UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT
REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): November 1, 2014
ORIENT PAPER, INC.
(Exact Name of Registrant as Specified in Its Charter)
Nevada
(State or Other Jurisdiction of Incorporation)
| 001-34577 | 20-4158835 | |
| (Commission File Number) | (IRS Employer Identification No.) |
|
Science Park, Juli Road Xushui County, Baoding City Hebei Province, People’s Republic of China |
072550 | |
| (Address of Principal Executive Offices) | (Zip Code) |
(86) 312-8698215
(Registrant’s Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
| Item 2.02 | Results of Operations and Financial Condition. |
On November 3, 2014, Orient Paper, Inc. (the “Company”) issued a press release announcing its unaudited financial results and certain operational results for the third quarter ended September 30, 2014. A copy of the press release making the announcement is attached as Exhibit 99.1 to this Current Report on Form 8-K and and is incorporated herein by reference.
| Item 5.02 | Departure of Directors of Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Resignations of Officer and Director
On November 1, 2014, Mr. Winston C. Yen submitted his resignation from the position of chief financial officer of the Company, effective immediately. Mr. Yen’s resignation was due to personal reasons and not due to any disagreements with the Company regarding financial, operational or other matters.
On November 1, 2014, Mr. Drew Bernstein submitted his resignations as a member of the board of directors (the “Board”) of the Company and the chair of the Audit Committee, effective immediately. Mr. Bernstein’s resignations were due to personal reasons and not due to any disagreements with the Company regarding financial, operational or other matters.
Appointment of Jing Hao as Chief Financial Officer
On November 3, 2014, the Board appointed Ms. Jing Hao to the position of the Company’s Chief Financial Officer.
Ms. Jing Hao, 31, previously served as the Company’s Chief Financial Officer between November 2007 and April 2009. In addition, Ms. Hao has served as Chief Financial Officer of the Company’s operating entity, Hebei Baoding Orient Paper Milling Company Limited, since 2006. Prior to that, she was Manager of Financial Department for Hebei Baoding Orient Paper Milling Company Limited from 2005 to 2006.
Ms. Hao receives a monthly salary of RMB 20,000 (approximately $3,273).
Appointment of Marco Ku as a Director and Chairman of Audit Committee
On November 3, 2014, the Board of the Company appointed Mr. Marco Ku as an independent member of the Board to fill the vacancy created by the departure of Mr. Bernstein. In conjunction with his appointment to the Board, Mr. Ku was appointed to serve as a member and the chairman of the Company’s Audit Committee, and a member of Compensation Committee and Nominating Committee. The Board determined that Mr. Ku qualifies as an “audit committee financial expert,” as that term is defined in the rules and regulations of the Securities Exchange Act of 1934, as amended.
Mr. Marco Ku, 40, is the founder of Sensible Investment Company Limited, an investment consulting firm based in Hong Kong founded in 2013. Mr. Ku was previously Chief Financial Officer of China Marine Food Group Limited (OTC: CMFO) from July 2007 to October 2013. Prior to his position at China Marine Food Group Limited, Mr. Ku co-founded KISS Catering Group, a food and beverage business in Beijing from October 2005 to April 2007. From October 2004 to September 2005, he worked as the Financial Controller at Hongkong.com Company Limited (a Hong Kong listed company within the China.com Group). From August 2000 to February 2003, he served as Manager of Corporate Services at Logistics Information Network Enterprise (HK) Limited, a subsidiary of Hutchison Port Holdings Ltd., where he later served as Manager of Management Accounting from March 2003 to September 2004. Mr. Ku worked at KPMG LLP from 1996 to 2000, where his last held position was Assistant Manager. Mr. Ku received a bachelor’s degree in finance from the Hong Kong University of Science and Technology in 1996, and is currently a fellow member of the Hong Kong Institute of Certified Public Accountants. Based on Mr. Ku’s extensive experience withcorporate accounting and finance matters, in particular his role in financial reporting of publicly held companies, the Board believes that Mr. Ku has the appropriate set of skills to serve as a member of the board.
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On November 3, 2014, the Company entered into an appointment letter with Mr. Ku (the “Appointment Letter”). Purusant to the Appointment Letter, Mr. Ku will receive an annual fee of $20,000 in cash. In addtion, the Company will issue to Mr. Ku 7,500 shares of its common stock, par value $0.001, under the Company’s stock incentive plan. Mr. Ku will be reimbursed for his out-of-pocket epxenses incurred in connetion with his service to the Company.
| Item 8.01 | Other Events. |
On November 3, 2014, the Company issued a press release announcing the appointments of Ms. Hao as the Company’s Chief Financial Officer and Mr. Ku as the Company’s director and chair of the Company’s Audit Committee, and the resignations of Mr. Yen and Mr. Bernstein. A copy of the press release is included as Exhibit 99.2 to this Current Report on Form 8-K.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
The following exhibits are filed herewith:
| Exhibit Number | Description | |
| 10.1 | Appointment Letter dated November 3, 2014, by and between Orient Paper, Inc. and Marco Ku. | |
| 99.1 | Press Release dated November 3, 2014, announcing unaudited financial results and certain operational results for the third quarter of 2014. | |
| 99.2 | Press Release dated November 3, 2014, announcing changes in the executive officer and director of Orient Paper, Inc. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| ORIENT PAPER, INC. | |||
| Date: November 6, 2014 | By: | /s/ Zhenyong Liu | |
| Name: | Zhenyong Liu | ||
| Title: | Chief Executive Officer | ||
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Exhibit 10.1
ORIENT PAPER, INC.
Science Park, Juli Road, Xushui County,
Baoding City, Hebei Province, PRC 072550
Date: November 3, 2014
| To: | Marco Ku |
Flat D, 22/F, Block 1, Grand Promenade, Hong Kong
Dear Mr. Ku:
This letter (the “ Letter ”) is to confirm the terms of your appointments as a non-executive director of Orient Paper, Inc. (the “ Company ”) and a member of the Company’s Audit Committee, Compensation Committee and Nominating Committee, and the chairman of the Company’s Audit Committee.
Overall, in terms of time commitment, we expect your attendance at all of the meetings of the Board of Directors (the “ Board ”), meetings of the Audit Committee, Compensation Committee and Nominating Committee of the Board (as applicable) and the annual meetings of stockholders (if requested). In addition, you will be expected to devote appropriate preparation time ahead of each meeting. Board meetings may be held within or outside the United States of America as the Company may decide.
By accepting these appointments, you confirm that you are able to allocate sufficient time to meet the expectations of this position.
For and in consideration of the services to be performed by you, Company and you agree as follows:
| 1. | Compensation . |
| (a) | Fee . The Company shall pay you an annual fee equal to the amount of $20,000 (Twenty Thousand U.S. Dollars), payable on a monthly basis, subject to your continuous service as a member of the Board (the “ Annual Fee ”). |
| (b) | Common Stock . Subject to all approvals required by law, the Company will grant you 7,500 shares (the “ Shares ”) of the Company’s common stock, par value $0.001 (the “ Common Stock ”) under the Company’s incentive stock plan. |
You represent and agree that you are accepting the Shares for your own account and not with a view to or for sale of distribution thereof. You understand that the Shares are characterized as “restricted securities” under the Securities Act of 1933, as amended (the “Securities Act”) and such Shares may not be resold without registration under the Securities Act or the existence of an exemption there from. You represent that you are familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
| (c) | Expenses . The Company agrees to reimburse you for out-of-pocket expenses incurred by you in connection with your service, such as transportation expenses, provided that such expenses are substantiated by original and valid receipts and have been pre-approved by the Company in writing (the “ Expenses ”). Payment of the Expenses, as applicable, shall be made against your itemized invoice following the receipt of the relevant invoice, which invoice shall be submitted to the Company within seven (7) days of the end of each calendar month during the term of this Letter. |
For the avoidance of any doubt, the Annual Fee, the Shares (subject to the terms and conditions as provided herein) and the Expenses constitute the full and final consideration for your appointments, and you shall not be entitled to any additional consideration, of any form, for your appointments and service.
| 2. | Term and Termination . The term of this Letter shall be for one (1) year from the date hereof, unless sooner terminated as provided for in this Section 2 (the “Term”). This Letter shall terminate upon the earlier of: (i) your no longer being a member of the Board; and (ii) the Company providing you written notice terminating this Letter. The Company shall pay you the compensation and reimburse expenses through the end of the Term. |
| 3. | Duties . You will undertake such travelling as may reasonably be necessary for the performance of your duties, including travelling overseas for Board meetings and site visits if required. |
You will undertake such duties and powers relating to the Company, and any subsidiaries or associated companies of the Company (the “ Group ”) as the Board may from time to time reasonably request. The Board as a whole is collectively responsible for promoting the success of the Company by directing and supervising the Company’s affairs, including but not limited to, providing entrepreneurial leadership of the Group within a framework of prudent and effective controls which enable risk to be assessed and managed, setting the Group’s strategic aims, ensures that the necessary financial and human resources are in place for the Group to meet its objectives and reviews management performance, and setting the Group’s values and standards and ensures that its obligations to its shareholders and others are understood and met.
Your performance of duties as a director, a member of committees of the Board, and the chairman of Audit Committee, is evaluated annually. If, in the interim, there are any matters which cause you concern about your position, you are encouraged to discuss them with the Chairman and/or Chief Executive Officer of the Company as soon as is appropriate.
| 4. | Other Responsibilities . Subject to the proper performance of your obligations to the Company under this Letter and any applicable law, the Company agrees that you may accept other appointments and directorships provided that, (i) they do not in anyway conflict with the interests of the Company or any member of the Group; (ii) they do not restrict you from devoting the necessary time and attention properly to services to be performed under this Letter; and (iii) you promptly inform the Company of such other appointments or directorships. |
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In the event you become aware of any potential conflicts of interest, these must be disclosed to the Chairman and/or the Chief Executive Officer of the Company as soon as they become apparent.
| 5. | Confidential Information . You undertake to the Company that you shall maintain in strict confidentiality all trade, business, technical or other information regarding the Company, the Group, its affiliated entities and their business affairs including, without limitation, all marketing, sales, technical and business know-how, intellectual property, trade secrets, identity and requirements of customers and prospective customers, the Company’s methods of doing business and any and all other information relating to the operation of the Company (collectively, the “ Confidential Information ”). You shall at no time disclose any Confidential Information to any person, firm, or entity, for any purpose unless such disclosure is required in order to fulfil your duties as set forth in this Letter. You further undertake that you shall not use such Confidential Information for personal gain. |
“Confidential Information” shall not include information that is or becomes part of the public domain other than as a result of disclosure by you. In the event that you are requested or required (by oral questions, interrogatories, requests for information or documents, subpoena, civil investigative demand or other process) to disclose any Confidential Information, it is agreed that you, to the extent practicable under the circumstances, will provide the Company with prompt notice of any such request or requirement so that the Company may seek an appropriate protective order or waive compliance with this paragraph 6. If a protective order or the receipt of a waiver hereunder has not been obtained, you may disclose only that portion of the Confidential Information which you are legally compelled to disclose.
| 6. | Blackout Period . You understand that we have a policy pursuant to which no officer, director or key executive may engage in transactions in our securities during the period commencing two weeks prior to the end of a fiscal quarter and ending the day after the financial information for the quarter and year have been publicly released. As a member of the Audit Committee, if you have information concerning our financial results at any time, you may not engage in transactions in our securities until the information is publicly disclosed. |
| 7. | Return of Property . Upon termination of the Term, you shall return all property belonging to a Group company, together with all documents, papers, disks and information, howsoever stored, relating to a Group company and used by you in connection with this position with the Company. |
| 8. | Advisors . In addition to any right pursuant to applicable law, occasions may arise when you consider that you need professional advice in the furtherance of your duties as provided herein. Circumstances may occur when it will be appropriate for you to seek such advice from independent advisors at the Company’s expense, to the extent provided under applicable law. |
| 9. | Governing Law . This Letter shall be governed by and construed in accordance with the law of the State of New York. |
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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The undersigned have executed this Letter as of the date first above written.
ORIENT PAPER, INC.
/s/ Zhenyong Liu
Zhenyong Liu
Chief Executive Officer
MARCO KU
/s/ Marco Ku
Name of Director: Marco Ku
Address: Flat D, 22/F, Block 1, Grand Promenade, Hong Kong
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Exhibit 99.1
Orient Paper, Inc. Announces Preliminary Results for the Third Quarter 2014
BAODING, China, Nov. 3, 2014 /PRNewswire/ — Orient Paper, Inc. (NYSE MKT: ONP) ("Orient Paper" or the "Company"), a leading manufacturer and distributor of diversified paper products in North China, today announced its preliminary unaudited financial results for the third quarter ended September 30, 2014. The Company will file its Form 10-Q with the Securities and Exchange Commission and will announce its full unaudited financial results for the third quarter ended September 30, 2014 after market closes on November 13, 2014.
Preliminary Third Quarter 2014 Selected Unaudited Financial Results Highlights
*Products from PM6 only
**Products of 60 gram/square meter from PM1 only
Key Highlights for Third Quarter 2014
| · | Monthly utilization rate of PM6 remained stable throughout Q3 at approximately 76% |
| · | Thanks to contribution from the PM1 Light-Weight CMP, total CMP Revenue increased 20% YoY, but gross profit declined due to declining ASP and higher cost of sales |
| · | Digital photo paper production lines have been disassembled and relocation to the new workshop at Xushui Mill Annex started after September 30, 2014 |
Mr. Zhenyong Liu, Chairman and Chief Executive Officer of Orient Paper, commented, "Our results this quarter reflect a mix of solid execution against a backdrop of challenging industry conditions. Revenue was up, we maintained high utilization of PM6, and made progress on relocating the digital photo paper lines. Light-weight CMP continues to make a solid revenue contribution, and we continue to prepare to enter the tissue paper market as we construct our lines at the Wei County Industrial Park."
Mr. Liu continued, "Despite that solid execution, industry conditions remain challenging, causing our gross margin and net income to decline. Pricing is a bit soft, while our cost of raw material was up 17%. In addition, we will be impacted in the fourth quarter by the mandated production halt associated with the APEC conference in Beijing. Obviously industry conditions are out of our control, but we will continue to focus on executing on those elements of our business under our control."
Conference Call
Orient Paper's management will host a conference call at 8:30 am US Eastern Time (5:30 am US Pacific Time/9:30 pm Beijing Time) on Friday, November 14, 2014, to discuss its quarterly results and recent business, operational and corporate activities.
To participate in the conference call, please dial the following number five to ten minutes prior to the scheduled conference call time:
China: 400-120-0654
Hong Kong: 800-906-606
United States: 1-855-500-8701
International: +65-6723-9385
Passcode: 3054 1227
A replay of this conference call will be available by dialing:
China: 400-632-2162 / 800-870-0205
Hong Kong: 800-963-117
United States: 1-855-452-5696
International: +61-2-9003-4211
Passcode: 3054 1227
The replay will be archived for fourteen days following the earnings announcement until November 28, 2014.
This conference call will be broadcast live over the Internet and can be accessed by all interested parties by clicking on http://www.orientpaperinc.com/ . Please access the link at least fifteen minutes prior to the start of the call to register, download, and install any necessary audio software. A replay will be archived for one year shortly after the call by accessing the same link.
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About Orient Paper, Inc.
Orient Paper, Inc. ("Orient Paper") is a leading paper manufacturer in North China. Using recycled paper as its primary raw material, Orient Paper produces and distributes three types of paper products namely, packaging paper (corrugating medium paper-based), offset printing paper, and other paper products, including digital photo paper and household/tissue paper that the Company is currently expanding into.
With production operations based in Baoding in North China's Hebei Province, Orient Paper is located strategically close to the Beijing and Tianjin region, home to a growing base of industrial and manufacturing activities and one of the largest markets for paper products consumption in the country.
Orient Paper's production facilities are controlled and operated by its wholly owned subsidiary Shengde Holdings Inc, which in turn controls and operates Baoding Shengde Paper Co., Ltd., and Hebei Baoding Orient Paper Milling Co., Ltd for manufacturing digital photo, printing and packaging paper.
Founded in 1996, Orient Paper has been listed on the NYSE MKT Board with the ticker symbol "ONP" since December 2009. (Please visit http://www.orientpaperinc.com )
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Exhibit 99.2
Orient Paper Announces Transition of Chief Financial Officer and Independent Director
BAODING, China, Nov. 3, 2014 /PRNewswire/ -- Orient Paper, Inc. (NYSE MKT: ONP) ("Orient Paper" or the "Company"), a leading manufacturer and distributor of diversified paper products in North China, today announced that Mr. Winston Yen, has resigned from his position as the Company's Chief Financial Officer for personal reasons, effective November 1, 2014. Mr. Yen will continue serving the Company as a consultant to assist in the transition to a new Chief Financial Officer. The Board of Directors has appointed Ms. Jing Hao, the Chief Financial Officer of the Company's operating entity, Hebei Baoding Orient Paper Milling Company Limited, as the Company's Chief Financial Officer.
Ms. Jing Hao previously served Orient Paper, Inc. as its Chief Financial Officer from November 2007 to April 2009. Ms. Hao has also served as Chief Financial Officer of the Company's operating entity Hebei Baoding Orient Paper Milling Company Limited since 2006, and as Manager of Finance from 2005 to 2006.
Orient Paper also announced that Mr. Drew Bernstein, one of the Company's independent directors and the chair of its Audit Committee, has resigned from his positions with the Company for personal reasons, effective November 1, 2014. The Board of Directors has appointed Mr. Marco Ku as Mr. Bernstein's replacement as an independent director and Audit Committee Chairman.
Mr. Marco Ku is the founder of Sensible Investment Company Limited, an investment consulting firm based in Hong Kong. Mr. Ku was previously Chief Financial Officer of China Marine Food Group Limited ( CMFO ) from July 2007 to October 2013. Prior to his tenure at CMFO, Mr. Ku was with KPMG from 1996 to 2000, where his last held position was Assistant Manager. From August 2000 to February 2003, he served as Manager of Corporate Services for Logistics Information Network Enterprise (HK) Limited, a subsidiary of Hutchison Port Holdings Ltd., where he later served as Manager of Management Accounting from March 2003 to September 2004. From October 2004 to September 2005, he worked as the Financial Controller for Hongkong.com Company Limited (a Hong Kong listed company within the China.com Group). From October 2005 to April 2007, he co-founded KISS Catering Group, a food and beverage business in Beijing. Mr. Ku received a bachelor's degree in Finance from the Hong Kong University of Science and Technology in 1996, and is currently a Fellow Member of the Hong Kong Institute of Certified Public Accountants.
Mr. Zhenyong Liu, Chairman and Chief Executive Officer of Orient Paper commented, "I want to thank both Winston and Drew for their significant contributions during their tenure at Orient Paper. I also look forward to continue working with Winston as he helps us in our transition to a new CFO. We wish them both the best in their future endeavors. Meanwhile, we are pleased to welcome Jing Hao back as CFO. We also welcome Mr. Marco Ku to the Board of Directors and Audit Committee."
About Orient Paper, Inc.
Orient Paper, Inc. is a leading paper manufacturer in North China. Using recycled paper as its primary raw material, Orient Paper produces and distributes three categories of paper products: packaging paper (corrugating medium paper-based), offset printing paper, and other paper products, including digital photo paper and household/tissue paper that the company is currently expanding into.
With production operations based in Baoding in North China's Hebei Province, Orient Paper is located strategically close to the Beijing and Tianjin region, home to a growing base of industrial and manufacturing activities and one of the largest markets for paper products consumption in the country.
Orient Paper's production facilities are controlled and operated by its wholly owned subsidiary Shengde Holdings Inc, which in turn controls and operates Baoding Shengde Paper Co., Ltd., and Hebei Baoding Orient Paper Milling Co., Ltd for manufacturing digital photo, printing and packaging paper.
Founded in 1996, Orient Paper has been listed on the NYSE MKT Board with the ticker symbol "ONP" since December 2009. (Please visit http://www.orientpaperinc.com )
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