported amounts of its assets and liabilities;
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the disclosure of its contingent assets and liabilities at the end of each reporting period; and
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the reported amounts of revenues and expenses during each reporting period.
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We continually evaluate these estimates
based on our own experience, knowledge and assessment of current business and other conditions, our expectations regarding the
future based on available information and reasonable assumptions, which together form our basis for making judgments about matters
that are not readily apparent from other sources. Some of our accounting policies require a higher degree of judgment than others in
their application. When reading our consolidated financial statements, you should consider:
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our selection of critical accounting policies;
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the judgment and other uncertainties affecting the application of such policies; and
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the sensitivity of reported results to changes in conditions and assumptions.
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We believe the following accounting policies involve
the most significant judgments and estimates used in the preparation of our financial statements:
Property, plant and equipment
Property, plant and equipment are stated at acquisition
cost less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable costs of bringing
the asset to its working condition and location for its intended use.
Depreciation is provided to write off the cost
less their residual values over their estimated useful lives, using the straight-line method, at the following rates per annum:
The assets’ estimated residual values, depreciation
methods and estimated useful lives are reviewed, and adjusted if appropriate, at each reporting date.
The gain or loss arising on retirement or disposal
is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the consolidated
statement of income.
All other costs, such as repairs and maintenance
are charged to the operations during the financial period in which they are incurred.
Impairment of long-lived assets
We periodically evaluates the carrying value of
long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived asset is
considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying
value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived
asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved.
Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for the cost
to dispose.
Discontinued Operations
A disposal of a component of an entity or a group
of components of an entity shall be reported in discontinued operations if the disposal represents a strategic shift that has (or will
have) a major effect on an entity’s operations. Classification as a discontinued operation occurs upon disposal or when the operation
meets the criteria to be classified as held for sale, if earlier. Where an operation is classified as discontinued, a single amount is
presented on the face of the consolidated statements of operations and comprehensive income. The amount of total current assets, total
non-current assets, total current liabilities and total non-current liabilities are presented separately on the consolidated balance sheets.
Revenues
We generated revenues from our continuing operations
in fiscal years ended December 31, 2018, 2019 and 2020 as follows, which were presented as other income in our audited financial statements:
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Fiscal Years Ended December 31,
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2018
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2019
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2020
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(HK$'000)
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Amount
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% of Total
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Amount
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% of Total
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Amount
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% of Total
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Other income
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9,954
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100.0
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%
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0
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0.0
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%
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7
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|
100.0
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%
|
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|
9,954
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|
100.0
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%
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0
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0.0
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%
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7
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100.0
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%
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Other income
Prior to November 2019, we had rental
revenues derived from certain parcels of land (together with industrial building and premises for dormitory purpose built thereon)
located in Furong Industrial District, Furongmei Area, Shajing Street, Xinqiao Village, Bao’an District, Shenzhen City,
Guangdong Province of the PRC, which were being leased to one of Plastec’s subsidiaries under certain tenancy agreements more
particularly described in the section titled “Properties” in Item 4.B of our Annual Report on Form 20-F for the
year ended December 31, 2018 filed on May 15, 2019.
On November 20, 2019, we
completed the disposal of our former subsidiary holding the right to use the aforesaid parcels of land pursuant to the terms of the Assets
Disposal Agreement. After the retrospective adjustments for the deconsolidation of this disposal, which has been classified as discontinued
operations, we recorded no operating income for our continuing operations for the years ended December 31, 2018, 2019 and 2020 save for
exchange gain of approximately HK$10.0 million for fiscal year ended December 31, 2018, and reversals of over-provided accrued expenses
of approximately HK$7,000 for fiscal year ended December 31, 2020 as well as a one-time gain of approximately HK$29,000 for the fiscal
year ended December 31, 2020 arising from disposal of our ownership interests in our then wholly-owned dormant subsidiary with a negative
net worth of approximately HK$1,600 to an unaffiliated third-party purchaser for HK$27,000 on June 29, 2020.
Operating Costs
Our operating expenses arising from our continuing
operations in fiscal years ended December 31, 2018, 2019 and 2020 consisted of the following:
|
|
|
Fiscal Years Ended December 31,
|
|
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(HK$'000)
|
|
|
|
|
Amount
|
|
|
% of Total
|
|
|
Amount
|
|
|
% of Total
|
|
|
Amount
|
|
|
% of Total
|
|
|
Exchange loss
|
|
|
-
|
|
|
|
0.0
|
%
|
|
|
11,476
|
|
|
|
76.1
|
%
|
|
|
-
|
|
|
|
0.0
|
%
|
|
Selling, general and administrative
expenses
|
|
|
4,554
|
|
|
|
100.0
|
%
|
|
|
3,607
|
|
|
|
23.9
|
%
|
|
|
3,882
|
|
|
|
100.0
|
%
|
|
|
|
|
4,554
|
|
|
|
100.0
|
%
|
|
|
15,083
|
|
|
|
100.0
|
%
|
|
|
3,882
|
|
|
|
100.0
|
%
|
Selling, General and Administrative
Expenses
Our selling, general and administrative expenses
consisted primarily of legal and professional expenses, directors’ compensation, insurances, transportation, motor vehicles related
expenses and exchange losses.
Income Tax
Cayman Islands. We are incorporated in
the Cayman Islands. The government of the Cayman Islands will not, under existing legislation, impose any income tax upon the Company
or its shareholders.
British Virgin Islands. Our subsidiaries
which are incorporated in the British Virgin Islands are exempted from income tax in the British Virgin Islands on their foreign-derived
income.
Hong Kong. Our remaining Hong Kong subsidiary
is subject to income tax on its profits in Hong Kong at the prevailing corporate tax rates of 8.25% on assessable profits up to HK$2 million
and 16.5% on any part of assessable profits over HK$2 million. For the years ended December 31, 2018, 2019 and 2020, however, none of
our Hong Kong subsidiaries (then and now) recorded any Hong Kong profits tax on the basis that they did not have any assessable profits
arising in or derived from Hong Kong.
Review of Results of Continuing Operations
The following table sets forth a summary of our
consolidated results of continuing operations for the periods indicated. This information should be read together with our consolidated
financial statements and notes thereto contained elsewhere herein.
|
|
|
Fiscal Year ended December 31,
|
|
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
|
|
HK$
|
|
|
HK$
|
|
|
HK$
|
|
|
|
|
|
|
|
(HK$'000)
|
|
|
|
|
|
Revenues
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income/(expenses), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on disposal of a subsidiary
|
|
|
-
|
|
|
|
-
|
|
|
|
29
|
|
|
Selling, general and administrative expenses
|
|
|
(4,554
|
)
|
|
|
(15,083
|
)
|
|
|
(3,882
|
)
|
|
Other income
|
|
|
9,954
|
|
|
|
-
|
|
|
|
7
|
|
|
Total operating income/(expenses), net
|
|
|
5,400
|
|
|
|
(15,083
|
)
|
|
|
(3,846
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) from operations
|
|
|
5,400
|
|
|
|
(15,083
|
)
|
|
|
(3,846
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
3,082
|
|
|
|
3,297
|
|
|
|
1,118
|
|
|
Income/(loss) before income tax expense
|
|
|
8,482
|
|
|
|
(11,786
|
)
|
|
|
(2,728
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense from continuing operations
|
|
|
(2,435
|
)
|
|
|
(729
|
)
|
|
|
(779
|
)
|
|
Net income/(loss) from continuing operations attributable to the Company’s shareholders
|
|
|
6,047
|
|
|
|
(12,515
|
)
|
|
|
(3,507
|
)
|
For the year ended December 31, 2020 compared to year ended December
31, 2019
Other income. Other than recording
a one-time nominal other income arising from reversals of over-provided accrued expenses of approximately HK$7,000 for the fiscal year
ended December 31, 2020, we recorded no operating income for our continuing operations for the fiscal years ended December 31, 2019 and
2020.
Selling, general and administrative expenses.
Our selling, general and administrative expenses for the year ended December 31, 2020 increased by approximately HK$0.3 million or 7.6%
to approximately HK$3.9 million from approximately HK$3.6 million in the year ended December 31, 2019 mainly attributable to slightly
increased legal and professional fees for the year ended December 31, 2020.
Income/(loss) from operations. Our loss
from operations for the year ended December 31, 2020 was approximately HK$3.8 million, compared to a loss of approximately HK$15.1 million
for the year ended December 31, 2019. This was mainly resulted from an exchange loss of approximately HK$11.5 million for the year ended
December 31, 2019.
Income tax expenses. Our income tax expenses
for the year ended December 31, 2020 increased by approximately HK$0.05 million to HK$0.78 million from HK$0.73 million in the year ended
December 31, 2019.
Net income/(loss). Our net loss for the
year ended December 31, 2020 was approximately HK$3.5 million, compared to net loss of approximately HK$12.5 million for the year ended
December 31, 2019.
For the year ended December 31, 2019 compared to year ended December
31, 2018
Other income. After the retrospective adjustments
for the deconsolidation of the disposed business lines arising from the disposal of our former subsidiary that generated rental revenues
in November 2019, which has been classified as discontinued operations, we recorded no operating income for our continuing operations
for the years ended December 31, 2018 and 2019 save for an exchange gain of approximately HK$10.0 million for the fiscal year ended December
31, 2018.
Selling, general and administrative expenses.
Our selling, general and administrative expenses for the year ended December 31, 2019 decreased by approximately HK$0.9 million or 20.8%
to HK$3.6 million from approximately HK$4.6 million in the year ended December 31, 2018 mainly attributable to a progressive reduction
in expenses incurred in maintaining daily operations. For the year ended December 31, 2019, we recorded an exchange loss for approximately
HK$11.5 million.
Income/(loss) from operations. Our loss
from operations for the year ended December 31, 2019 was approximately HK$15.1 million, in contrast to a gain of approximately HK$5.4
million for the year ended December 31, 2018. The loss was mainly attributable to an exchange loss of approximately HK$11.5 million for
the year ended December 31, 2019, as compared with an exchange gain of approximately HK$10.0 million for the year ended December 31, 2018.
Income tax expenses. Our income tax expenses
for the year ended December 31, 2019 decreased by approximately HK$1.7 million to HK$0.7 million from HK$2.4 million in the year ended
December 31, 2018.
Net income/(loss). Our net loss for the
year ended December 31, 2019 was approximately HK$12.5 million, compared to net income of approximately HK$6.0 million for the year ended
December 31, 2018.
Liquidity and Capital Resources
Our operations have been generally funded through
a combination of net cash generated from its operations and equity capital. We believe that we have adequate working capital to finance
our operations.
Summary of Cash Flows
|
|
|
Year Ended December 31,
|
|
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(HK$’000)
|
|
|
Net Cash From Operating Activities
|
|
|
25,482
|
|
|
|
1,059
|
|
|
|
(2,862
|
)
|
|
Net Cash From Investing Activities
|
|
|
249,245
|
|
|
|
325,413
|
|
|
|
29
|
|
|
Net Cash From Financing Activities
|
|
|
(403,669
|
)
|
|
|
(413,761
|
)
|
|
|
-
|
|
|
|
|
|
(128,942
|
)
|
|
|
(87,289
|
)
|
|
|
(2,833
|
)
|
For the year ended December 31, 2020 compared to year ended December
31, 2019
Net Cash From Operating Activities. For
the year ended December 31, 2020, we recorded a net cash outflow from operating activities of approximately HK$2.9 million. Compared to
the year ended December 31, 2019, which we generated an overall net cash inflow from operating activities of approximately HK$1.1 million.
These were mainly attributable to net cash outflow used in continuing operations for HK$2.9 million in fiscal 2020, as compared to net
cash outflow used in continuing operations for HK$10.9 million in fiscal 2019 (mainly in terms of exchange loss).
Net Cash From Investing Activities. For
the year ended December 31, 2020, we generated a net cash inflow from investing activities of HK$0.029 million for the proceeds received
from the disposal of a wholly-owned dormant subsidiary. For the year ended December 31, 2019, we recorded a net cash inflow from investing
activities of HK$325.4 million.
Net cash generated from financing activities. For
the year ended December 31, 2020, there was no net cash inflow or outflow from financing activities. For the year ended December 31, 2019,
we recorded a net cash outflow by financing activities of approximately HK$413.8 million.
For the year ended December 31, 2019 compared to year ended December
31, 2018
Net Cash From Operating Activities. For
the year ended December 31, 2019, we generated a net cash inflow from operating activities of HK$1.1 million. Compared to the year ended
December 31, 2018, which we generated a net cash inflow from operating activities of HK$25.5 million. These were mainly attributable to
net cash outflow used in continuing operations for HK$10.9 million in fiscal 2019 (mainly in terms of exchange loss), as compared to net
cash inflow HK$8.3 million provided by continuing operations at the back of an exchange gain in fiscal 2018.
Net Cash From Investing Activities. For
the year ended December 31, 2019, we recorded a net cash inflow from investing activities of HK$325.4 million, mainly arising from further
and final payment made to us as a result of Plastec achieving the performance target set for the year ended December 31, 2018 and settlement
of account payable due to us upon disposal of our ownership interests in a former subsidiary holding the right to use the parcels of land
located in Furong Industrial District, Furongmei Area, Shajing Street, Xinqiao Village, Bao’an District, Shenzhen City, Guangdong
Province of the PRC pursuant to the terms of the Assets Disposal Agreement in November 2019.
Net cash generated from financing activities. For
the year ended December 31, 2019, we recorded a net cash outflow by financing activities of approximately HK$413.8 million, which comprised
of a net cash outflow of HK$413.8 million for the dividends paid. Compared to the year ended December 31, 2018, which we recorded a net
cash outflow of HK$403.7 million, which was again attributable to payments of dividends totaling HK$403.7 million.
Working capital
We believe that we have adequate working capital
for our present requirements and that our cash and cash equivalents will provide sufficient funds to satisfy our working capital requirements
for the period ending 12 months from the date of this prospectus. As at the year ended December 31, 2020, we had a cash and bank balance
of approximately HK$182.7 million, of which approximately HK$169.9 million was denominated in Hong Kong Dollars and approximately HK$12.8
million equivalent was denominated in US Dollars, respectively.
Indebtedness
As of December 31, 2020, our indebtedness was
nil.
As of December 31, 2020, our estimates for contractual
cash commitments, interest commitment and operating lease obligations were all nil.
Quantitative and Qualitative Disclosures About Market Risks
Market risk is a broad term for the risk of economic
loss due to adverse changes in the fair value of a financial instrument. These changes may be the result of various factors, including
interest rates, foreign exchange rates, commodity prices and/or equity prices.
Foreign exchange risk. Up until
November 2019, our income was mainly denominated in Renminbi whereas our costs and capital expenditures were largely denominated in Renminbi
and other foreign currencies. Fluctuations in currency exchange rates, particularly among the Hong Kong dollar, U.S. dollar and Renminbi,
could have a significant impact on our financial condition and results of operations, affect our gross and operating profit margins and
result in foreign exchange and operating gains or losses. After completion of the disposal of our former subsidiary that generated rental
revenues pursuant to the terms of the Assets Disposal Agreement in November 2019, we recorded no operating income from our continuing
operations. With the retrospective adjustments for the deconsolidation of this disposal, which has been classified as discontinued operations,
we recorded aggregate net foreign currency exchange gain/(loss) of approximately HK$10.0 million, HK$(11.5) million and HK$Nil for the
years ended December 31, 2018, 2019 and 2020, respectively, mainly attributable to receipts of tranches of the RMB-denominated Remaining
Amount from SYB pursuant to the terms of the Agreement during fiscal years 2018 and 2019. We currently do not plan to enter into any hedging
arrangements, such as forward exchange contracts and foreign currency option contracts, to reduce the effect of our foreign exchange risk
exposure, if any. However, if we decided to enter into any such hedging activities in the future, there is no assurance that we would
be able to effectively manage our foreign exchange risk exposure.
Seasonality
We have not been subject to any seasonality in
our continuing operations in any material respect.
Subsequent Material Changes
There have been no material changes in our financial
condition and results of operations subsequent to December 31, 2020.
CORPORATE HISTORY AND STRUCTURE
We are a Cayman Islands company incorporated under
the Companies Act. We were incorporated on March 27, 2008 as an exempted company with limited liability. We were originally incorporated
under the name “GSME Acquisition Partners I” for the purpose of acquiring, through a merger, share exchange, asset acquisition,
plan of arrangement, recapitalization, reorganization or similar business combination, an operating business, or control of such operating
business through contractual arrangements, that had its principal operations located in the PRC.
On November 25, 2009, we closed our initial public
offering, or “IPO,” of 3,600,000 units with each unit consisting of one ordinary share and one warrant, or “public warrants,”
each to purchase one ordinary share at an exercise price of $11.50 per share. The units were sold at an offering price of $10.00 per unit,
generating gross proceeds of $36,000,000. We also issued to the underwriters in the IPO an aggregate of 360,000 unit purchase options,
each to purchase a unit identical to the units sold in the IPO, at an exercise price of $15.00 per unit, of which 70,375 unit purchase
options were subsequently repurchased by us in April 2012. Simultaneously with the consummation of the IPO, we consummated the private
sale of 3,600,000 warrants, or “insider warrants,” at a price of $0.50 per warrant, generating total proceeds of $1,800,000.
In connection with the IPO, our initial shareholders placed a total of 1,200,000 ordinary shares, or “initial shares”, in
escrow pursuant to an escrow agreement with Continental Stock Transfer & Trust Company, as escrow agent.
From the consummation of our IPO until August
6, 2010, we were searching for a suitable target business to acquire. On August 6, 2010, we entered into an agreement and plan of reorganization,
or “Merger Agreement,” with Plastec, each of the former Plastec shareholders and our merger subsidiary, which provided, among
other things, that our wholly owned subsidiary would merge with and into Plastec, with Plastec surviving as a wholly owned subsidiary
of ours then. The Merger Agreement was subsequently amended in September 2010 and December 2010 but continued to provide for our wholly
owned subsidiary to merge with and into Plastec, with Plastec surviving as a wholly owned subsidiary of ours then. On December 10, 2010,
we held an extraordinary general meeting of our shareholders, at which our shareholders approved the merger and other related proposals.
On December 16, 2010, we closed the merger. At the closing, we issued to the former shareholders of Plastec an aggregate of 7,054,583
ordinary shares and agreed to issue the former Plastec shareholders an aggregate of 9,723,988 earnout shares additionally upon the achievement
by Plastec of certain net income targets. Also at the closing, 2,615,732 of the public shares sold in our IPO were converted into cash
and cancelled based on the election of the holders to exercise their conversion rights. In connection with the merger, our business then
became the business of Plastec and we changed our name to “Plastec Technologies, Ltd.” On April 30, 2011, we further amended
the Merger Agreement to remove certain earnout provisions contained within it and to issue an aggregate of 7,486,845 ordinary shares to
the former Plastec shareholders. We subsequently repurchased from one of the former Plastec shareholders an aggregate of 1,570,000 shares.
In connection with the merger with Plastec, we
amended the terms of the escrow agreement with the initial shareholders to include in escrow an aggregate of 2,418,878 of the insider
warrants and to provide additional restrictions on the release from escrow of all of the securities, including the requirement to raise
certain financing by December 16, 2011. On December 16, 2011, the escrow agreement was again amended and the date on which the required
financing was needed by was extended to March 16, 2012. No funds were ultimately raised and as a result, a total of 806,293 initial shares
and the entire 2,418,878 insider warrants held in escrow were automatically repurchased by us at an aggregate consideration of $0.01 and
cancelled.
We announced the establishment of a repurchase
program in December 2011, under which and as the program was subsequently extended and expanded, we were allowed to repurchase up to $5.0
million of our ordinary shares and public warrants in both open market and privately negotiated transactions at the discretion of our
management and as market conditions allowed, or “2011 Repurchase Program.” At the completion of the 2011 Repurchase Program
on September 25, 2013, we had repurchased 832,765 ordinary shares and 85,000 public warrants thereunder.
On September 25, 2013, we also announced a new
repurchase program, under which and as the program was subsequently extended and expanded, we are allowed to repurchase up to $5.0 million
of our units, ordinary shares and public warrants in both open market and privately negotiated transactions at the discretion of our management
and as market conditions allowed, or “2013 Repurchase Program.” The 2013 Repurchase Program (as extended) is currently valid
through September 25, 2021 and so far we have repurchased 586,010 ordinary shares and 547,600 public warrants thereunder.
On November 18, 2014, all issued and outstanding
public warrants, insider warrants and unit purchase options expired and were cancelled accordingly.
On November 14, 2015, we entered into the
Agreement with SYB and its wholly-owned subsidiary, SYIM. Pursuant to the Agreement, SYIM was to purchase, through a wholly-owned
Hong Kong subsidiary, the entirety of our shareholding interests in Plastec for an aggregate purchase price of RMB 1,250,000,000 (or
US$192,307,692), in cash (the “Transfer Price”). Of the Transfer Price, RMB 875,000,000 (or US$134,615,385) was payable
within 60 days after the China Securities Regulatory Commission approved of the Issuance (as defined in the Agreement) and
SYB’s receipt of the funds raised through the Issuance, the latter of which was confirmed by SYB to have happened by July 29,
2016. Accordingly, payment of the initial portion of the Transfer Price was made to us on September 21, 2016.
The remaining RMB 375,000,000 (or US$57,692,308)
of the Transfer Price (the “Remaining Amount”) was deposited into a bank account designated solely for the purpose of the
transaction, supervised and administered by SYB and us jointly, with tranches of which made payable to us upon Plastec achieving certain
performance targets for the years ended December 31, 2016, 2017 and 2018 (the “Performance Commitments”) as described below:
|
Year ending December 31,
|
|
|
Net Profit Target
|
|
Payment Amount
|
|
2016
|
|
|
HK$161,211,000
|
|
RMB 113,250,000 (US$17,423,077)
|
|
2017
|
|
|
HK$177,088,000
|
|
RMB 124,380,000 (US$19,135,385)
|
|
2018
|
|
|
HK$195,408,000
|
|
RMB 137,370,000 (US$21,133,846)
|
Under the Agreement, we were obliged to use our
best efforts to cause certain of our executives to continue their offices with certain of Plastec’s subsidiaries and to enter into
services agreements with those subsidiaries for a term expiring no earlier than December 31, 2018. The parties also agreed that if Plastec’s
cumulative actual net profits for the three years ended December 31, 2018 exceeded the cumulative Performance Commitment for such period,
30% of the surplus would be distributed to Plastec’s management team, including those members designated by us, in cash as a bonus.
On
October 11, 2016, the parties consummated the transactions contemplated by the Agreement after the fulfillment of certain other conditions,
as described in the Agreement. As a result, we no longer own Plastec.
By
a letter dated May 10, 2017, SYB confirmed and acknowledged to us that Plastec’s audited net profit (on a consolidated basis, after
deducting non-recurring gains and losses) for the year ended December 31, 2016 was HK$183,958,100, which was in excess of the performance
target for the year ended December 31, 2016, set at HK$161,211,000 in the Agreement, by HK$22,747,100 or approximately 14.1%. Accordingly,
we were paid a further sum of RMB 113,250,000 (or US$17,423,077) of the Remaining Amount on June 1, 2017 and in accordance with the terms
of the Agreement.
By
a letter dated March 28, 2018, SYB confirmed and acknowledged to us that Plastec’s audited net profit (on a consolidated basis,
after deducting non-recurring gains and losses) for the year ended December 31, 2017 was HK$183,124,000, which was in excess of the performance
target for the year ended December 31, 2017, set at HK$177,088,000 in the Agreement, by HK$6,036,000 or approximately 3.4%. Accordingly,
we were paid a further sum of RMB 124,380,000 (or US$19,135,385) of the Remaining Amount on May 25, 2018 and in accordance with the terms
of the Agreement.
By
a letter dated April 26, 2019, SYB confirmed and acknowledged to us that Plastec’s audited net profit (on a consolidated basis,
after deducting non-recurring gains and losses) for the year ended December 31, 2018 was HK$262,954,000, which was in excess of the performance
target for the year ended December 31, 2018, set at HK$195,408,000 in the Agreement, by HK$67,546,000 or approximately 34.6%. Accordingly,
we were paid a further sum of RMB 137,370,000 (or US$21,133,846) of the Remaining Amount on May 30, 2019 and in accordance with the terms
of the Agreement.
The
following chart illustrates the organizational structure of us and our subsidiaries as of the date of this prospectus.
|
|
|
|
|
|
|
|
|
|
|
|
Plastec Technologies, Ltd.
|
|
|
|
|
|
|
(incorporated in Cayman Islands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Viewmount Developments Limited
|
|
|
|
|
|
|
景峰發展有限公司
|
|
|
|
|
|
|
(BVI)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100%
|
|
|
100%
|
|
|
100%
|
|
|
|
|
|
|
|
|
|
|
Sun Ngai Spraying and
|
|
Sun Line
|
|
Sun Terrace Industries
|
|
Silk Print Co., Ltd.
|
|
Industrial Limited
|
|
Limited
|
|
新藝噴油絲印有限公司
|
|
新麗工業有限公司
|
|
新達威工業有限公司
|
|
(BVI)
|
|
(HK)
|
|
(BVI)
|
|
|
|
|
|
|
BUSINESS
Following
consummation of the transactions described in this prospectus, our only operations have generally been to (i) complete the construction
of a manufacturing plant in Kai Ping, China which was disposed of and transferred to Plastec upon its establishment on April 20, 2018
as described below, (ii) collect rental income from certain property we used to own and which was being leased to one of Plastec’s
subsidiaries until November 2019 when the former subsidiary of ours that held the property was disposed of to an unaffiliated third party
as described below, (iii) collect the payments upon Plastec achieving the performance targets for the years ended December 31, 2016 through
2018 as described in the Agreement; and (iv) to explore other investment opportunities.
In
accordance with the terms and spirit of the Agreement, we caused Viewmount to enter into the Manufacturing Plant Transfer Agreement on
March 30, 2018, pursuant to the terms and conditions of which Viewmount was to transfer the ownership interests in certain of its former
subsidiaries holding the newly established manufacturing plant in Kai Ping, China through their PRC subsidiaries to Plastec for a total
consideration of approximately HK$70,000 (or US$8,974), representing the actual registered capital injected by Viewmount into the relevant
subsidiaries.
On
April 20, 2018, the parties consummated the transactions contemplated by the Manufacturing Plant Transfer Agreement. The parties also
settled all account payables owed by the relevant subsidiaries to Viewmount at the closing, totaling HK$258,910,000 (or US$33,193,590).
On
November 15, 2019, Viewmount entered into the Assets Disposal Agreement with the Purchaser, pursuant to which Viewmount was to transfer
the ownership interests in its then wholly-owned subsidiary holding the right to use certain parcels of land in Shenzhen together with
premises built thereon to the Purchaser for HK$47,964,570.65 (or US$6,149,304) in cash, net of all relevant expenses, charges and taxes.
On
November 20, 2019, the parties consummated the transactions contemplated by the Assets Disposal Agreement; on which date Viewmount also
received from the Purchaser HK$112,035,429.35 (or US$14,363,517) representing all amounts due from the former subsidiary disposed of.
To
date, we have not identified any investment opportunities, the pursuit of which we believe would be advantageous to us to supplement
our current minimal operations. As a result, we cannot assure you that we will be able to locate any such investment opportunity in the
future and accordingly there is no current basis for you to evaluate the possible merits or risks of any investment opportunity we may
ultimately pursue.
Although
our management will endeavor to evaluate the risks inherent in any particular investment opportunity, we cannot assure you that we will
properly ascertain or assess all of the significant risk factors or not be exposed to potential risks which could have a material and
adverse effect on ability to manage our business. Further, as a result of our current minimal operations, limited resources for want
of operating revenues and the need to maintain adequate control of our costs and expenses, we may not be able to attract, train, motivate
and recruit suitably qualified personnel to explore or effect any investment opportunity thereby making it difficult for you to evaluate
our long term business, financial performance and prospects. If we do not succeed in launching any new business upon an investment opportunity
to supplement our current minimal operations, our future results of operations and growth prospects may be materially and adversely affected
arising from a lack of business diversification.
Our
ability to successfully effect any investment opportunity will also be dependent upon the efforts of our key personnel. However, our
executive officers are not required to, and it is unlikely that they will, commit and devote their full time efforts to our affairs.
Accordingly, there is no assurance that they will spend sufficient time to our locating any potential investment opportunity. Further,
the unexpected loss of our executives could have a detrimental effect on us and our ability to realize any potential investment opportunity.
Further,
we expect to encounter competition from entities having a business objective similar to ours, including venture capital funds, leveraged
buyout funds and operating businesses competing for investment opportunities. Many of these entities are well established and have extensive
experience in identifying and effecting investment opportunities directly or through affiliates. Many of these competitors possess greater
technical, human and other resources than we do and our financial resources will be relatively limited when contrasted with those of
many of these competitors. The foregoing may place us at a competitive disadvantage in successfully locating and consummating any investment
opportunity.
Properties
As
of the date of this prospectus, we are not interested in, nor do we own, any properties.
Executives
and Directors
As
of the date of this prospectus, we have no employees but have two executive officers and two independent directors. These individuals
are not obligated to devote any specific number of hours to our matters and intend to devote only as much time as they deem necessary
to our affairs. The amount of time they will devote in any time period will vary based on whether an investment opportunity has been
targeted and works arising therefrom. Accordingly, once management locates a suitable investment opportunity, they will consequently
spend more time to our affairs than they would prior to locating a suitable investment opportunity and we do not intend to have any full
time employees prior to that event.
DIRECTORS,
SENIOR MANAGEMENT AND EMPLOYEES
Directors
and Senior Management
Our
current directors and officers are:
|
Name
|
|
Age
|
|
Position
|
|
Kin Sun Sze-To (4)
|
|
59
|
|
Chairman of the Board and Chief Executive Officer and
Chief Operating Officer
|
|
Ho Leung Ning (4)
|
|
60
|
|
Chief Financial Officer and Director
|
|
Chung Wing Lai (1) (2) (3)
|
|
73
|
|
Director
|
|
Joseph YiuWah Chow (1) (2) (3)
|
|
61
|
|
Director
|
|
|
(1)
|
Serves as
a member of the Audit Committee.
|
|
|
(2)
|
Serves as
a member of the Compensation Committee.
|
|
|
(3)
|
Serves as
a member of the Nominating and Corporate Governance Committee.
|
|
|
(4)
|
Serves as a member of the Executive Committee.
|
Kin
Sun Sze-To has been our Chairman of the Board and Chief Executive Officer since the consummation of the merger in December 2010
and more recently has also served as our Chief Operating Officer since consummation of the disposal of our shareholdings in Plastec to
SYB in October 2016. From January 2018 through October 2019, he was also a non-independent director of SYB. Mr. Sze-To is responsible
for exploring, directing and reviewing our long-term investment opportunities and business development strategies. Mr. Sze-To started
his career in the specialized field of spraying and silk screening of plastics products, before diversifying and accumulating over 20
years of experience in other areas of the plastic injection and molding industry. We believe Mr. Sze-To’s past business experience
as well as his contacts and relationships make him well qualified to be a member of our board of directors. Mr. Sze-To graduated from
the Third Kaiping High School of China in 1978 and completed a 2-year Organizational Design Program for Enterprise Founders conducted
by the HSBC Business School of Peking University in 2014.
Ho
Leung Ning has served as our Chief Financial Officer and a Director of ours since the consummation of the merger in December
2010. He has also served as Deputy Vice President of SYB since August 2017. Mr. Ning is responsible for our corporate planning and financial
activities, and he has over 20 years of experience in the banking and finance industry. Prior to joining the pre-divested Plastec in
2004, Mr. Ning was the Assistant General Manager of the Hong Kong branch of The Bank of Tokyo Mitsubishi UFJ Ltd. We believe Mr. Ning’s
past business experience and financial knowledge and understanding makes him well qualified to be a member of our board of directors.
Mr. Ning graduated from the Hong Kong Baptist University with an Honors Diploma in Economics in 1984.
Chung
Wing Lai has been a Director of ours since the consummation of the merger in December 2010. Since July 2002, Mr. Lai has been
involved in business consultancy and advisory work in the Asia Pacific region. From February 1993 to December 1994, he served as the
managing director of Seaunion Holdings Ltd. (now known as Elate Holdings Ltd.), a company listed on The Stock Exchange of Hong Kong Ltd.
From 1999 to February 2009, he was an independent non-executive director of Kingboard Copper Foil Holdings Ltd, a public listed company
on The Stock Exchange of Singapore. From June 2004 to October 2010, he was also an independent non-executive director of Kee Shing (Holdings)
Ltd. (now known as Gemini Investments (Holdings) Ltd.) a company listed on The Stock Exchange of Hong Kong Ltd. From February 2009 through
May 2016, he was an independent non-executive director of Kingboard Chemical Holdings Ltd, a public listed company on The Stock Exchange
of Hong Kong Ltd. We believe Mr. Lai’s past business experience, including serving as an independent director of a number of publicly
listed companies, makes him well qualified to be a member of our board of directors. Mr. Lai received a Bachelor-of-Laws (Honours) degree
from the University of London in 1983.
Joseph
Yiu Wah Chow has been a Director of ours since the consummation of the merger in December 2010. Mr. Chow has over 20 years
of experience in auditing, accounting, and financial management. He has been a senior partner of JYC & Company, an accounting
firm, since January 2006 and a practicing director of KTC Partners CPA Limited since May 2008 as well as being a practicing director
of Crowe (HK) CPA Limited since January 2019. We believe Mr. Chow’s financial background in auditing, accounting and financial
management makes him well qualified to be a member of our board of directors and chairman of our audit committee. Mr. Chow graduated
from the University of Ulster in the United Kingdom with a Bachelor degree in Accounting in 1989. Additionally, Mr. Chow is also
admitted as a member of Association of Chartered Certified public Accountants in 1991 and a member of the Hong Kong Institute of
Certified Public Accountants in 1992. He has also been an associate member of the Taxation Institute of Hong Kong since 1992, Hong
Kong Securities Institute since 1998 and Institute of Chartered Accountants in England and Wales since 2006.
Director
Term of Office
Each
director serves until our next annual general meeting, if one is called for, and until his successor is elected and qualified. We have
not entered into service or similar contracts with our directors.
Board
Committees
We
have standing executive, audit, compensation and nominating and corporate governance committees. Except for the executive committee,
each of these committees is comprised entirely of independent directors, as defined by the listing standards of the NASDAQ Stock Market.
Moreover, the compensation committee is composed exclusively of individuals intended to be, to the extent required by Rule 16b-3 of the
Exchange Act, non-employee directors and will, at such times as we are subject to Section 162(m) of the Internal Revenue Code, qualify
as outside directors for purposes of Section 162(m) of the Internal Revenue Code.
Executive
Committee
Our
executive committee is currently comprised of Kin Sun Sze-To and Ho Leung Ning. While the executive committee does not have a formal
written charter, the board has determined that the executive committee’s responsibilities will be to generally manage our business
affairs and exercise all powers of the board (other than actions that would require the board to act as a whole or which actions are
vested in other committees of the board or require shareholder approval).
Audit
Committee Information
Our
audit committee is currently comprised of Joseph Yiu Wah Chow and Chung Wing Lai, with Joseph Yiu Wah Chow serving as chairman. The audit
committee, pursuant to the audit committee charter, is responsible for engaging independent certified public accountants, preparing audit
committee reports, reviewing with the independent certified public accountants the plans and results of the audit engagement, approving
professional services provided by the independent certified public accountants, reviewing the independence of the independent certified
public accountants, considering the range of audit and non-audit fees, reviewing the adequacy of our internal accounting controls and
reviewing all related party transactions.
Financial
Experts on Audit Committee
The
audit committee will at all times be composed exclusively of “independent directors” who are “financially literate”
as defined under NASDAQ listing standards. The definition of “financially literate” generally means being able to read and
understand fundamental financial statements, including a company’s balance sheet, statement of comprehensive income and cash flow
statement.
In
addition, our board of directors has determined that Joseph Yiu Wah Chow satisfies the definition of financial sophistication and also
qualifies as an “audit committee financial expert,” as defined under rules and regulations of the SEC.
Nominating
and Corporate Governance Committee
Our
nominating and corporate governance committee is currently comprised of Chung Wing Lai and Joseph Yiu Wah Chow, with Chung Wing Lai serving
as chairman. The nominating and corporate governance committee is responsible for seeking, considering and recommending to the board
qualified candidates for election as directors and will approve and recommend to the full board of directors the appointment of each
of our executive officers. It also periodically prepares and submits to the board of directors for adoption the committee’s selection
criteria for director nominees. It reviews and makes recommendations on matters involving the general operation of the board and our
corporate governance, and annually recommends to the board nominees for each committee of the board. In addition, the committee annually
facilitates the assessment of the board of directors’ performance as a whole and of the individual directors and report thereon
to the board.
Compensation
Committee
Our
compensation committee currently is comprised of Joseph Yiu Wah Chow and Chung Wing Lai, with Joseph Yiu Wah Chow serving as chairman.
The principal functions of the compensation committee are to:
|
|
●
|
evaluate
the performance of our officers;
|
|
|
●
|
review any
compensation payable to our directors and officers;
|
|
|
●
|
prepare
compensation committee reports; and
|
|
|
●
|
administer the issuance of any ordinary shares or other
equity awards issued to our officers and directors.
|
Compensation
of Non-Executive Independent Directors
Following
consummation of our divestment of our shareholdings in Plastec to SYB on October 11, 2016 and as a result of our current minimal operations,
effective from November 2016 each of our current non-executive independent directors has been paid HK$10,000 for each month that they
continue to serve on our board.
During
the year ended December 31, 2020, the aggregate amount of compensation paid to our non-executive independent directors was HK$240,000.
Compensation
of Executive Officers
Following
consummation of our divestment of our shareholdings in Plastec to SYB on October 11, 2016 and as a result of our current minimal operations,
effective from November 2016 each of our current executive officers has received monthly cash compensation in the sum of HK$10,000.
During
the year ended December 31, 2020, the aggregate amount of compensation paid to our executive officers was HK$240,000.
The
following table sets forth the compensation of our named executive officers for the year ended December 31, 2020:
|
Name and Principal Position
|
|
Year ended
December 31,
|
|
|
Salary
(HK$)
|
|
|
Total
(HK$)
|
|
|
Kin Sun Sze-To
|
|
|
2020
|
|
|
|
120,000
|
|
|
|
120,000
|
|
|
Chairman of the Board
and Chief Executive Officer and Chief Operating Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ho Leung Ning
|
|
|
2020
|
|
|
|
120,000
|
|
|
|
120,000
|
|
|
Chief Financial Officer
|
|
|
|
|
|
|
|
|
|
|
|
|
Code
of Ethics
In
November 2009, our board of directors adopted a code of ethics that applies to our directors, officers and employees as well as those
of our subsidiaries. We will provide to any person upon request, without charge, a copy of our code of ethics. Please direct such requests
in writing to us, Attention Kin Sun Sze-To, c/o Unit 01, 21/F, Aitken Vanson Centre, 61 Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong.
Principal
Legal Advisers
Our
principal legal adviser in the United States is Graubard Miller, located at 405 Lexington Avenue, New York, New York 10174. Our principal
legal adviser in the Cayman Islands is Maples and Calder (Cayman) LLP, located at PO Box 309, Ugland House, Grand Cayman KY1-1104, Cayman
Islands. Our principal legal adviser in the People’s Republic of China is Jingtian & Gongcheng, located at 34/F, Tower 3, China
Central Place, 77 Jianguo Road, Chaoyang District, Beijing 100025 People’s Republic of China.
PRINCIPAL
SHAREHOLDERS
The
following table sets forth, as of May 11, 2021, certain information regarding beneficial ownership of our shares by each person who is
known by us to beneficially own more than 5% of our shares. The table also identifies the share ownership of each of our directors, each
of our named executive officers, and all directors and officers as a group. Except as otherwise indicated, the shareholders listed in
the table have sole voting and investment powers with respect to the shares indicated. Our major shareholders do not have different voting
rights than any other holder of our shares.
Shares
which an individual or group has a right to acquire within 60 days pursuant to the exercise or conversion of options, warrants or other
similar convertible or derivative securities, if any, are deemed to be outstanding for the purpose of computing the percentage ownership
of such individual or group, but are not deemed to be outstanding for the purpose of computing the percentage ownership of any other
person shown in the table.
Beneficial
ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting and investment
power. Except as otherwise indicated below, each beneficial owner holds voting and investment power directly. The percentage of ownership
is based on 12,938,128 shares issued and outstanding as of May 11, 2021.
|
Name and Address of Beneficial Owner (1)
|
|
Amount and
Nature of
Beneficial
Ownership
|
|
|
Percent
of Class
|
|
|
Major Shareholder(s):
|
|
|
|
|
|
|
|
|
|
Kwok Wa Hung
|
|
|
1,014,753
|
(2)
|
|
|
7.8
|
%
|
|
Directors and Executive Officers:
|
|
|
|
|
|
|
|
|
|
Kin Sun Sze-To
|
|
|
10,134,283
|
(3)
|
|
|
78.3
|
%
|
|
Ho Leung Ning
|
|
|
241,971
|
(4)
|
|
|
1.9
|
%
|
|
Chung Wing Lai
|
|
|
0
|
|
|
|
0
|
%
|
|
Joseph Yiu Wah Chow
|
|
|
0
|
|
|
|
0
|
%
|
|
All directors and executive officers as a group (4 individuals)
|
|
|
10,376,254
|
|
|
|
80.2
|
%
|
|
|
(1)
|
Unless otherwise indicated, the business address of
each of the individuals is Unit 01, 21/F, Aitken Vanson Centre, 61 Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong. Unless otherwise
indicated, none of the individuals have voting rights that differ from other shareholders.
|
|
|
(2)
|
The business address of Mr. Hung is c/o 16th
Floor, Guangdong Finance Building, 88 Connaught Road West, Central, Hong Kong. The foregoing information is derived from a Schedule
13G/A filed with the SEC on March 03, 2015 and other information known to us.
|
|
|
(3)
|
Consists of 9,245,382 ordinary shares held by Sun Yip
Industrial Company Limited and 888,901 ordinary shares held by Tiger Power Industries Limited (“Tiger Power”), each of
which is an entity controlled by Mr. Sze-To. The foregoing information is derived from a Schedule 13D/A filed with the SEC on January
5, 2017.
|
|
|
(4)
|
Includes 241,971 ordinary shares held by Expert Rank
Limited, an entity controlled by Mr. Ning.
|
As
of May 11, 2021, there were 18 shareholders of record holding a total of 12,938,128 of our ordinary shares. To the best of our knowledge
there were 4 shareholders of record with addresses in the United States holding 556,133 (4.3%) of our outstanding ordinary shares. The
foregoing calculations include 1 unit holder with a United States address holding 1,694 units, each consisting of 1 ordinary share. Ordinary
shares held in the names of banks, brokers and other intermediaries were assumed to be held by residents of the same country in which
the bank, broker or other intermediary was located.
CERTAIN
RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
Our
Code of Ethics and Related Person Policy
In
November 2009, our board of directors adopted a code of ethics that applies to our directors, officers and employees as well as those
of our subsidiaries.
Our
Code of Ethics requires it to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts
of interest, except under guidelines approved by the board of directors (or the audit committee, if one exists). Related-party transactions
with respect to smaller reporting companies such as us are defined under SEC rules as transactions in which (1) the aggregate amount
involved will or may be expected to exceed the lesser of $120,000 or one percent of the average of the smaller reporting company’s
total assets at year end for the last two completed years, (2) we or any of our subsidiaries is a participant, and (3) any (a) executive
officer, director or nominee for election as a director, (b) greater than 5 percent beneficial owner of our shares, or (c) immediate
family member of the persons referred to in clauses (a) and (b), has or will have a direct or indirect material interest (other than
solely as a result of being a director or a less than 10 percent beneficial owner of another entity). A conflict of interest situation
can arise when a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively.
Conflicts of interest may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of
his or her position.
Our
audit committee, pursuant to its written charter, is responsible for reviewing and approving related-party transactions to the extent
we enter into such transactions. The audit committee will consider all relevant factors when determining whether to approve a related
party transaction, including whether the related party transaction is on terms no less favorable than terms generally available to an
unaffiliated third party under the same or similar circumstances and the extent of the related party’s interest in the transaction.
No director will be able to participate in the approval of any transaction in which he is a related party, but that director will be
required to provide the audit committee with all material information concerning the transaction. Additionally, we will require each
of our directors and executive officers to complete a directors’ and officers’ questionnaire on an annual basis that elicits
information about related party transactions.
These
procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a
conflict of interest on the part of a director, employee or officer.
Our
Related Person Transactions
There
were no related party transactions involving us or any of our subsidiaries with any of our officers and directors or their respective
affiliates for the fiscal year ended December 31, 2020. We require that all ongoing and future transactions between us and any of our
officers and directors or their respective affiliates will be on terms that we believe to be no less favorable to us than are available
from unaffiliated third parties. Such transactions require prior approval by a majority of our uninterested “independent”
directors or the members of our board who do not have an interest in the transaction, in either case who have access, at our expense,
to our attorneys or independent legal counsel.
SHARES
ELIGIBLE FOR FUTURE SALE
We
have 12,938,128 ordinary shares issued and outstanding as of June 1, 2021. Of these shares, 382,507 shares were
issued in private transactions prior to or in connection with our IPO, 844,193 shares were issued in our IPO and the remaining 11,711,428
shares were issued in connection with our merger. The shares issued in our public offering are freely tradable without restriction or
further registration under the Securities Act of 1933, as amended, except for any shares purchased by one of our affiliates within the
meaning of Rule 144 under the Securities Act of 1933, as amended. Any shares held by affiliates, as that term is defined in Rule 144
under the Securities Act, which generally includes officers, directors or 10% shareholders, will be restricted from public sale as restricted
stock. In connection with this offering, we are registering the resale of the shares issued prior to or in connection with our IPO and
the shares issued in connection with our merger. As a result, substantially all of our shares will be freely tradeable.
Rule
144. Rule 144 is unavailable for the resale of restricted securities initially issued by a blank-check or shell company,
both before and after an initial business combination, despite technical compliance with the requirements of Rule 144. Notwithstanding
the foregoing, a person who beneficially owns restricted securities of a company which:
|
|
1.
|
has ceased to qualify as a blank-check or shell company;
|
|
|
2.
|
is subject to the reporting requirements of Section
13 or 15(d) of the Exchange Act;
|
|
|
3.
|
has filed all reports and other materials required
to be filed by Section 13 or 15(d), as applicable, during the preceding 12 months (or such shorter period that the company was required
to file such reports and materials); and
|
|
|
4.
|
has filed certain information with the SEC (Form 10
information) reflecting that it is no longer a blank-check or shell company, may, after one year has elapsed from the filing of the
Form 10 information, within any three-month period resell a number of such restricted securities that does not, with respect to the
shares, exceed the greater of either of the following:
|
|
|
a.
|
1% of the total number of shares then outstanding;
or
|
|
|
b.
|
the average weekly trading volume of the shares during
the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.
|
Sales
under Rule 144 are also limited based on the availability of current public information about us, and, in the case of sales by affiliates,
by manner of sale provisions and notice requirements. As a result, it is likely that pursuant to Rule 144 our initial shareholders will
be able to sell their securities freely without registration as more than one year has elapsed after we ceased to be a shell company,
provided they are not affiliates of ours at that time and the other requirements for use of Rule 144 are satisfied at the time of sale.
SELLING
SECURITYHOLDERS
The
Selling Securityholders may from time to time offer and sell any or all of our securities set forth below pursuant to this prospectus.
When we refer to “Selling Securityholders” in this prospectus, we mean the persons listed in the table below, and the pledgees,
donees, permitted transferees, assignees, successors and others who later come to hold any of the Selling Securityholders’ interests
in our securities other than through a public sale.
The
following table sets forth, as of the date of this prospectus:
|
|
●
|
the name of the Selling Securityholders for whom we
are registering shares for resale to the public,
|
|
|
●
|
the number of ordinary shares that the Selling Securityholders
beneficially owned prior to the offering for resale of the securities under this prospectus,
|
|
|
●
|
the number of ordinary shares that may be offered for
resale for the account of the Selling Securityholders pursuant to this prospectus, and
|
|
|
●
|
the number and percentage of ordinary shares to be
beneficially owned by the Selling Securityholders after the offering of the resale securities (assuming all of the offered shares
are sold by the Selling Securityholders).
|
This
table is prepared solely based on information supplied to us by the listed Selling Securityholders, any Schedules 13D or 13G and other
public documents filed with the SEC, and assumes the sale of all of the shares offered hereby.
|
|
|
|
|
|
|
|
|
|
|
|
Ordinary Shares
Beneficially Owned
After Offering
|
|
|
Selling Securityholder (1)
|
|
Number of
Ordinary
Shares
Beneficially
Owned
|
|
|
Percentage
of Ordinary
Shares
Beneficially
Owned
|
|
|
Shares
Being
Offered
|
|
|
Number of
Shares
Outstanding
|
|
|
Percent
of Shares
|
|
|
Sun
Yip Industrial Company Limited (2)
|
|
|
9,245,382
|
|
|
|
71.5
|
%
|
|
|
8,954,120
|
|
|
|
291,262
|
|
|
|
2.3
|
%
|
|
Tiger
Power Industries Limited (2)
|
|
|
888,901
|
|
|
|
6.9
|
%
|
|
|
888,901
|
|
|
|
0
|
|
|
|
0
|
%
|
|
Expert
Rank Limited (3)
|
|
|
241,971
|
|
|
|
1.9
|
%
|
|
|
241,971
|
|
|
|
0
|
|
|
|
0
|
%
|
|
Fine
Colour Limited (4)
|
|
|
449,538
|
|
|
|
3.5
|
%
|
|
|
449,538
|
|
|
|
0
|
|
|
|
0
|
%
|
|
Greatest
Sino Holdings Limited
|
|
|
136,134
|
|
|
|
1.1
|
%
|
|
|
136,134
|
|
|
|
0
|
|
|
|
0
|
%
|
|
Colourful
Asia International Limited
|
|
|
559,816
|
|
|
|
4.3
|
%
|
|
|
559,816
|
|
|
|
0
|
|
|
|
0
|
%
|
|
Kwok
Wa Hung (5)
|
|
|
1,014,753
|
|
|
|
7.8
|
%
|
|
|
840,253
|
|
|
|
174,500
|
|
|
|
1.4
|
%
|
|
Cohen
& Company Securities, LLC (6)
|
|
|
3,202
|
|
|
|
*
|
|
|
|
3,202
|
|
|
|
0
|
|
|
|
0
|
%
|
|
Goldempire
Developments Limited (7)
|
|
|
20,000
|
|
|
|
*
|
|
|
|
20,000
|
|
|
|
0
|
|
|
|
0
|
%
|
|
(1)
|
Unless otherwise indicated, the business address of
each of the individuals and entities is c/o Unit 01, 21/F, Aitken Vanson Centre, 61 Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong.
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(2)
|
This entity is controlled by Kin Sun Sze-To, who has
served as our chairman of the board and chief executive officer since December 2010 and more recently has also served as our chief
operating officer since October 11, 2016.
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|
(3)
|
This entity is controlled by Ho Leung Ning, who has
served as our chief financial officer and a Director of ours since December 2010.
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|
(4)
|
This entity is 50% owned by Chin Hien Tan, our former
chief operating officer.
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|
(5)
|
The business address of Mr. Hung is c/o 16th
Floor, Guangdong Finance Building, 88 Connaught Road West, Central, Hong Kong.
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|
(6)
|
The business address of Cohen & Company Securities,
LLC is 1633 Broadway, 28th Floor, New York, NY 10019.
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|
(7)
|
The business address of Goldempire Developments Limited
is 25E Kennedy Town Centre, 38 Kennedy Town Praya, Hong Kong.
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Each
of the Selling Securityholders that is an affiliate of a broker-dealer has represented to us that it purchased the shares offered by
this prospectus in the ordinary course of business and, at the time of purchase of those shares, did not have any agreements, understandings
or other plans, directly or indirectly, with any person to distribute those shares.
PLAN
OF DISTRIBUTION
The
Selling Securityholders, which as used herein includes donees, pledgees, transferees or other successors-in-interest selling ordinary
shares or interests in ordinary shares received after the date of this prospectus from a Selling Securityholder as a gift, pledge, partnership
distribution or other transfer, may, from time to time, sell, transfer or otherwise dispose of any or all of their ordinary shares or
interests in ordinary shares on any stock exchange, market or trading facility on which the shares are traded or in private transactions.
These dispositions may be at fixed prices, at prevailing market prices at the time of sale, at prices related to the prevailing market
price, at varying prices determined at the time of sale, or at negotiated prices.
The
Selling Securityholders may use any one or more of the following methods when disposing of shares or interests therein:
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ordinary brokerage transactions and transactions in
which the broker-dealer solicits purchasers;
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block trades in which the broker-dealer will attempt
to sell the shares as agent, but may position and resell a portion of the block as principal to facilitate the transaction;
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purchases by a broker-dealer as principal and resale
by the broker-dealer for its account;
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an exchange distribution in accordance with the rules
of the applicable exchange;
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privately negotiated transactions;
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through the writing or settlement of options or other
hedging transactions, whether through an options exchange or otherwise;
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broker-dealers may agree with the Selling Securityholders
to sell a specified number of such shares at a stipulated price per share;
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a combination of any such methods of sale; and
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any other method permitted pursuant to applicable law.
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The
Selling Securityholders may, from time to time, pledge or grant a security interest in some or all of the ordinary shares owned by them
and, if they default in the performance of their secured obligations, the pledgees or secured parties may offer and sell the ordinary
shares, from time to time, under this prospectus, or under an amendment to this prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act amending the list of Selling Securityholders to include the pledgee, transferee or other successors in interest
as Selling Securityholders under this prospectus. The Selling Securityholders also may transfer the ordinary shares in other circumstances,
in which case the transferees, pledgees or other successors in interest will be the selling beneficial owners for purposes of this prospectus;
provided , however , that prior to any such transfer the following information (or such other information as may be required
by the federal securities laws from time to time) with respect to each such selling beneficial owner must be added to the prospectus
by way of a prospectus supplement or post-effective amendment, as appropriate: (1) the name of the selling beneficial owner; (2) any
material relationship the selling beneficial owner has had within the past three years with us or any of our predecessors or affiliates;
(3) the amount of securities of the class owned by such security beneficial owner before the offering; (4) the amount to be offered for
the security beneficial owner’s account; and (5) the amount and (if one percent or more) the percentage of the class to be owned
by such security beneficial owner after the offering is complete.
In
connection with the sale of our ordinary shares or interests therein, the Selling Securityholders may enter into hedging transactions
with broker-dealers or other financial institutions, which may in turn engage in short sales of the ordinary shares in the course of
hedging the positions they assume. The Selling Securityholders may also sell ordinary shares short and deliver these securities to close
out their short positions, or loan or pledge the ordinary shares to broker-dealers that in turn may sell these securities. The Selling
Securityholders may also enter into option or other transactions with broker-dealers or other financial institutions or the creation
of one or more derivative securities which require the delivery to such broker-dealer or other financial institution of shares offered
by this prospectus, which shares such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented
or amended to reflect such transaction).
The
aggregate proceeds to the Selling Securityholders from the sale of the ordinary shares offered by them will be the purchase price of
the ordinary shares less discounts or commissions, if any. Each of the Selling Securityholders reserves the right to accept and, together
with their agents from time to time, to reject, in whole or in part, any proposed purchase of ordinary shares to be made directly or
through agents. We will not receive any of the proceeds from this offering.
The
Selling Securityholders also may resell all or a portion of the shares in open market transactions in reliance upon Rule 144 under the
Securities Act of 1933, provided that they meet the criteria and conform to the requirements of that rule.
The
Selling Securityholders and any underwriters, broker-dealers or agents that participate in the sale of the ordinary shares or interests
therein may be “underwriters” within the meaning of Section 2(11) of the Securities Act. Any discounts, commissions, concessions
or profit they earn on any resale of the shares may be underwriting discounts and commissions under the Securities Act. Selling Securityholders
who are “underwriters” within the meaning of Section 2(11) of the Securities Act will be subject to the prospectus delivery
requirements of the Securities Act.
To
the extent required, the ordinary shares to be sold, the names of the Selling Securityholders, the respective purchase prices and public
offering prices, the names of any agents, dealer or underwriter, any applicable commissions or discounts with respect to a particular
offer will be set forth in an accompanying prospectus supplement or, if appropriate, a post-effective amendment to the registration statement
that includes this prospectus.
The
maximum amount of compensation to be received by any FINRA member or independent broker-dealer for the sale of any securities registered
under this prospectus will not be greater than 8.0% of the gross proceeds from the sale of such securities.
In
order to comply with the securities laws of some states, if applicable, the ordinary shares may be sold in these jurisdictions only through
registered or licensed brokers or dealers. In addition, in some states the ordinary shares may not be sold unless it has been registered
or qualified for sale or an exemption from registration or qualification requirements is available and is complied with.
We
have advised the Selling Securityholders that the anti-manipulation rules of Regulation M under the Exchange Act may apply to sales of
shares in the market and to the activities of the Selling Securityholders and their affiliates. In addition, we will make copies of this
prospectus (as it may be supplemented or amended from time to time) available to the Selling Securityholders for the purpose of satisfying
the prospectus delivery requirements of the Securities Act. The Selling Securityholders may indemnify any broker-dealer that participates
in transactions involving the sale of the shares against certain liabilities, including liabilities arising under the Securities Act.
We
have agreed to indemnify the Selling Securityholders against liabilities, including liabilities under the Securities Act and state securities
laws, relating to the registration of the shares offered by this prospectus.
We
have agreed with the Selling Securityholders to keep the registration statement of which this prospectus constitutes a part effective
until the earlier of (1) such time as all of the shares covered by this prospectus have been disposed of pursuant to and in accordance
with the registration statement or (2) the date on which the shares may be sold pursuant to Rule 144 of the Securities Act.
DESCRIPTION
OF SECURITIES AND CAYMAN ISLANDS COMPANY CONSIDERATIONS
The
information included in Exhibit 4.8 attached to our Annual Report on Form 20-F dated May 14, 2021 is incorporated herein.
Indemnity
Pursuant
to our second amended and restated memorandum and articles of association, every director, agent or officer of our company shall be indemnified
out of our assets against any liability incurred by him as a result of any act or failure to act in carrying out his functions other
than such liability (if any) that he may incur by his own actual fraud or willful default. No such director, agent or officer shall be
liable to us for any loss or damage in carrying out his functions unless that liability arises through the actual fraud or willful default
of such director, agent or officer. Additionally, we entered into an indemnification agreement with each of our officers and directors
in February 2011 whereby we agreed to indemnify, and advance expenses to, each officer and director to the fullest extent permitted by
applicable law.
Transfer
Agent
Our
transfer agent is Continental Stock Transfer & Trust Company, 1 State Street, 30th Floor, New York, New York 10004.
TAXATION
The
following summary of the material Cayman Islands, PRC and U.S. federal income tax consequences of the acquisition, ownership, and disposition
of our ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of which
are subject to change, possibly with retroactive effect. This summary does not deal with all possible tax consequences relating to an
investment in our ordinary shares, such as the tax consequences under state, local and other tax laws, except to the extent local tax
consequences are discussed under the PRC taxation section.
As
used in this discussion, references to “the company,” “we,” “our” or “us” refer only
to Plastec Technologies, Ltd.
Cayman
Islands Taxation
The
government of the Cayman Islands will not, under existing legislation, impose any income, corporate or capital gains tax, estate duty,
inheritance tax, gift tax or withholding tax upon the company or its shareholders. The Cayman Islands is not party to any double taxation
treaties that are applicable to payments made to or by us.
No
Cayman Islands stamp duty will be payable by you in respect of the issue or transfer of ordinary shares. However, an instrument transferring
title to an ordinary share, if brought to or executed in the Cayman Islands, would be subject to Cayman Islands stamp duty.
We
have received an undertaking from the Governor-in-Cabinet of the Cayman Islands, dated January 11, 2011, that, in accordance with section
6 of the Tax Concessions Act (As Revised) of the Cayman Islands, for a period of 20 years from the date of the undertaking, no law which
is enacted in the Cayman Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to us or our operations
and, in addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance
tax shall be payable (i) on the ordinary shares, or on the debentures or other obligations, of the company or (ii) by way of the withholding
in whole or in part on a payment of a dividend or other distribution of income or capital by the company to its shareholders or a payment
of principal or interest or other sums due under a debenture or other obligation of the company.
PRC
Taxation
During
fiscal year 2019 through closing of the Assets Disposal Agreement on November 20, 2019, the following is a summary of the material PRC
tax consequences of the acquisition, ownership and disposition of our ordinary shares. You should consult with your own tax adviser regarding
the PRC tax consequences of the acquisition, ownership and disposition of our ordinary shares in your particular circumstances.
Income
from Leasing Real Properties of Our Former Non- PRC Subsidiaries in Shenzhen, PRC
Pursuant
to the Announcement of the State Administration of Taxation on Several Issues concerning the Administration of Income Tax on Non-Resident
Enterprise, issued by SAT on April 1, 2011, which was further amended in 2015 and 2017, a non-resident enterprise without any branch
or establishment to conduct management within the territory of China leases its immovable property such as houses or buildings in China,
the enterprise income tax on the income from the lease of the houses or buildings shall be calculated on the basis of all the rent income.
The domestic tenants shall withhold the enterprise income tax when paying the rent or when the rent is due and payable; a non-resident
enterprise dispatches employees or entrust other domestic units or individuals to conduct daily management of the aforesaid immovable
property within the territory of China, such non-resident enterprise shall be deemed to have a branch or establishment within the territory
of China, and it shall, within the time limit specified by the Enterprise Income Tax Law, file a tax return for enterprise income tax
and pay it.
At
all material times, a former non-PRC subsidiary of ours engaged a PRC individual to manage its real properties in Shenzhen, PRC and to
lease, receive income of leasing and pay tax for and on its behalf.
Penalties
for Failure to Pay Applicable PRC Income Tax
A
non-resident investor in us may be responsible for paying PRC income tax on any gain realized from the sale or transfer of our ordinary
shares, if such non-resident investor and the gain satisfy the requirements under the PRC tax laws, as described above.
According
to the EIT Law and its implementing rules, the PRC Tax Administration Law (the “Tax Administration Law”) and its implementing
rules, Announcement 37 and other applicable PRC laws or regulations (collectively the “Tax Related Laws”), where any gain
derived by a non-resident investor from the sale or transfer of our ordinary shares, may be subject to any income tax in the PRC, and
such non-resident investor fails to file any tax return or pay tax in this regard pursuant to the Tax Related Laws, such investor may
be subject to certain fines, penalties or punishments, including without limitation: (1) if the non-resident investor fails to file a
tax return and present the relevant information in connection with tax payments, the competent PRC tax authorities may order it to do
so within the prescribed time limit and may impose a fine up to RMB 2,000, and in egregious cases, may impose a fine ranging from RMB
2,000 to RMB 10,000; (2) if the non-resident investor fails to file a tax return or fails to pay all or part of the amount of tax payable,
the non-resident investor may be required to pay the unpaid tax amount payable, a surcharge on overdue tax payments (the daily surcharge
is 0.05% of the overdue amount, beginning from the day the deferral begins) and a fine ranging from 50% to 500% of the unpaid amount
of the tax payable; (3) if the non-resident investor fails to file a tax return and to pay the tax, the PRC tax authorities may order
the non-resident investor to file and pay the tax payable within a prescribed time limit, or may collect and check information about
the income receivable by the non-resident investor in the PRC from other payers (the “Other Payers”) who will pay amounts
to such non-resident investor and the information about the Other Payers, and send a “Notice of Tax Issues” to the Other
Payers to collect and recover the tax payable and overdue fines imposed on such non-resident investor from the amounts otherwise payable
to such non-resident investor by the Other Payers; (4) if the non-resident investor fails to pay the tax payable within the prescribed
time limit as ordered by the PRC tax authorities, a fine ranging from 50% to 500% of the unpaid tax payable and a surcharge on overdue
tax payments (the daily surcharge is 0.05% of the overdue amount, beginning from the day the deferral begins) may be imposed on the non-resident
investor, and the PRC tax authorities may, upon approval by the director of the tax bureau (or sub-bureau) of, or higher than, the county
level, take the following compulsory measures: (i) notify in writing the non-resident investor’s bank or other financial institution
to withhold from the account thereof for payment of the amount of tax payable, and (ii) detain, seal off, or sell by auction or on the
market the non-resident investor’s commodities, goods or other property in a value equivalent to the amount of tax payable; or
(5) if the non-resident investor fails to pay all or part of the amount of tax payable or the surcharge for the overdue tax payment,
and cannot provide a guarantee to the PRC tax authorities, the tax authorities may notify the frontier authorities to prevent the non-resident
investor or its legal representative from leaving the PRC.
U.S.
Taxation
With
respect to the U.S. tax matters discussed, this summary only applies to you if you are a beneficial owner of our ordinary shares and,
for U.S. federal income tax purposes, all of the following three points apply to you:
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You own, directly or indirectly less than 10% of our
capital stock;
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You are any one of (a), (b), (c) or (d) below:
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(a)
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an individual citizen or resident of the United States,
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(b)
|
a corporation (including an entity treated as a corporation
for U.S. federal income tax purposes) that is created or organized under the laws of the United States, any of its states or the
District of Columbia,
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(c)
|
an estate whose income is subject to U.S. federal income
taxation regardless of its source, or
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(d)
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a trust if (i) a U.S. court is able to exercise primary
supervision over the administration of such trust and one or more U.S. persons have the authority to control all of the substantial
decisions of such trust or (ii) it has a valid election in place to be treated as a U.S. person; and
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You hold our ordinary shares as capital assets.
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The
following description of tax consequences should be considered only as a summary and does not purport to be a complete analysis of all
potential tax effects of acquiring, owning or disposing of our ordinary shares.
Special
rules may apply to U.S. expatriates, insurance companies, tax-exempt organizations, regulated investment companies, real estate investment
trusts, real estate mortgage investment conduits, financial institutions, persons subject to the alternative minimum tax, securities
broker-dealers, traders in securities that elect to use a mark-to-market method of accounting for the securities holdings, and persons
holding their ordinary shares as part of a hedging, straddle, conversion transaction or other integrated investment, among others. Those
special rules are not discussed in this prospectus. This summary does not address all potential tax implications that may be relevant
to you as a holder, in light of your particular circumstances. You should consult your tax advisor concerning the overall U.S. federal,
state and local and non-U.S. tax consequences of your investment in our ordinary shares.
We
have not sought, and will not seek, any ruling from the Internal Revenue Service (or “IRS”) or any opinion of counsel with
respect to the tax consequences discussed below.
Taxation
of Dividends
For
U.S. federal income tax purposes, the gross amount of any dividend we pay on our ordinary shares will be included in your gross income
as dividend income to the extent paid or deemed paid out of our current or accumulated earnings and profits as calculated for U.S. federal
income tax purposes. You must include the gross amount treated as a dividend in income in the year the dividend is paid to you. Cash
dividends paid on our ordinary shares will be taxable at ordinary U.S. federal income tax rates. Dividends paid on our ordinary shares
do not qualify for the lower rates of federal income tax applicable to non-corporate U.S. holders because our shares are currently quoted
only on the OTC Bulletin Board and are not treated as readily tradable on an established securities market in the United States.
To
the extent that any distributions paid exceed our current and accumulated earnings and profits as calculated for U.S. federal income
tax purposes, the distribution will be treated as follows:
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First, as a tax-free return of capital to the extent
of your basis (determined for U.S. federal income tax purposes) in your ordinary shares which will reduce your adjusted tax basis
of your ordinary shares. This adjustment will increase the amount of gain, or decrease the amount of loss, which you will recognize
if you later dispose of those ordinary shares.
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Second, the balance of the distribution in excess of
your adjusted tax basis will be taxed as capital gain.
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Dividends
paid by us will not give rise to any dividends-received deduction generally allowed to a U.S. corporation under Section 243 of the Internal
Revenue Code of 1986, as amended (the “Code”).
Taxation
of Capital Gains
In
general, for U.S. federal income tax purposes, you will recognize capital gain or loss if you sell or otherwise dispose of your ordinary
shares based on the difference between the amount realized on the disposition and your adjusted tax basis in the ordinary shares. Any
gain or loss generally will be U.S. source gain or loss. If you are a non-corporate holder, and you satisfy certain minimum holding period
requirements, any capital gain generally will be treated as long-term capital gain that generally is subject to U.S. federal income tax
at preferential rates under current law. Long-term capital gains realized upon a sale or other disposition of the ordinary shares generally
will be subject to U.S. federal income tax at the rate of 15%, increased to 20% on taxpayers with taxable income exceeding certain thresholds.
Unearned
Income Medicare Tax
A
3.8% Medicare contribution tax will generally apply to all or some portion of net investment income of a U.S. holder that is an individual
with adjusted gross income that exceeds a threshold amount. Net investment income includes dividend income and realized capital gains.
U.S.
Information Reporting and Backup Withholding
In
general, if you are a non-corporate U.S. holder of our ordinary shares (or do not come within certain other exempt categories), information
reporting requirements will apply to distributions paid to you and proceeds from the sale, exchange redemption or disposal of your ordinary
shares. U.S. holders that are corporations generally are excluded from these information reporting and backup withholding tax rules.
Additionally,
if you are a non-corporate U.S. holder of our ordinary shares (or do not come within certain other exempt categories) you may be subject
to backup withholding at the current applicable rate with respect to such payments, unless you provide a correct taxpayer identification
number (your social security number or employer identification number), and with respect to dividend payments, certify that you are not
subject to backup withholding and otherwise comply with applicable requirements of the backup withholding rules. Generally, you will
be required to provide such certification on Internal Revenue Service Form W-9 (“Request for Taxpayer Identification Number and
Certification) or a substitute Form W-9.
If you do not provide your correct taxpayer identification
number, you may be subject to penalties imposed by the Internal Revenue Service, as well as backup withholding. Backup withholding is
not an additional tax. In general, any amount withheld under the backup withholding rules should be allowable as a credit against your
U.S. federal income tax liability (which might entitle you to a refund), provided that you timely furnish the required information to
the Internal Revenue Service.
Disclosure of Information with Respect to Foreign
Financial Assets
Certain U.S. holders are required to report information
with respect to their investment in our ordinary shares not held through a custodial account with a U.S. financial institution to the
Internal Revenue Service. In general, U.S. taxpayers holding specified “foreign financial assets” (which generally would include
our ordinary shares) with an aggregate value exceeding $50,000 will report information about those assets on new IRS Form 8938, which
must be attached to the taxpayer’s annual income tax return. Higher asset thresholds apply to U.S. taxpayers who file a joint tax
return or who reside abroad. Investors who fail to report required information could become subject to substantial penalties. You should
consult your own tax advisor concerning the effect, if any, of holding your ordinary shares on your obligation to file new Form 8938.
U.S. State and Local Taxes
In addition to U.S. federal income tax, you may
be subject to U.S. state and local taxes with respect to your ordinary shares. You should consult your own tax advisor concerning the
U.S. state and local tax consequences of holding your ordinary shares.
Passive Foreign Investment Company
In general, we would be treated as a PFIC for
any taxable year in which either (1) at least 75% of our gross income (looking through certain 25% or more-owned corporate subsidiaries)
is passive income or (2) at least 50% of the average value of our assets (looking through certain 25% or more-owned corporate subsidiaries)
is attributable to assets that produce, or are held for the production of, passive income. Passive income generally includes, without
limitation, dividends, interest, rents, royalties, and gains from the disposition of passive assets.
If we were a PFIC for any taxable year during
which a taxable U.S. holder held ordinary shares, gain recognized by the U.S. holder on a sale or other disposition (including certain
pledges) of the ordinary shares would be allocated ratably over the U.S. holder’s holding period for the ordinary shares. The amounts
allocated to the taxable year of the sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income.
The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations,
as appropriate, for that taxable year, and an interest charge would be imposed on the amount allocated to that taxable year. Further,
to the extent that any distribution received by a U.S. holder on its ordinary shares exceeds 125% of the average of the annual distributions
on the ordinary shares received during the preceding three years or the U.S. holder’s holding period, whichever is shorter, that
distribution (an “excess distribution”) would be subject to taxation in the same manner as gain, described immediately above.
Certain elections may be available that would result in alternative treatments (such as mark-to-market treatment) of the ordinary shares.
In addition, each U.S. holder of a PFIC is required to file an annual report containing such information as the U.S. Department of the
Treasury may require. If we were classified as a PFIC in any year with respect to which a U.S. holder owns ordinary shares, we would continue
to be treated as a PFIC with respect to the U.S. holder in all succeeding years during which the U.S. holder owns ordinary shares, regardless
of whether we continue to meet the tests described above. However, if we ceased to be a PFIC, a U.S. holder of our ordinary shares could
avoid some of the adverse effects of the PFIC regime by making a deemed sale election with respect to our ordinary shares.
A U.S. holder that owns (or is deemed to own)
shares in a PFIC during any taxable year of the U.S. holder, may have to file an IRS Form 8621 (whether or not a QEF or mark-to market
election is made) and such other information as may be required by the U.S. Treasury Department.
As a result of the disposition of all of our shareholdings
in Plastec in October 2016 and based on the expected composition (and estimated values) of the assets and the nature of the income of
us and our subsidiaries and our current plans of operation, we are expected to be treated as a PFIC. However, our actual PFIC status for
any taxable year will not be determinable until after the end of such taxable year. Accordingly, there can be no assurance with respect
to our status as a PFIC for our current taxable year or any subsequent taxable year. We urge U.S. investors to consult their own tax advisors
regarding the possible application of the PFIC rules.
ENFORCEABILITY OF CIVIL LIABILITIES
We are a Cayman Islands exempted company and all
of our executive offices are located outside of the United States in the People’s Republic of China. Most of our directors, officers
and some of the experts named in this prospectus reside outside the United States. In addition, substantially all of our assets and the
assets of our directors, officers and experts are located outside of the United States. As a result, you may have difficulty serving legal
process within the United States upon us or any of these persons. You may also have difficulty enforcing, both in and outside the United
States, judgments you may obtain in U.S. courts against us or these persons in any action, including actions based upon the civil liability
provisions of U.S. federal or state securities laws.
Furthermore, there is substantial doubt that the
courts of the Cayman Islands or the People’s Republic of China would enter judgments in original actions brought in those courts
predicated on U.S. federal or state securities laws.
Jingtian & Gongcheng, our counsel as to Chinese
law, has advised us that there is uncertainty as to whether the courts of China would (1) recognize or enforce judgments of United States
courts obtained against us or such persons predicated upon the civil liability provisions of the securities laws of the United States
or any state thereof, or (2) be competent to hear original actions brought in each respective jurisdiction, against us or such persons
predicated upon the securities laws of the United States or any state thereof.
Jingtian & Gongcheng has advised us that the
recognition and enforcement of foreign judgments are provided for under the Civil Procedure Law of the PRC. Chinese courts may recognize
and enforce foreign judgments in accordance with the requirements of the Civil Procedure Law of the PRC based either on treaties between
China and the country where the judgment is made or in reciprocity between jurisdictions. China does not have any treaties or other agreements
with the Cayman Islands or the United States that provide for the reciprocal recognition and enforcement of foreign judgments. As a result,
it is uncertain whether a Chinese court would enforce a judgment rendered by a court in either of these two jurisdictions.
Maples and Calder (Cayman) LLP, our counsel as
to Cayman Islands law, has informed us that the uncertainty with regard to Cayman Islands law relates to whether a judgment obtained from
the U.S. courts under civil liability provisions of U.S. securities laws will be determined by the courts of the Cayman Islands as penal
or punitive in nature. If such a determination is made, the courts of the Cayman Islands will not recognize or enforce the judgment against
a Cayman Islands company, such as our company. As the courts of the Cayman Islands have yet to rule on making such a determination in
relation to judgments obtained from U.S. courts under civil liability provisions of U.S. securities laws, it is uncertain whether such
judgments would be enforceable in the Cayman Islands. Maples and Calder (Cayman) LLP has further advised us that the courts of the Cayman
Islands would recognize as a valid judgment a final and conclusive judgment in personam obtained in the federal or state courts in the
United States under which a sum of money is payable (other than a sum of money payable in respect of multiple damages, taxes or other
charges of a like nature or in respect of a fine or other penalty) and would give a judgment based thereon provided that: (a) such courts
had proper jurisdiction over the parties subject to such judgment; (b) such courts did not contravene the rules of natural justice of
the Cayman Islands; (c) such judgment was not obtained by fraud; (d) the enforcement of the judgment would not be contrary to the public
policy of the Cayman Islands; (e) no new admissible evidence relevant to the action is submitted prior to the rendering of the judgment
by the courts of the Cayman Islands; and (f) there is due compliance with the correct procedures under the laws of the Cayman Islands.
The Cayman Islands does not have a treaty or other agreement with the United States that provides for the reciprocal recognition and enforcement
of foreign judgments.
EXPENSES RELATED TO THIS OFFERING
Set forth below is an itemization of the total
expenses that we have incurred or expect to incur in connection with this distribution. All amounts are estimated except the SEC registration
fee.
|
SEC registration fee
|
$
|
13,842.89
|
|
|
Legal fees and expenses
|
|
55,000.00
|
|
|
Accounting fees and expenses
|
|
12,500.00
|
|
|
Printing fees and expenses
|
|
55,000.00
|
|
|
Miscellaneous
|
|
6,157.11
|
|
|
Total
|
$
|
142,500.00
|
|
LEGAL MATTERS
The validity of the securities offered in this
prospectus is being passed upon for us by Maples and Calder (Cayman) LLP, Cayman Islands, on matters of Cayman Islands law. Graubard Miller,
New York, New York is acting as our United States securities counsel in connection with this offering. Certain legal matters as to PRC
law will be passed upon for us by Jingtian & Gongcheng.
EXPERTS
The consolidated financial statements of Plastec
Technologies, Ltd. and its subsidiaries for the years ended December 31, 2020, 2019 and 2018 in this prospectus have been audited by Centurion
ZD CPA & Co., an independent registered public accountant, as indicated in its report with respect thereto, and is included herein
in reliance upon the authority of said firm as experts in accounting and auditing in giving the said report. Centurion ZD CPA & Co.
is located at Unit 1304, 13th Floor, Two Habourfront, 22 Tak Fung Street, Hunghom Hong Kong.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement
on Form F-1 relating to the securities being offered through this prospectus. As permitted by the rules and regulations of the SEC, the
prospectus does not contain all the information described in the registration statement. For further information about us and our securities,
you should read our registration statement, including any and all supplements, amendments, exhibits and schedules thereto. In addition,
we are subject to the requirements of the Securities Exchange Act of 1934, as amended, and file reports and other information with the
SEC. These SEC filings and the registration statement are available to you over the Internet at the SEC’s website at http://www.sec.gov/.
Statements contained in this prospectus as to the contents of any agreement or other document are not necessarily complete and, in each
instance, you should review the agreement or document which has been filed as an exhibit to the registration statement.
The SEC allows us to incorporate by reference
the information we file with it, which means that we can disclose important information to you by referring you to those documents. This
prospectus incorporates by reference our documents listed below:
|
|
●
|
our annual report on Form 20-F filed with the SEC on May 14, 2021; and
|
|
|
|
|
|
|
●
|
our registration statement on Form 8-A (No. 000-53826) filed with the SEC on November 5, 2009, registering our ordinary shares, units, and warrants pursuant to Section 12(g) of the Exchange Act.
|
Notwithstanding the foregoing, we are not incorporating
any document or portion thereof or information deemed to have been furnished and not filed in accordance with SEC rules. Any statement
contained in a document incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus
to the extent that a statement contained herein modifies or supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this prospectus.
We will provide to each person, including any
beneficial owner, to whom a prospectus is delivered, a copy of any or all of the reports or documents that have been incorporated by reference
in the prospectus contained in the registration statement not delivered with the prospectus. We will provide these reports or documents
upon written or oral request at no cost to the requester. Requests for such documents should be made to Plastec Technologies, Ltd., Attn:
Kin Sun Sze To, Chief Executive Officer, c/o Unit 01, 21/F, Aitken Vanson Centre, 61 Hoi Yuen Road, Kwun Tong, Kowloon, Hong Kong. Such
documents may also be accessed free of charge on our website at www.plastec.com.hk.
PLASTEC TECHNOLOGIES, LTD.
Consolidated Financial Statements
For the Years Ended December 31, 2020, 2019
And 2018
CONTENT
|
中正達會計師事務所
Centurion ZD CPA & Co.
Certified Public Accountants (Practising)
|
Unit 1304, 13/F, Two Harbourfront, 22 Tak Fung
Street, Hunghom, Hong Kong.
香港 紅磡 德豐街22號 海濱廣場二期
13樓1304室
Tel 電話: (852) 2126 2388 Fax 傳真: (852) 2122 9078
Email 電郵: info@czdcpa.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of
Plastec Technologies, Ltd.
Opinion on the Financial Statements
We have audited the accompanying consolidated
balance sheets of Plastec Technologies, Ltd. and its subsidiaries (the "Company") as of December 31, 2020 and 2019, the related
consolidated statements of operations and comprehensive income, shareholders’ equity and cash flows, for each of the three years
in the period ended December 31, 2020, and the related notes (collectively referred to as the "consolidated financial statements").
In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of
the Company as of December 31, 2020 and 2019, and the consolidated results of its operations and its cash flows for each of the three
years in the period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our
audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB")
and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the
standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated
financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding
of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal
control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess
the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable
basis for our opinion.
|
|
中正達會計師事務所
Centurion ZD CPA & Co.
Certified Public Accountants (Practising)
|
Unit 1304, 13/F, Two Harbourfront, 22 Tak Fung
Street, Hunghom, Hong Kong.
香港 紅磡 德豐街22號 海濱廣場二期
13樓1304室
Tel 電話: (852) 2126 2388 Fax 傳真: (852) 2122 9078
Email 電郵: info@czdcpa.com
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (CONTINUED)
Critical Audit Matters
Critical audit matters are matters arising from
the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee
and that: (1) related to accounts or disclosures that were material to the consolidated financial statements and (2) involved our especially
challenging, subjective, or complex judgments. We determined that there are no critical audit matters.
/s/ Centurion ZD CPA & Co.
Certified Public Accountants
Hong Kong, China
April 29, 2021.
We have served as the Company's auditor since 2012
PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED BALANCE SHEETS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
185,530
|
|
|
|
182,697
|
|
|
Deposits, prepayment and other receivables (note 4)
|
|
|
1,754
|
|
|
|
2,450
|
|
|
Total current assets
|
|
|
187,284
|
|
|
|
185,147
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net (note 5)
|
|
|
423
|
|
|
|
60
|
|
|
Intangible assets
|
|
|
438
|
|
|
|
438
|
|
|
Total assets
|
|
|
188,145
|
|
|
|
185,645
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Other payables and accruals (note 6)
|
|
|
1,341
|
|
|
|
1,569
|
|
|
Tax payable
|
|
|
9,407
|
|
|
|
10,186
|
|
|
Total current liabilities
|
|
|
10,748
|
|
|
|
11,755
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
|
|
|
10,748
|
|
|
|
11,755
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (note 9)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
Ordinary shares (U.S.$0.001 par value; 100,000,000 authorized, 12,938,128 and 12,938,128 shares issued and outstanding as of December 31 2019 and 2020, respectively)
|
|
|
101
|
|
|
|
101
|
|
|
Additional paid-in capital
|
|
|
26,049
|
|
|
|
26,049
|
|
|
Accumulated other comprehensive income
|
|
|
(30
|
)
|
|
|
(30
|
)
|
|
Retained earnings
|
|
|
151,277
|
|
|
|
147,770
|
|
|
Total shareholders’ equity
|
|
|
177,397
|
|
|
|
173,890
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and shareholders’ equity
|
|
|
188,145
|
|
|
|
185,645
|
|
See accompanying notes to consolidated financial
statements.
PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
|
|
|
Year ended December 31,
|
|
|
Year ended December 31,
|
|
|
Year ended December 31,
|
|
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
Revenues
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income/(expenses), net
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on disposal of a subsidiary
|
|
|
-
|
|
|
|
-
|
|
|
|
29
|
|
|
Selling, general and administrative expenses
|
|
|
(4,554
|
)
|
|
|
(15,083
|
)
|
|
|
(3,882
|
)
|
|
Other income
|
|
|
9,954
|
|
|
|
-
|
|
|
|
7
|
|
|
Total operating income/ (expenses), net
|
|
|
5,400
|
|
|
|
(15,083
|
)
|
|
|
(3,846
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income/(loss) from operations
|
|
|
5,400
|
|
|
|
(15,083
|
)
|
|
|
(3,846
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
3,082
|
|
|
|
3,297
|
|
|
|
1,118
|
|
|
Income/(loss) before income tax expense
|
|
|
8,482
|
|
|
|
(11,786
|
)
|
|
|
(2,728
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense from continuing operations (note 7)
|
|
|
(2,435
|
)
|
|
|
(729
|
)
|
|
|
(779
|
)
|
|
Net income/(loss) from continuing operations attributable to the Company’s shareholders
|
|
|
6,047
|
|
|
|
(12,515
|
)
|
|
|
(3,507
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations (note 3):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from discontinued operations (including gain of 2020: HK$Nil, 2019: HK$47,845, 2018: HK$171,809) upon disposals)
|
|
|
171,927
|
|
|
|
53,364
|
|
|
|
-
|
|
|
Income tax expenses from discontinued operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income from discontinued operations attributable to the Company’s shareholders
|
|
|
171,927
|
|
|
|
53,364
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) attributable to the Company’s shareholders
|
|
|
177,974
|
|
|
|
40,849
|
|
|
|
(3,507
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Discontinued operations
|
|
|
6,674
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
6,674
|
|
|
|
-
|
|
|
|
-
|
|
|
Comprehensive income/(loss) attributable to the Company’s shareholders
|
|
|
184,648
|
|
|
|
40,849
|
|
|
|
(3,507
|
)
|
See accompanying notes to consolidated financial
statements.
PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME (CONTINUED)
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
|
|
|
Year ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
Net income/(loss) per share (note 8):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
Discontinued operations
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of diluted ordinary shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
Discontinued operations
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic net income/(loss) per share attributable from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
HK$0.47
|
|
|
|
HK$(0.97)
|
|
|
|
HK$(0.27)
|
|
|
Discontinued operations
|
|
|
HK$13.29
|
|
|
|
HK$4.13
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted net income/(loss) per share attributable from
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operations
|
|
|
HK$0.47
|
|
|
|
HK$(0.97)
|
|
|
|
HK$(0.27)
|
|
|
Discontinued operations
|
|
|
HK$13.29
|
|
|
|
HK$4.13
|
|
|
|
-
|
|
See accompanying notes to consolidated financial
statements.
PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED
STATEMENTS OF SHAREHOLDERS’ EQUITY
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
|
|
|
Ordinary shares
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
Number of
shares
outstanding
|
|
|
Amount
|
|
|
Additional
paid-in
capital
|
|
|
other
comprehensive
income
|
|
|
Retained
earnings
|
|
|
Shareholders’
equity
|
|
|
|
|
|
|
|
HK$
|
|
|
HK$
|
|
|
HK$
|
|
|
HK$
|
|
|
HK$
|
|
|
Balance at January 1, 2018
|
|
|
12,938,128
|
|
|
|
101
|
|
|
|
26,049
|
|
|
|
(6,704
|
)
|
|
|
749,884
|
|
|
|
769,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
177,974
|
|
|
|
177,974
|
|
|
Dividend paid
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(403,669
|
)
|
|
|
(403,669
|
)
|
|
Reclassification adjustment relating to exchange difference upon disposals of interests in subsidiaries
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
6,674
|
|
|
|
-
|
|
|
|
6,674
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2018 and
January 1, 2019
|
|
|
12,938,128
|
|
|
|
101
|
|
|
|
26,049
|
|
|
|
(30
|
)
|
|
|
524,189
|
|
|
|
550,309
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
40,849
|
|
|
|
40,849
|
|
|
Dividend paid
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(413,761
|
)
|
|
|
(413,761
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2019 and January 1, 2020
|
|
|
12,938,128
|
|
|
|
101
|
|
|
|
26,049
|
|
|
|
(30
|
)
|
|
|
151,277
|
|
|
|
177,397
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,507
|
)
|
|
|
(3,507
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2020
|
|
|
12,938,128
|
|
|
|
101
|
|
|
|
26,049
|
|
|
|
(30
|
)
|
|
|
147,770
|
|
|
|
173,890
|
|
See accompanying notes to consolidated financial
statements.
PLASTEC TECHNOLOGIES, LTD.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
|
|
|
Year ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
Operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income / (loss)
|
|
|
177,974
|
|
|
|
40,849
|
|
|
|
(3,507
|
)
|
|
Less: Net income from discontinued operations
|
|
|
(171,927
|
)
|
|
|
(53,364
|
)
|
|
|
-
|
|
|
Net income/(loss) from continuing operations
|
|
|
6,047
|
|
|
|
(12,515
|
)
|
|
|
(3,507
|
)
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortisation
|
|
|
363
|
|
|
|
363
|
|
|
|
363
|
|
|
Gain on disposal of a subsidiary
|
|
|
-
|
|
|
|
-
|
|
|
|
(29
|
)
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits, prepayment and other receivables
|
|
|
(310
|
)
|
|
|
(70
|
)
|
|
|
(696
|
)
|
|
Other payables and accruals
|
|
|
(221
|
)
|
|
|
565
|
|
|
|
228
|
|
|
Tax payables
|
|
|
2,435
|
|
|
|
729
|
|
|
|
779
|
|
|
Net cash provided by/(used in) continuing operations
|
|
|
8,314
|
|
|
|
(10,928
|
)
|
|
|
(2,862
|
)
|
|
Net cash provided by discontinued operations
|
|
|
17,168
|
|
|
|
11,987
|
|
|
|
-
|
|
|
Net cash provided by/(used in) operating activities
|
|
|
25,482
|
|
|
|
1,059
|
|
|
|
(2,862
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash inflow from disposals of subsidiaries (net of cash disposed of HK$27 for the year 2020, HK$93 for the year 2019 and HK$49,666 for the year 2018)
|
|
|
350,655
|
|
|
|
325,413
|
|
|
|
29
|
|
|
Net cash provided by continuing operations
|
|
|
350,655
|
|
|
|
325,413
|
|
|
|
29
|
|
|
Net cash used in discontinued operations
|
|
|
(101,410
|
)
|
|
|
-
|
|
|
|
-
|
|
|
Net cash provided by investing activities
|
|
|
249,245
|
|
|
|
325,413
|
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing activity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends paid
|
|
|
(403,669
|
)
|
|
|
(413,761
|
)
|
|
|
-
|
|
|
Net cash used in continuing operations
|
|
|
(403,669
|
)
|
|
|
(413,761
|
)
|
|
|
-
|
|
|
Net cash used in financing activity
|
|
|
(403,669
|
)
|
|
|
(413,761
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents
|
|
|
(128,942
|
)
|
|
|
(87,289
|
)
|
|
|
(2,833
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes
|
|
|
6,674
|
|
|
|
-
|
|
|
|
-
|
|
|
Cash and cash equivalents, beginning of year
|
|
|
395,087
|
|
|
|
272,819
|
|
|
|
185,530
|
|
|
Cash and cash equivalents, end of year
|
|
|
272,819
|
|
|
|
185,530
|
|
|
|
182,697
|
|
|
Less: cash and cash equivalents from discontinued operations
|
|
|
(69
|
)
|
|
|
-
|
|
|
|
-
|
|
|
Cash and cash equivalents, end of year from continuing operations
|
|
|
272,750
|
|
|
|
185,530
|
|
|
|
182,697
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
3,082
|
|
|
|
3,297
|
|
|
|
1,118
|
|
|
Income taxes paid
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consideration receivable
|
|
|
165,506
|
|
|
|
-
|
|
|
|
-
|
|
See accompanying notes to consolidated financial
statements.
PLASTEC TECHNOLOGIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
1. Organization
and Business Background
Plastec Technologies, Ltd. (“Company”)
(formerly known as “GSME Acquisition Partners I”), incorporated under the laws of Cayman Islands on March 27, 2008, and its
subsidiaries (where the context permits, references to the “Company” below shall include references to its subsidiaries (collectively
as the “Group”)) had principally been engaged in the provision of integrated plastic manufacturing services from mold design
and fabrication, plastic injection manufacturing to secondary-process finishing as well as parts assembly. The
Group’s manufacturing activities had been performed in the People’s Republic of China (the “PRC” or “China”)
and Thailand during the years through October 11, 2016. The selling and administrative activities had mainly been performed in China.
On November 14, 2015, the Company entered
into a Share Transfer Agreement (the “Agreement”) with Shanghai Yongli Belting Co., Ltd. (“SYB”) and its wholly-owned
subsidiary, Shanghai Yongjing Investment Management Co., Ltd. (“SYIM”). Pursuant to the Agreement, SYIM was to purchase, through
a wholly-owned Hong Kong subsidiary (the “HK Subsidiary”), the entirety of the Company’s shareholding interests in its
then wholly-owned subsidiary, Plastec International Holdings Limited (“PIHL”) alongside the latter’s subsidiaries (collectively,
“PIHL Group”), for an aggregate purchase price of RMB 1,250,000,000 (or US$195,312,500 equivalent, adopting the exchange rate
when the transaction was first reported), in cash (the “Transfer Price”) subject to terms and conditions thereof.
The disposal of PIHL was completed
on October 11, 2016. As a result, the Company no longer owns PIHL. Thereafter, the Group’s only operations have generally been to
complete construction of a manufacturing plant at Kai Ping, China which was disposed of and transferred to PIHL upon its establishment
on April 20, 2018 as described below, collect rental income from certain property the Group used to own and which was being leased to
one of PIHL’s subsidiaries until November 2019 when the former subsidiary of the Company that held the property was disposed of
to an unaffiliated third party as described below and explore other investment opportunities.
In accordance with the terms and spirit
of the Agreement, the Company caused Viewmount Developments Limited (a wholly owned subsidiary of the Company, “Viewmount”),
to enter into a Share Transfer Agreement with PIHL (a wholly owned subsidiary of SYB since October 11, 2016) on March 30, 2018 (the “Manufacturing
Plant Transfer Agreement”), pursuant to the terms and conditions of which Viewmount was to transfer the ownership interests in certain
of its former subsidiaries holding the newly established manufacturing plant in Kai Ping, China through their PRC subsidiaries to PIHL
for a total consideration of approximately HK$70, representing the actual registered capital injected by Viewmount into the relevant subsidiaries.
On April 20, 2018, the parties consummated the transactions contemplated by the Manufacturing Plant Transfer Agreement. The parties also
settled all accounts payable owed by the relevant subsidiaries to Viewmount totaling HK$258,910.
On
November 15, 2019, Viewmount entered into an agreement (the “Assets Disposal Agreement”) with an unaffiliated third party
(the “Purchaser”), pursuant to which Viewmount was to transfer the ownership interests in its then wholly-owned subsidiary
holding the right to use certain parcels of land in Shenzhen together with premises built thereon to the Purchaser for HK$47,965 in cash,
net of all relevant expenses, charges and taxes. On November 20, 2019, the parties consummated the transactions
contemplated by the Assets Disposal Agreement; on which date Viewmount also received from the Purchaser HK$112,035 representing all amounts
due from the former subsidiary disposed of.
The aforesaid disposals represented
a strategic shift and had a major effect on the Group’s results of operations. Accordingly, assets and liabilities, revenues and
expenses, and cash flows related to the disposed business lines have been reclassified in the accompanying consolidated financial statements
as discontinued operations for all periods presented. The consolidated balance sheets as of December 31, 2018 (note 3), the consolidated
statements of operations and comprehensive income and the consolidated statements of cash flows for the years ended December 31, 2018
have likewise been adjusted retrospectively to reflect this strategic shift.
On June 29, 2020, the Company disposed
of its wholly-owned dormant subsidiary, Allied Sun Corporation Limited, with a negative net worth of approximated HK$1.6 to an unaffiliated
third party purchaser for HK$27.
As of December 31, 2020, details of
the Company’s subsidiaries are as follows:
|
Name
|
|
Date of
incorporation/
establishment
|
|
Place of
incorporation/
registration and
operation
|
|
Percentage of
equity interest
attributable to
the Company
|
|
Principal activities
|
Sun Line Industrial Limited
新麗工業有限公司
|
|
April 27, 1993
|
|
Hong Kong
|
|
100%
|
|
Dormant
|
|
|
|
|
|
|
|
|
|
|
|
Sun Ngai Spraying and Silk Print Co., Ltd.
|
|
July 25, 1995
|
|
BVI
|
|
100%
|
|
Dormant
|
|
|
|
|
|
|
|
|
|
|
|
Sun Terrace Industries Limited
|
|
March 2, 2004
|
|
BVI
|
|
100%
|
|
Dormant
|
|
|
|
|
|
|
|
|
|
|
|
Viewmount Developments Limited
|
|
November 12, 2013
|
|
BVI
|
|
100%
|
|
Investment holding
|
PLASTEC TECHNOLOGIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
1. Organization
and Business Background (Continued)
History and Background -The Merger
Transaction with Plastec International Holdings Limited
On March 27, 2008, the Company was
established as a special purpose acquisition company whose objective was to consummate an acquisition, capital stock exchange, asset acquisition,
stock purchase, reorganization or similar business combination with one or more businesses located in the PRC.
On August 6, 2010, the Company entered
into an Agreement and Plan of Reorganization (the “Merger Agreement”) with GSME Acquisition Partners I Sub Limited (“GSME
Sub”), PIHL and all former shareholders of PIHL (“PIHL Shareholders”) (together, the “Parties”). Upon the
consummation of the transactions contemplated by the Merger Agreement, GSME Sub was to be merged with and into PIHL, with PIHL surviving
as a wholly-owned subsidiary of the Company (the “Merger”). The PIHL Shareholders were then entitled to receive up to an aggregate
of 16,948,053 ordinary shares, par value U.S.$0.001 per share, of the Company.
On September 13, 2010, in connection
with the Merger, the Parties entered into an Amended and Restated Agreement and Plan of Reorganization (the “Amended and Restated
Merger Agreement”) to, amongst other matters, revise the terms of the merger consideration to be paid to the PIHL Shareholders.
Pursuant to the Amended and Restated Merger Agreement, upon consummation of the Merger, the PIHL Shareholders became entitled to receive
up to an aggregate of 16,778,571 ordinary shares of the Company, of which 7,054,583 shares were issued to the PIHL Shareholders on the
closing of the Merger and the remaining of up to 9,723,988 shares (2,944,767, 3,389,610 and 3,389,611 shares for 2011, 2012 and 2013 respectively)
(the “Earnout Shares”) would have been issued to the PIHL Shareholders, if PIHL had net income as defined in the Amended and
Restated Merger Agreement in the following amounts for the indicated years ending April 30 below:
|
Year ending April 30,
|
|
Net Income
|
|
|
|
HK$
|
|
2011
|
|
130,700
|
|
2012
|
|
176,000
|
|
2013
|
|
250,000
|
At the Special Meeting held on December
10, 2010, the merger proposal was approved by the shareholders. On December 16, 2010, the Company consummated the transactions contemplated
by the Amended and Restated Merger Agreement, pursuant to which, amongst other things, PIHL became a wholly owned subsidiary of the Company
(the “Merger Transaction”). The Merger Transaction was accounted for as a reverse acquisition with PIHL being considered the
accounting acquirer in the Merger.
The completion of the Merger enabled
the PIHL Shareholders to obtain a majority voting interest in the Company. Generally accepted accounting principles in the United States
require that a company whose shareholders retain the majority interest in a combined business be treated as the acquirer for accounting
purposes. Accordingly, the aforementioned Merger Transaction was accounted for as a reverse acquisition of a private operating company
(PIHL) with a non-operating public company (the Company) with significant amount of cash. The reverse acquisition process utilized the
capital structure of the Company and the assets and liabilities of PIHL were recorded at historical cost. The transaction was recorded
as a recapitalization of PIHL and thus was reflected retrospectively in PIHL’s historical financial statements. Although PIHL was
deemed to be the accounting acquirer for financial accounting and reporting purposes, the legal status of PIHL as the surviving company
did not change.
PLASTEC TECHNOLOGIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
1. Organization
and Business Background - Continued
Under the reverse acquisition accounting,
the historical consolidated financial statements of the Company for the periods prior to December 16, 2010 were those of PIHL and its
subsidiaries. Since PIHL was deemed as accounting acquirer, PIHL’s fiscal year replaced the Company’s fiscal year. The fiscal
year end changed from October 31 to April 30. The financial statements of the Company reflected the aforementioned Merger Transaction
in the consolidated statements of shareholders’ equity through a line of “Recapitalization in connection with the reverse
merger” to present the net assets of the Company as of December 16, 2010. The net assets of the Company as of December 16, 2010
were as follows:
|
Net assets acquired:
|
|
HK$
|
|
|
Cash
|
|
|
58,160
|
|
|
Accounts payable and accrued liabilities
|
|
|
(1,524
|
)
|
|
|
|
|
|
|
|
|
|
|
56,636
|
|
On April 30, 2011, the Parties entered
into an amendment to the Amended and Restated Merger Agreement to remove the provisions of Earnout Shares and issued an aggregate of 7,486,845
ordinary shares of the Company to the PIHL Shareholders on April 30, 2011.
Purchase of securities by the
issuer
Prior to November 2011, the Company
had no plans or programs for the purchase of its outstanding securities. However, in connection with the Merger, holders of 2,615,732
of the Company public shares elected to exercise their conversion rights (for a description of these rights, see the IPO Prospectus and
the Merger Proxy Statement) and, upon the closing of the Merger, such shares were converted into an average U.S. $10.30 (including proceeds
that were originally to be from a letter of credit provided by Cohen & Company Securities, LLC but were ultimately paid by Company)
in cash and were cancelled. Under Cayman Islands law, such conversions are technically considered “repurchases.”
In
November 2011, the board of directors of Company approved a U.S.$5 million share repurchase program expiring initially in June 2012 but
which was extended twice through December 2013 and expanded to cover publicly held warrants (“2011 Repurchase Program”). Under
the 2011 Repurchase Program, the Company was permitted to make repurchases of ordinary shares and publicly held warrants from time to
time in open market or in privately negotiated transactions. The timing of repurchases under this program was dependent on a variety
of factors, including price and market conditions prevailing from time to time. The 2011 Repurchase Program was completed on September
25, 2013. On the same date, the Company announced a new U.S.$5 million repurchase plan (“2013 Repurchase Program”) approved
by the board of directors of the Company to cover repurchases of ordinary shares and publicly held warrants from time to time in open
market or in privately negotiated transactions through September 25, 2014. In May 2014, the Company announced expansion of the
scope of the 2013 Repurchase Program to include the Company’s units, with all other terms of the 2013 Repurchase Program remained
unchanged. In August 2014, the Company announced a 12-month extension of the 2013 Repurchase Program (as expanded) through September 25,
2015. In August 2015, the Company announced a further 12-month extension of the 2013 Repurchase Program (as expanded) through September
25, 2016, under which period, all warrants, insider or public, expired on November 18, 2014. In August 2016, the Company announced a further
12-month extension of the 2013 Repurchase Program (as expanded) through September 25, 2017. On August 9, 2017, the Company announced a
further 12-month extension of the 2013 Repurchase Program (as expanded) through September 25, 2018. On August 17, 2018, the Company announced
a further 12-month extension of the 2013 Repurchase Program (as expanded) through September 25, 2019. On August 26, 2019, the Company
announced a further 12-month extension of the 2013 Repurchase Program (as expanded) through September 25, 2020. On August 20, 2020, the
Company announced a further 12-month extension of the 2013 Repurchase Program (as expanded) through September 25, 2021. The
timing of repurchases under the 2013 Repurchase Program will depend on a variety of factors, including price and market conditions prevailing
from time to time, and the program may be suspended, modified or discontinued without notice at any time.
PLASTEC TECHNOLOGIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
1. Organization
and Business Background - Continued
The following table summarizes the
Company’s repurchases of securities under the 2011 and 2013 Repurchase Programs:
|
Period*
|
|
|
Total number of
publicly held
warrants purchased as
part of the publicly
announced
repurchase plans
|
|
|
Total number of
ordinary shares
purchased as part of
the publicly
announced repurchase
plans
|
|
|
Total number of units
purchased as part of the
publicly announced
repurchase plans
|
|
|
February 2012
|
|
|
|
-
|
|
|
|
4,000
|
|
|
|
-
|
|
|
June 2012
|
|
|
|
-
|
|
|
|
60,675
|
|
|
|
-
|
|
|
January 2013
|
|
|
|
-
|
|
|
|
600,000
|
|
|
|
-
|
|
|
June 2013
|
|
|
|
80,000
|
|
|
|
94,100
|
|
|
|
-
|
|
|
August 2013
|
|
|
|
5,000
|
|
|
|
-
|
|
|
|
-
|
|
|
September 2013
|
|
|
|
-
|
|
|
|
73,990
|
|
|
|
-
|
|
|
October 2013
|
|
|
|
-
|
|
|
|
586,010
|
|
|
|
-
|
|
|
August 2014
|
|
|
|
547,600
|
|
|
|
-
|
|
|
|
-
|
|
* Each period covers the full calendar
month indicated. There were no repurchases made in omitted months. Repurchases for September 2013 and earlier months were under the 2011
Repurchase Program. Repurchases for October 2013 onward were under the 2013 Repurchase Program. As of the date hereof, the approximate
dollar value of securities that may be purchased under the Company’s current repurchase program stood at U.S.$1,431,918.
In addition to the purchases made pursuant
to the 2011 and 2013 Repurchase Programs, the Company also repurchased 1,570,000 ordinary shares held by Sun Yip Industrial Company Limited,
an entity controlled by Mr. Sze-To, pursuant to a purchase agreement on December 1, 2011 at a price of U.S.$7.5 per share or approximately
U.S.$11.8 million in cash, which shares were cancelled.
Further, pursuant to the mandatory
redemption terms of an escrow agreement (as amended on December 16, 2011), a total of 806,293 ordinary shares held in escrow on account
of the Company’s initial shareholders were automatically repurchased by the Company at the close of business on March 16, 2012 for
an aggregate consideration of U.S.$0.01, which redeemed shares were likewise cancelled.
2. Summary
of Significant Accounting Policies
Principles of consolidation
The consolidated financial statements,
prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”), include
the assets, liabilities, revenues, expenses and cash flows of all subsidiaries. All significant intercompany balances, transactions and
cash flows are eliminated on consolidation.
Discontinued operations
A disposal of a component of an entity
or a group of an entity shall be reported in discontinued operations if the disposal represents a strategic shift that has (or will have)
a major effect on an entity’s operations. Classification as a discontinued operations occurs upon disposal or when the operation
meets the criteria to be classified as held for sale, if earlier. Where an operation is classified as discontinued, a single amount is
presented on the face of the consolidated statements of operations and comprehensive income. The amount of total current assets, total
non-current assets, total current liabilities and total non-current liabilities are presented separately on the consolidated balance sheets.
PLASTEC TECHNOLOGIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
2. Summary
of Significant Accounting Policies - Continued
Foreign currency translation
The functional currency of the Company
is United States Dollar. The functional currency of the subsidiaries other than the former subsidiaries in the PRC is Hong Kong dollar.
The former subsidiaries in the PRC have their local currency, Renminbi, as their functional currencies.
In the individual financial statements
of the consolidated entities, foreign currency transactions are translated into the functional currency of the individual entity using
the exchange rates prevailing at the dates of the transactions. At the reporting date, monetary assets and liabilities denominated in
foreign currencies are translated at the foreign exchange rates prevailing at the reporting date. Foreign exchange gains and losses resulting
from the settlement of such transactions and from the reporting date retranslation of monetary assets and liabilities are recognized in
the consolidated statement of income. Aggregate net foreign currency transaction gain/(loss) were HK$9,954, HK$(11,476) and HK$Nil for
the years ended December 31, 2018, 2019 and 2020, respectively.
Non-monetary items carried at fair
value that are denominated in foreign currencies are retranslated at the rates prevailing on the date when the fair value was determined
and are reported as part of the fair value gain or loss. Non-monetary items that are measured in terms of historical cost in a foreign
currency are not retranslated.
In the consolidated financial statements,
all individual financial statements originally presented in a currency different from the Company’s reporting currency have been
converted into Hong Kong dollars. Assets and liabilities have been translated into Hong Kong dollars at the closing rates at the reporting
date. Income and expenses have been converted into the Hong Kong dollars at the exchange rates prevailing at the transaction dates, or
at the average rates over the reporting period provided that the exchange rates do not fluctuate significantly. Any differences arising
from this procedure have been recognized in other comprehensive income and accumulated separately in the shareholders’ equity.
Use of estimates
The preparation of consolidated financial
statements in conformity with the US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts
of revenues and expenses during the reporting periods. The most significant estimates relate to allowances for doubtful accounts, inventory
valuation, useful lives of property, plant and equipment, valuation allowance for deferred tax assets and contingencies. Actual results
could differ from those estimates made by management.
Cash and cash equivalents
Cash and cash equivalents include cash
at bank and in hand and demand deposits with banks with original maturities of three months or less that are readily convertible into
known amounts of cash and which are subject to an insignificant risk of changes in value.
Allowance for doubtful account
The Group regularly monitors and assesses
the risk of not collecting amounts owed to the Group by debtors, if applicable. This evaluation is based upon a variety of factors including:
ongoing credit evaluations of its debtors’ financial condition, an analysis of amounts current and past due along with relevant
history and facts particular to the debtors. Other receivables are written off if reasonable collection efforts are not successful.
PLASTEC TECHNOLOGIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
2. Summary
of Significant Accounting Policies - Continued
Property, plant and equipment
Property, plant and equipment are stated
at acquisition cost less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable costs
of bringing the asset to its working condition and location for its intended use.
Depreciation is provided to write off
the cost less their residual values over their estimated useful lives, using the straight-line method, at the following rates per annum:
Motor vehicles 20%
The assets’ estimated residual
values, depreciation methods and estimated useful lives are reviewed, and adjusted if appropriate, at each reporting date.
The gain or loss arising on retirement
or disposal is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in the consolidated
statement of income.
All other costs, such as repairs and
maintenance are charged to the operations during the financial period in which they are incurred.
Impairment of long-lived assets
The Group periodically evaluates the
carrying value of long-lived assets to be held and used when events and circumstances warrant such a review. The carrying value of a long-lived
asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its
carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the
long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the
risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced
for the cost to dispose.
Intangible asset
Intangible asset consist of acquired
golf club membership. Intangible asset with an indefinite useful life is not amortized.
Fair value of financial instruments
The Group has no financial instruments
that are measured at fair value.
The carrying amounts of cash and cash
equivalents, short term bank deposits, accounts receivable and accounts payable, approximate their fair value due to the short-term maturities
of such instruments.
Revenues recognition
Rental income receivable under operating
leases is recognized in profit or loss in equal instalments over the periods covered by the lease term, except where an alternative basis
is more representative of the pattern of benefits to be derived from the use of the leased assets. Lease incentives granted are recognized
in profit or loss as an integral part of the aggregate net lease payments receivable.
Comprehensive income
The Group presents comprehensive income
in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 220
“Comprehensive Income”. FASB ASC 220 states that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in the consolidated financial statements. The components of comprehensive income were the
net income for the periods and the foreign currency translation adjustments.
PLASTEC TECHNOLOGIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
2. Summary
of Significant Accounting Policies - Continued
Income taxes
The Company accounts for income taxes
in accordance with FASB ASC 740 “Income taxes”, which requires an entity to recognize deferred tax assets and liabilities
using the asset and liability method. Under this method, deferred income taxes are recognized for all temporary differences at enacted
rates and classified as current or non-current based upon the classification of the related asset or liability in the consolidated financial
statements. A valuation allowance is provided to reduce the amount of deferred tax assets if it is considered more likely than not that
some portion of, or all, the deferred tax asset will not be realized.
FASB ASC 740 clarifies the accounting
for uncertainty in income taxes recognized in an enterprise’s financial statements, and prescribes a recognition threshold and measurement
attribute for the financial statements recognition and measurement of a tax position taken or expected to be taken in a tax return. It
also provides accounting guidance on de-recognition, classification, interest or penalties, accounting in interim periods, disclosure
and transition. Interest and penalties from tax assessments, if any, are included in income taxes in the consolidated statement of income.
Earnings per share
Basic net income per share is computed
by dividing net income available to ordinary shares by the weighted average number of ordinary shares outstanding during the period. Diluted
net income per share gives effect to all dilutive potential ordinary shares outstanding during the period. The weighted average number
of ordinary shares outstanding is adjusted to include the number of additional ordinary shares that would have been outstanding if the
dilutive potential ordinary shares had been issued. In computing the dilutive effect of potential ordinary shares, the average stock price
for the period is used in determining the number of treasury shares assumed to be purchased with the proceeds from the exercise of derivative
securities.
Dividends
Dividends are recorded in the period
in which they are approved by the Company’s Board of Directors.
Contingencies
From time to time, the Group is subject
to claims arising in the conduct of its business, including claims relating to employees and public authorities, if applicable. In determining
whether liabilities should be recorded for pending litigation claims, an assessment of the claims is made and the likelihood that the
Group will be able to defend itself successfully against such claims is evaluated. When it is believed probable that the Group will not
prevail in a particular matter, an estimate is made of the amount of liability based, in part, on advice of legal counsel.
Recent accounting pronouncements
adopted
In December 2019, the FASB issued ASU
No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The FASB issued this update
as part of its initiative to reduce complexity in accounting standards. The amendments in this ASU simplify the accounting for income
taxes by removing certain exceptions to the general principles in Topic 740 and also improve consistent application of other areas by
clarifying and amending existing guidance. ASU 2019-12 is effective for the Company in fiscal 2022 and early adoption is permitted. Certain
amendments of this ASU may be adopted on a retrospective basis, modified retrospective basis or prospective basis. The adoption of this
standard did not have a material impact on its consolidated financial statements.
In June 2016, the FASB issued ASU No.
2016-13, Measurement of Credit Losses on Financial Instruments, which establishes ASC 326, Financial Instruments - Credit Losses. The
ASU revises the measurement of credit losses for financial assets measured at amortized cost from an incurred loss methodology to an expected
loss methodology. The ASU affects trade receivables, debt securities, net investment in leases, and most other financial assets that represent
a right to receive cash. Additional disclosures about significant estimates and credit quality are also required. In November 2018, the
FASB issued ASU No. 2018-19, Codification Improvements to Topic 326, Financial Instruments - Credit Losses. This ASU clarifies that receivables
from operating leases are accounted for using the lease guidance and not as financial instruments. In May 2019, the FASB issued ASU No.
2019-05, Targeted Transition Relief, which amends ASC 326. This ASU provides an option to irrevocably elect to measure certain individual
financial assets at fair value instead of amortized cost. The Company is currently evaluating the impact this guidance will have on its
financial statements. The adoption of this standard did not have a material impact on its consolidated financial statements.
Other accounting standards that have been issued or proposed
by the FASB or other standards-setting bodies that do not require adoption until a future date are not expected to have a material impact
on the Company’s consolidated financial statements upon adoption.
PLASTEC TECHNOLOGIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
|
|
3.
|
Discontinued Operations
|
On April 20, 2018, the Company, via
Viewmount, completed disposals of its certain former subsidiaries holding ownership interests in the newly established manufacturing plant
in Kai Ping, China to PIHL for a total consideration of approximately HK$70, representing the actual registered capital injected by Viewmount
into the relevant former subsidiaries alongside settlement of all accounts payable owed by the relevant former subsidiaries to Viewmount
at the closing (totaling HK$258,910).
On November 20, 2019, the Company,
via Viewmount, completed disposal of its former subsidiary holding the right to use certain parcels of land in Shenzhen together with
premises built thereon to an unaffiliated third party for HK$47,965 in cash (net of all relevant expenses, charges and taxes) alongside
settlement of all accounts payable owed by the relevant former subsidiary to Viewmount at the closing (totaling HK$112,035).
The disposals represented a strategic
shift and had a major effect on the Group’s results of operations. The disposed entities are accounted as discontinued operations
in the consolidated financial statements for the years ended December 31, 2018 and 2019. Gains of HK$171,809 and HK$47,845 for the years
ended December 31, 2018 and 2019, respectively, were recognized on the disposals including in net income from discontinuing operations.
Consolidated statements of operations
and comprehensive income
|
|
|
For the year ended December 31,
|
|
|
|
|
2018
|
|
|
2019
|
|
|
|
|
HK$
|
|
|
HK$
|
|
|
Revenues
|
|
|
-
|
|
|
|
-
|
|
|
Cost of sales
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
-
|
|
|
|
-
|
|
|
Other revenues
|
|
|
16,754
|
|
|
|
14,398
|
|
|
Selling, general and administrative expenses
|
|
|
(16,660
|
)
|
|
|
(8,879
|
)
|
|
Gain on disposal of subsidiaries
|
|
|
171,809
|
|
|
|
47,845
|
|
|
Interest income
|
|
|
24
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before income tax
|
|
|
171,927
|
|
|
|
53,364
|
|
|
Income tax expense
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the year
|
|
|
171,927
|
|
|
|
53,364
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income
|
|
|
|
|
|
|
|
|
|
Exchange gain on translation of financial statements of foreign operations
|
|
|
6,674
|
|
|
|
-
|
|
|
Income from discontinued operations attributable to shareholders of the Company
|
|
|
178,601
|
|
|
|
53,364
|
|
4. Deposits,
Prepayment and Other Receivables
Deposits, prepayment and other receivables
consist of the following:
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
Prepaid insurance and others
|
|
|
470
|
|
|
|
494
|
|
|
Other receivables
|
|
|
1,284
|
|
|
|
1,956
|
|
|
|
|
|
1,754
|
|
|
|
2,450
|
|
PLASTEC TECHNOLOGIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
5. Property,
Plant and Equipment
Property, plant and equipment consist
of the following:
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
Property, plant and equipment:
|
|
|
|
|
|
|
|
|
|
Motor vehicles
|
|
|
1,814
|
|
|
|
1,814
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated depreciation
|
|
|
(1,391
|
)
|
|
|
(1,754
|
)
|
|
Property, plant and equipment, net
|
|
|
423
|
|
|
|
60
|
|
Depreciation of property, plant and
equipment from operating activities were HK$363, HK$363 and HK$363 during the years ended December 31, 2018, 2019 and 2020, respectively.
6. Other
Payables and Accruals
Other payables and accruals consist
of the following:
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
Accrued salaries, wages and bonus
|
|
|
40
|
|
|
|
40
|
|
|
Accrued audit and professional fees
|
|
|
1,301
|
|
|
|
1,529
|
|
|
|
|
|
1,341
|
|
|
|
1,569
|
|
7. Income
Taxes
The Company and its subsidiaries are
subject to taxation in various jurisdictions including Hong Kong. Pursuant to the rules and regulations of the Cayman Islands, the Company
is not subject to any income tax in the Cayman Islands. The income of its subsidiaries which are incorporated in the BVI is not subject
to taxation in the BVI under the current BVI law. The subsidiaries operating in Hong Kong are subject to income taxes as described below.
The subsidiaries operating in Hong
Kong were subject to a two-tiered profits tax rates regime at the rate of 8.25% for the first HK$2,000 assessable profits and at 16.5%
over HK$2,000 assessable profits for the years ended December 31, 2018, 2019 and 2020, respectively.
As of December 31, 2019 and 2020, board
of directors considered that the Company had accounted for the uncertain tax positions affecting its consolidated financial position,
results of operations or cash flows, and will continue to evaluate for any uncertain position in future. The Company’s tax positions
related to open tax years are subject to examination by the relevant tax authorities.
The provision for income taxes consists
of the following:
|
|
|
Year ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
Current tax
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Hong Kong
|
|
|
-
|
|
|
|
138
|
|
|
|
147
|
|
|
- Other countries
|
|
|
2,435
|
|
|
|
591
|
|
|
|
632
|
|
|
|
|
|
2,435
|
|
|
|
729
|
|
|
|
779
|
|
PLASTEC TECHNOLOGIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
7. Income
Taxes (Continued)
Reconciliations between the provision
for income taxes computed by applying the Hong Kong profits tax to income before income tax expense are as follows:
|
|
|
Year ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
Provision for income taxes at Hong Kong profits tax rates
|
|
|
40
|
|
|
|
(2,867
|
)
|
|
|
76
|
|
|
Current tax in other jurisdictions
|
|
|
2,039
|
|
|
|
591
|
|
|
|
632
|
|
|
Effect of income not chargeable for tax purpose
|
|
|
(12
|
)
|
|
|
-
|
|
|
|
(15
|
)
|
|
Effect of expenses not deductible for tax purpose
|
|
|
-
|
|
|
|
-
|
|
|
|
60
|
|
|
Tax effect of unused tax losses not recognized
|
|
|
368
|
|
|
|
3,005
|
|
|
|
26
|
|
|
|
|
|
2,435
|
|
|
|
729
|
|
|
|
779
|
|
8. Net
Income/(loss) Per Share
The following table sets forth the
computation of basic and diluted income per share for the years indicated:
|
|
|
Year ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
Basic and diluted income per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Numerator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) for the year attributable to the Company’s ordinary shareholders
|
|
|
177,974
|
|
|
|
40,849
|
|
|
|
(3,507
|
)
|
|
- Continuing operations
|
|
|
6,047
|
|
|
|
(12,515
|
)
|
|
|
(3,507
|
)
|
|
- Discontinued operations
|
|
|
171,927
|
|
|
|
53,364
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of basic and diluted ordinary shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Continuing operations
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
- Discontinued operations
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of basic and diluted ordinary shares used in calculating income per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Continuing operations
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
- Discontinued operations
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
|
12,938,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted net income/(loss) per share
|
|
|
HK$13.76
|
|
|
|
HK$3.16
|
|
|
|
HK$(0.27)
|
|
|
- Continuing operations
|
|
|
HK$ 0.47
|
|
|
|
HK$(0.97)
|
|
|
|
HK$(0.27)
|
|
|
- Discontinued operations
|
|
|
HK$13.29
|
|
|
|
HK$4.13
|
|
|
|
-
|
|
PLASTEC TECHNOLOGIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
9. Commitments and Contingencies
Capital commitment
As of December 31, 2019 and 2020, no
capital commitment was expected.
Legal Proceeding
As of December 31, 2020, the Group
is not aware of any material outstanding claim and litigation against them.
10. Operating
Segment and Geographical Information
The Company uses the management approach
model for segment reporting. The management approach model is based on the way a Company’s management organizes segments within
the Group for making operating decisions and assessing performance. The Group does not allocate any assets and liabilities to the three
geographic segments as management does not use the information to measure the performance of the reportable segments.
(i) The
location of the Group’s identifiable assets other than acquired intangible asset and liabilities by business operations from continuing
operations are as follows:
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
Identifiable assets
|
|
|
|
|
|
|
|
|
|
Hong Kong
|
|
|
184,061
|
|
|
|
181,561
|
|
|
United States
|
|
|
3,646
|
|
|
|
3,646
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
187,707
|
|
|
|
185,207
|
|
|
|
|
|
|
|
|
|
|
|
|
Identifiable liabilities
|
|
|
|
|
|
|
|
|
|
Hong Kong
|
|
|
10,748
|
|
|
|
11,755
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,748
|
|
|
|
11,755
|
|
PLASTEC TECHNOLOGIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
10. Operating
Segment and Geographical Information (Continued)
(ii) Reconciliations of reportable
segment assets and liabilities from continuing operations:
|
|
|
Year ended
December 31
|
|
|
Year ended
December 31
|
|
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
187,284
|
|
|
|
185,147
|
|
|
Non-current financial assets
|
|
|
423
|
|
|
|
60
|
|
|
Consolidated total assets before intangible asset
|
|
|
187,707
|
|
|
|
185,207
|
|
|
Intangible asset
|
|
|
438
|
|
|
|
438
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated total assets
|
|
|
188,145
|
|
|
|
185,645
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
Liabilities excluding tax liabilities
|
|
|
1,341
|
|
|
|
1,569
|
|
|
Tax liabilities
|
|
|
9,407
|
|
|
|
10,186
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated total liabilities
|
|
|
10,748
|
|
|
|
11,755
|
|
11. Cash
dividend
On March 29, 2018, the Company approved
and declared a final cash dividend of US$1.50 per ordinary share on its total 12,938,128 outstanding shares as of the close of trading
on April 12, 2018, resulting in payments totaling US$19,407,192 to shareholders. Such dividend was recorded as a reduction to retained
earnings at the declaration date.
On August 17, 2018, the Company approved
and declared a special cash dividend of US$2.50 per ordinary share on its total 12,938,128 outstanding shares as of the close of trading
on August 31, 2018, resulting in payments totaling US$32,345,320 to shareholders. Such dividend was recorded as a reduction to retained
earnings at the declaration date.
On June 7, 2019, the Company approved
and declared a special cash dividend of US$2.50 per ordinary share on its total 12,938,128 outstanding shares as of the close of trading
on June 21, 2019, resulting in payments totaling US$32,345,320 to shareholders. Such dividend was recorded as a reduction to retained
earnings at the declaration date.
On November 21 2019, the Company approved
and declared a special cash dividend of US$1.60 per ordinary share on its total 12,938,128 outstanding shares as of the close of trading
on December 5, 2019, resulting in payments totaling US$20,701,005 to shareholders. Such dividend was recorded as a reduction to retained
earnings at the declaration date.
12. Subsequent
Events
The Company has evaluated all other
subsequent events through April 29, 2021, the date these consolidated financial statements were issued, and determined that there were
no other subsequent events or transaction, apart from the above described events, that required recognition or disclosures in the financial
statements.
PLASTEC TECHNOLOGIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
13. Condensed financial
information of Plastec Technologies, Ltd.
The condensed financial statements
of Plastec Technologies, Ltd. have been prepared in accordance with accounting principles generally accepted in the United States of America.
Balance Sheets
|
|
|
December 31,
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
152,340
|
|
|
|
149,529
|
|
|
Prepaid expenses and other receivables
|
|
|
468
|
|
|
|
1,130
|
|
|
Total current assets
|
|
|
152,808
|
|
|
|
150,659
|
|
|
Investment in subsidiaries
|
|
|
-
|
|
|
|
-
|
|
|
Total assets
|
|
|
152,808
|
|
|
|
150,659
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities and shareholders’ equity
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Accrued liabilities
|
|
|
1,257
|
|
|
|
1,415
|
|
|
Amount due to subsidiary
|
|
|
18,650
|
|
|
|
18,650
|
|
|
Tax payable
|
|
|
7,874
|
|
|
|
8,506
|
|
|
Total current liabilities
|
|
|
27,781
|
|
|
|
28,571
|
|
|
NET CURRENT ASSETS
|
|
|
125,027
|
|
|
|
122,088
|
|
|
TOTAL ASSETS AND LIABILITIES
|
|
|
125,027
|
|
|
|
122,088
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
|
|
|
|
|
|
|
Ordinary shares (US$0.001 par value; 100,000,000 authorized, 12,938,128 and 12,938,128 shares issued and outstanding as of December 31, 2019 and 2020, respectively)
|
|
|
101
|
|
|
|
101
|
|
|
Retained earnings
|
|
|
124,926
|
|
|
|
121,987
|
|
|
Total shareholders’ equity
|
|
|
125,027
|
|
|
|
122,088
|
|
Statements of
operations and comprehensive income
|
|
|
Year ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
Revenues
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
Other income
|
|
|
16,573
|
|
|
|
6,192
|
|
|
|
967
|
|
|
Gain on disposal of a subsidiary
|
|
|
165,506
|
|
|
|
-
|
|
|
|
-
|
|
|
Administrative expenses
|
|
|
(3,564
|
)
|
|
|
(14,507
|
)
|
|
|
(3,274
|
)
|
|
Income/(loss) before income tax expense
|
|
|
178,515
|
|
|
|
(8,315
|
)
|
|
|
(2,307
|
)
|
|
Income tax expense
|
|
|
(4,155
|
)
|
|
|
(591
|
)
|
|
|
(632
|
)
|
|
Total comprehensive income/(loss)
|
|
|
174,360
|
|
|
|
(8,906
|
)
|
|
|
(2,939
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PLASTEC TECHNOLOGIES, LTD.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Hong Kong dollars in thousands, except number
of shares, per share data and unless otherwise stated)
13. Condensed
financial information of Plastec Technologies, Ltd. – Continued
Statements
of cash flows
|
|
|
Year ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
Year ended
December 31,
|
|
|
|
|
2018
|
|
|
2019
|
|
|
2020
|
|
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
|
HK$
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss)
|
|
|
174,360
|
|
|
|
(8,906
|
)
|
|
|
(2,939
|
)
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on disposal of a subsidiary
|
|
|
(165,506
|
)
|
|
|
-
|
|
|
|
-
|
|
|
Change in operating assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Prepaid expenses
|
|
|
312
|
|
|
|
273
|
|
|
|
(662
|
)
|
|
Accrued liabilities
|
|
|
(237
|
)
|
|
|
541
|
|
|
|
158
|
|
|
Income tax payable
|
|
|
4,155
|
|
|
|
591
|
|
|
|
632
|
|
|
Net cash provided by/(used in) operating activities
|
|
|
13,084
|
|
|
|
(7,501
|
)
|
|
|
(2,811
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sale proceeds of disposal of a subsidiary, net
|
|
|
141,341
|
|
|
|
165,506
|
|
|
|
-
|
|
|
Net cash provided by investing activity
|
|
|
141,341
|
|
|
|
165,506
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Decrease in amount due from subsidiaries
|
|
|
223,200
|
|
|
|
160,046
|
|
|
|
-
|
|
|
Dividend paid
|
|
|
(403,669
|
)
|
|
|
(413,761
|
)
|
|
|
-
|
|
|
Net cash used in financing activities
|
|
|
(180,469
|
)
|
|
|
(253,715
|
)
|
|
|
-
|
|
|
Net decrease in cash and cash equivalents
|
|
|
(26,044
|
)
|
|
|
(95,710
|
)
|
|
|
(2,811
|
)
|
|
Cash and cash equivalents, beginning of year
|
|
|
274,094
|
|
|
|
248,050
|
|
|
|
152,340
|
|
|
Cash and cash equivalents, end of year
|
|
|
248,050
|
|
|
|
152,340
|
|
|
|
149,529
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
|
|
|
3,019
|
|
|
|
3,042
|
|
|
|
967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH ACTIVITY:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consideration receivable
|
|
|
165,506
|
|
|
|
-
|
|
|
|
-
|
|
Plastec Technologies, Ltd.
12,093,935 Ordinary Shares (for Resale)
, 2021
No dealer, salesperson or any other person
is authorized to give any information or make any representations in connection with this offering other than those contained in this
prospectus and, if given or made, the information or representations must not be relied upon as having been authorized by us. This prospectus
does not constitute an offer to sell or a solicitation of an offer to buy any security other than the securities offered by this prospectus,
or an offer to sell or a solicitation of an offer to buy any securities by anyone in any jurisdiction in which the offer or solicitation
is not authorized or is unlawful.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 6. Indemnification of Directors and Officers.
Cayman Islands law does not limit the extent to
which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the
extent any such provision may be held by the Islands courts to be contrary to public policy, such as to provide indemnification against
civil fraud or the consequences of committing a crime. Our memorandum and articles of association provide for indemnification of our officers
and directors for any liability incurred in their capacities as such, except through their own fraud or willful default. Additionally,
the Company entered into an indemnification agreement with each of its officers and directors in February 2011 whereby the Company agreed
to indemnify, and advance expenses to, each officer and director to the fullest extent permitted by applicable law.
Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have
been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is theretofore
unenforceable.
Item 7. Recent Sales of Unregistered Securities.
We have not issued/sold any securities without
registration under the Securities Act during the past three years.
Item 8. Exhibits and Financial Statement Schedules.
(a) The following exhibits are filed as part of
this Registration Statement:
Exhibit
No.
|
|
Description
|
|
10.1
|
|
Registration Rights Agreement (included as Exhibit 4.17 to the Company’s Shell Company Report on Form 20-F filed with the Securities and Exchange Commission on December 22, 2010 and incorporated herein by reference).
|
|
|
|
|
|
10.2
|
|
Amendment No. 1 to Registration Rights Agreement, dated as of November 19, 2009, between Plastec Technologies, Ltd. (formerly GSME Acquisition Partners I) and its initial shareholders (included as Exhibit 4.18 to the Company’s Shell Company Report on Form 20-F filed with the Securities and Exchange Commission on December 22, 2010 and incorporated herein by reference).
|
|
|
|
|
|
10.3
|
|
Amendment No. 1 to the Registration Rights Agreement, dated as of April 30, 2011, by and among Plastec Technologies, Ltd. and parties named and listed therein as Investors (included as Exhibit 10.1 to the Company’s Report of Foreign Private Issuer on Form 6-K filed with the SEC on May 3, 2011 and incorporated herein by reference).
|
|
|
|
|
|
10.4
|
|
Share Transfer Agreement (included as Exhibit 10.1 to the Company’s Report of Foreign Private Issuer filed on November 16, 2015 and incorporated herein by reference).
|
|
10.5
|
|
Share Transfer Agreement (included as Exhibit 4.12 to the Company’s Annual Report on Form 20-F filed on April 30, 2018 and incorporated herein by reference).
|
|
10.6
|
|
Agreement, dated November 15, 2019 (included as Exhibit 4.1 to the Company’s Report of Foreign Private Issuer filed on November 15, 2019 and incorporated herein by reference).
|
|
21.1
|
|
List of Subsidiaries as of May 11, 2021 (included as Exhibit 8.1 to the Company’s Annual Report on Form 20-F filed on May 14, 2021 and incorporated herein by reference).
|
|
23.1
|
|
Consent of Centurion ZD CPA & Co.
|
|
23.2
|
|
Consent of Maples & Calder (included as Exhibit 5.1 to the Company’s Registration Statement on Form F-1/A on May 15, 2013 and incorporated herein by reference).
|
|
23.3
|
|
Consent of Graubard Miller (included as Exhibit 5.2 to the Company’s Registration Statement on Form F-1/A on May 15, 2013 and incorporated herein by reference).
|
|
24.1
|
|
Power of Attorney (included on the signature page to the Company’s Registration Statement on Form F-1/A filed on July 23, 2013).
|
|
101.INS
|
|
XBRL Instance Document
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
Item 9. Undertakings.
(a) 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 of 1933;
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 Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table
in the effective registration statement;
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 of 1933, 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) To remove from registration by means
of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) To file a post-effective amendment
to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering
or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be
furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required
pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as
current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3,
a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or
Rule 3-19 of this chapter if such financial statements and information are contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference
in the Form F-3.
(5) That, for the purpose of determining
liability under the Securities Act of 1933 to any purchaser, if the registrant is subject to Rule 430C (§230.430C of this chapter),
each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements
relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (§230.430A of this chapter), shall be deemed to be
part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement
made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed
incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser
with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement
or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(6) That, for the purpose of determining
liability of the registrant under the Securities Act of 1933 to any purchaser 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;
(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.
(b) The undersigned hereby undertakes to provide
to the underwriter at the closing specified in the underwriting agreements, certificates in such denominations and registered in such
names as required by the underwriter to permit prompt delivery to each purchaser.
(c) Insofar as indemnification for liabilities
arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant 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 registrant of expenses incurred or paid by a director, officer
or controlling person of the registrant 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 registrant 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.
(d) The undersigned registrant hereby undertakes
that:
(1) For purposes of determining any
liability under the Securities Act of 1933, 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.
(2) For the purpose of determining
any liability under the Securities Act of 1933, 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.
SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Hong Kong, on the 1st day of June 2021.
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PLASTEC TECHNOLOGIES, LTD.
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By:
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/s/ Kin Sun Sze-To
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Kin Sun Sze-To
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Chief Executive Officer
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(Principal Executive Officer)
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Pursuant to the requirements of the Securities
Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
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Name
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Position
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Date
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/s/ Kin Sun Sze-To
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Chairman of the Board, Chief Executive Officer and Chief Operating Officer (Principal Executive Officer)
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June 1, 2021
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Kin Sun Sze-To
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Ho Leung Ning *
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Chief Financial Officer (Principal Accounting and Financial Officer) and Director
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June 1, 2021
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Chung Wing Lai *
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Director
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June 1, 2021
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Joseph Yiu Wah Chow *
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Director
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June 1, 2021
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Authorized Representative in the United States:
Graubard Miller
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By:
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/s/ Jeffrey M. Gallant
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Name:
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Jeffrey M. Gallant
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Title:
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Partner
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Date:
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June 1, 2021
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*By:
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/s/ Kin Sun Sze-To
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Kin Sun Sze-To
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Attorney-in-fact
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Plastec Technologies (PK) (USOTC:PLTYF)
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