10-Q 1 v332599_10q.htm FORM 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2012

¨	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from ______________ to _____________

Commission file number: 000-51312

SHENGTAI PHARMACEUTICAL, INC.

(Exact name of registrant as specified in its charter)

Delaware		54-2155579
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

Changda Road East, Development District,

Changle County, Shandong, The People’s Republic of China

262400

(Address of principal executive offices)

(Zip Code)

011-86-536-2188831

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨

Non-accelerated filer	¨	Smaller reporting company	x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes¨ No x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

Yes ¨ No ¨

APPLICABLE ONLY TO CORPORATE ISSUERS:

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

As of February 13, 2013, there are 9,584,912 shares of $0.001 par value common stock issued and outstanding.

INDEX

		Page

PART I.	Financial Information (Unaudited)

	Item 1. Financial Statements.	3

	Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.	24

	Item 3. Quantitative and Qualitative Disclosures About Market Risk.	33

	Item 4. Controls and Procedures.	33

PART II.	Other Information

	Item 1. Legal Proceedings.	33

	Item 1A. Risk Factors.	34

	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.	34

	Item 3. Defaults Upon Senior Securities.	34

	Item 4. Mine Safety Disclosures.	34

	Item 5. Other Information.	34

	Item 6. Exhibits.	34

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

SHENGTAI PHARMACEUTICAL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

	December 31,		June 30,
	2012		2012

ASSETS
CURRENT ASSETS:
Cash & cash equivalents	$	11,147,724	$	4,903,303
Restricted cash		7,648,641		13,084,586
Accounts receivable, net of allowance for doubtful accounts of $1,124,954 and $1,603,051,respectively		12,033,935		12,099,625
Notes receivable		3,142,795		4,590,758
Other receivables		3,972,063		8,862,789
Inventories		35,844,802		29,457,981
Prepayments and other assets		1,918,666		1,023,154
Total current assets		75,708,626		74,022,195

PLANT AND EQUIPMENT, net		83,556,022		80,185,228

CONSTRUCTION IN PROGRESS		368,759		1,213,540

EQUITY INVESTMENT		12,845,149		11,704,050

ADVANCE FOR CONSTRUCTION		1,486,961		2,188,892

INTANGIBLE ASSETS, NET		3,347,968		3,271,147

Total assets	$	177,313,485	$	172,585,052

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES:
Accounts payable	$	10,464,735	$	5,432,615
Accounts payable and accrued liabilities - related party		719,793		405,926
Notes payable - banks		12,463,973		17,835,706
Short term bank loans		77,132,764		73,483,997
Accrued liabilities		560,086		479,593
Other payable		2,440,584		1,672,805
Employee loans		358,244		295,076
Other payable - officer		37,460		37,027
Customer deposit		8,831,607		9,610,252
Taxes payable		322,588		997,529
Total current liabilities		113,331,834		110,250,526

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Preferred stock, $0.001 par value, 2,500,000 shares authorized,
no shares issued and outstanding as of December 31, 2012 and June 30, 2012		-		-
Common stock, $0.001 par value, 50,000,000 shares authorized,
9,584,912 shares issued and outstanding as of December 31, 2012 and June 30, 2012		9,585		9,585
Additional paid-in capital		21,945,101		21,945,101
Statutory reserves		4,290,884		4,226,125
Retained earnings		27,456,850		27,064,092
Accumulated other comprehensive income		10,279,230		9,089,623
Total stockholders' equity		63,981,651		62,334,526

Total liabilities and stockholders' equity	$	177,313,485	$	172,585,052

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SHENGTAI PHARMACEUTICAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

Unaudited

	THREE MONTHS ENDED DECEMBER 31,						SIX MONTHS ENDED DECEMBER 31,
	2012			2011			2012			2011

NET SALES	$	64,103,621		$	42,933,425		$	112,848,264		$	82,988,873

COST OF SALES	$	58,114,822		$	38,892,394		$	101,801,487		$	75,562,795

GROSS PROFIT		5,988,799			4,041,031			11,046,777			7,426,078

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES		3,898,845			3,026,462			7,188,542			5,179,077

INCOME FROM OPERATIONS		2,089,954			1,014,569			3,858,235			2,247,001

OTHER INCOME (EXPENSE) :
Earnings on equity investment		291,815			32,977			530,824			306,890
Non-operating income		36,998			161,516			39,989			752,983
Non-operating expense		(240,241	)		(6,244	)		(401,028	)		(13,725	)
Interest expense and other charges		(1,910,036	)		(1,391,266	)		(3,592,031	)		(2,234,377	)
Interest income		112,265			139,465			237,392			144,191
Other income (expense) , net		(1,709,199	)		(1,063,552	)		(3,184,853	)		(1,044,038	)

INCOME BEFORE PROVISION FOR INCOME TAXES		380,755			(48,983	)		673,382			1,202,963

PROVISION FOR INCOME TAXES		119,539			16,079			215,865			384,468

NET INCOME		261,216			(65,062	)		457,517			818,495

OTHER COMPREHENSIVE ITEMS:
Foreign currency translation adjustments		1,310,479			405,636			1,189,607			879,511

COMPREHENSIVE INCOME		1,571,695		$	340,574			1,647,124		$	1,698,006

EARNINGS PER SHARE
Basic and diluted	$	0.03		$	(0.01	)	$	0.05		$	0.09

WEIGHTED AVERAGE NUMBER OF SHARES
Basic and diluted		9,584,912			9,584,912			9,584,912			9,584,912

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SHENGTAI PHARMACEUTICAL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

	SIX MONTHS ENDED DECEMBER 31,
	2012			2011

CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	457,517		$	818,495
Adjustments to reconcile net income to cash (used in)
provided by operating activities:
Depreciation		4,826,303			3,866,186
Amortization		37,718			29,541
Bad debt reduction		(494,367	)		(290,232	)
Share based compensation to employees		-			-
Earnings on equity investment		(530,824	)		(306,890	)
Loss on equipment disposal		-			-
Change in operating assets and liabilities:
Accounts receivable		721,109			58,328
Notes receivable		1,493,704			(688,958	)
Other receivables		4,954,330			1,273,594
Inventories		(5,998,907	)		(4,294,968	)
Prepayments and other assets		(2,343,071	)		1,884,620
Accounts payable and accrued liabilities		(1,189,862	)		(4,089,919	)
Accounts payable and accrued liabilities - related party		193,812			(617,404	)
Other payable		737,260			(1,069,555	)
Customer deposit		(898,719	)		(5,731,010	)
Taxes payable		(680,990	)		(381,549	)
Net cash provided by (used in) operating activities		1,285,014			(9,539,722	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in equity investment		(317,556	)		(1,254,400	)
Purchase of plant and equipment		(4,259	)		(1,221	)
Additions to construction in progress		0			(78,432	)
Increase in land use right		(69,977	)		(2,486	)
Advances for construction		2,194,522			1,342,590
Loan to related party - non-current		-			-
Net cash provided by (used in) investing activities		1,802,731			6,051

CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in restricted cash		5,435,944			7,121,261
Borrowings on notes payable - banks		12,329,401			1,844,282
Principal payments on notes payable - banks		(17,881,583	)		(13,171,200	)
Borrowings on short term loans		49,625,257			36,443,550
Principal payments on short term loans		(46,998,301	)		(22,483,610	)
Borrowings on employee loans		60,336			31,360
Principal payments on employee loans		(1,794	)		(3,136	)

Net cash (used in) provided by financing activities		2,569,259			9,782,506

EFFECTS OF EXCHANGE RATE CHANGE IN CASH		587,417			30,995

INCREASE (DECREASE) IN CASH & EQUIVELENTS		6,244,420			279,831

CASH & CASH EQUIVALENTS, beginning of year		4,903,303			4,051,349

CASH & CASH EQUIVALENTS, end of year	$	11,147,723		$	4,331,179

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest Paid	$	2,474,288		$	1,899,711
Income taxes	$	1,799		$	705,945

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Decrease of other receivable for acquisition of plant and equipment	$	2,078		$	20,651
Transfers of construction in progress-related inventory to plant and equipment	$	202,334		$	79,217
Acquisition of plant and equipment and construction in progress on credit	$	6,081,083		$	3,557,333
Completion of construction-in-progress (transferred to plant and equipment)	$	7,044,153		$	7,415,903

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

SHENGTAI PHARMACEUTICAL, INC. AND SUBSIDIARIES

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1 - Organization principal activities

Shengtai Pharmaceutical, Inc, the "Company,” was incorporated in March 2004 in the State of Delaware. The Company, through its subsidiaries, manufactures and distributes glucose and starch as pharmaceutical raw materials, other starch products and other glucose products such as corn meals, food and beverage glucose and dextrin. The Company's business operations are conducted in the People's Republic of China, the "PRC.”

Note 2 – Accounting policies

Accounting principles

In the opinion of management, the accompanying balance sheets and related interim statements of income and comprehensive income, and cash flows include all adjustments, consisting only of normal recurring items, necessary for their fair presentation in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Interim results are not necessarily indicative of results for a full year. The information included in this Form 10-Q should be read in conjunction with information included in the Company’s 2012 Form 10-K filed on September 28, 2012 with the U.S. Securities and Exchange Commission.

Principles of consolidation

The consolidated financial statements of Shengtai Pharmaceutical, Inc. and its subsidiaries reflect the activities of the parent and its wholly-owned subsidiaries Shengtai Holding, Inc., “SHI,” and Weifang Shengtai Pharmaceutical Co., Ltd., “Weifang Shengtai.” All material inter-company transactions and balances have been eliminated in consolidation.

Use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recently issued accounting pronouncements

FASB Accounting Standards Update No. 2011-08

In September 2011, the FASB issued ASU 2011-08, Testing Goodwill for Impairment, which provides an entity the option to first assess qualitative factors to determine whether it is necessary to perform the current two-step test for goodwill impairment. If an entity believes, as a result of its qualitative assessment, that it is more-likely-than-not that the fair value of a reporting unit is less than its carrying amount, the quantitative impairment test is required. Otherwise, no further testing is required. The revised standard is effective for the Company for its annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. The adoption of ASU 2011-08 is not expected to significantly impact the Company’s consolidated financial statements.

FASB Accounting Standards Update No. 2011-11

In December 2011, the FASB issued the FASB Accounting Standards Update No. 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This Update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS.

The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The adoption of ASU 2011-11 is not expected to significantly impact the Company’s consolidated financial statements.

FASB Accounting Standards Update No. 2012-02

On July 27, 2012, the FASB issued ASU 2012-02, Intangibles-Goodwill and Other (Topic 350) - Testing Indefinite-Lived Intangible Assets for Impairment. The ASU provides entities with an option to first assess qualitative factors to determine whether events or circumstances indicate that it is more likely than not that the indefinite-lived intangible asset is impaired. If an entity concludes that it is more than 50% likely that an indefinite-lived intangible asset is not impaired, no further analysis is required. However, if an entity concludes otherwise, it would be required to determine the fair value of the indefinite-lived intangible asset to measure the amount of actual impairment, if any, as currently required under US GAAP. The ASU is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted. The adoption of this pronouncement is not expected to have a material impact on the Company’s financial statements.

Note 3 – Earnings per share

Basic earnings per share is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted earnings per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.

The components of basic and diluted earnings per share consisted of the following:

	Three months ended December 31,
	2012		2011

Net income (loss) for earnings per share	$	261,216	$	(65,062	)
Weighted average shares used in basic and diluted computation		9,584,912		9,584,912
Earnings (loss) per share, basic and diluted:	$	0.03	$	(0.01	)

	Six months ended December 31,
	2012		2011

Net income for earnings per share	$	457,517	$	818,495
Weighted average shares used in basic and diluted computation		9,584,912		9,584,912
Earnings per share, basic and diluted:	$	0.05	$	0.09

The Company’s warrants and stock options were not included in the calculation of diluted earnings per share for the three and six months ended December 31, 2012 and 2011 as the effect would be anti-dilutive.

Note 4 - Concentrations of risk

The Company's operations are conducted solely within the PRC. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC, and by the general state of the Chinese economy. The Company's operations in the PRC are subject to specific considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments and foreign currency exchange. The Company's results may be adversely affected by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among others.

The cash deposits in U.S. financial institutions exceed the amounts insured by the U.S. government. Balances at financial institutions or state owned banks within the PRC are not covered by insurance. Non-performance by these institutions could expose the Company to losses for amounts in excess of insured balances. At December 31, 2012 and June 30, 2012, the Company’s bank balances with the banks and cash in hand in PRC amounted to $18,796,307 and $17,987,762, respectively, which are uninsured and subject to credit risk. The Company has not experienced nonperformance by these institutions.

For the six months ended December 31, 2012, there were no customers that individually comprised 10% or more of the Company’s total revenues. The Company has one customer, K.F.P that individually comprised 10% or more of the Company’s total revenues for the three months ended December 31, 2012.

For the three and six months ended December 31, 2011, there were no customers that individually comprised 10% or more of the Company’s total revenues.

There was no one vendor that individually comprised 10% or more of the Company’s total purchase for the three months ended December 31, 2011.

The Company has one vendor, Dezhou No.5 Grain and Cooking Oil Warehouse that individually comprised 10% or more of the Company’s total purchase for the six months ended December 31, 2011.

There was no one vendor that individually comprised 10% or more of the Company’s total purchase for the three and six months ended December 31, 2012.

For export sales, the Company frequently requires significant down payments or letter of credit from its customers prior to shipment. During the year, the Company maintained export credit insurance to protect the Company against the risk that the overseas customers may default on settlement.

The following table summarizes financial information for Company’s revenues based on geographic area:

	Three months ended
	December 31
	2012		2011
Revenue
China	$	47,889,452	$	35,419,626
International		16,214,169		7,513,799
Total	$	64,103,621	$	42,933,425

	Six months ended
	December 31
	2012		2011
Revenue
China	$	87,977,770	$	67,891,521
International		24,870,494		15,097,352
Total	$	112,848,264	$	82,988,873

Note 5 - Restricted cash

The Company through its bank agreements is required to keep certain amounts on deposit that are subject to withdrawal restrictions. These amounts were $7,648,641 and $13,084,586 as of December 31, 2012 and June 30, 2012, respectively.

Note 6 - Other receivables

Other receivables include receivables from unrelated parties for transactions other than sales. Other receivables amounted to $3,972,063 and $8,862,789 as of December 31, 2012 and June 30, 2012, respectively.

The other receivables include Company's advances to employees of $2,199,002 and $8,029,394 to purchase corn as of December 31, 2012 and June 30, 2012, respectively. These are advances to its purchasing department employees as purchase advances for corn purchases. This amount is 100% secured by the personal assets of the Company’s CEO as the guarantee extended by him.

Note 7 - Inventories

Inventories are stated at the lower of cost (weighted average basis) or market and consisted of the following:

	December 31,		June 30,
	2012		2012
Raw materials	$	2,837,064	$	8,511,716
Work-in-progress		16,679,931		12,782,232
Finished goods		16,327,807		8,164,032
Total	$	35,844,802	$	29,457,980

The Company reviews its inventory periodically for possible obsolete goods or to determine if any reserves are necessary. As of December 31, 2012, the Company has determined that no reserves are necessary.

Note 8 - Prepayments and other assets

Prepayments and other assets mainly represent partial payments or deposits for inventory and equipment and other purchases and services. Prepayments and other assets mainly represent partial payments or deposits for repairing parts, decorating fee, monitoring system, consulting services, gardening fee, and other fees. Prepayments and other assets amounted to $1,918,666 and $1,023,154 as of December 31, 2012 and June 30, 2012, respectively.

Note 9 - Plant and equipment and construction-in-progress

Plant and equipment and construction-in-progress consisted of the following:

	December 31, 2012			June 30, 2012
Buildings	$	40,458,375		$	39,894,378
Machinery and equipment		87,530,859			79,344,073
Automobile		835,519			804,128
Electronic equipment		812,414			793,370
Construction-in-progress		368,759			1,213,540
Total		130,005,926			122,049,489
Accumulated depreciation and amortization		(46,081,145	)		(40,650,721	)
Plant and equipment, net and construction-in-progress	$	83,924,781		$	81,398,768

Construction-in-progress represents the costs incurred in connection with the construction of buildings or new additions to the Company’s plant facilities. No depreciation is provided for construction-in-progress until such time as the assets are completed and placed into service. Depreciation expense for the three months ended December 31, 2012 and 2011 amounted to $2,553,959 and $1,969,276, respectively. Depreciation expense for the six months ended December 31, 2012 and 2011 amounted to $4,826,303 and $3,866,186, respectively. Interest costs totaling $68,539 and $34,166 were capitalized into construction-in-progress for the six months ended December 31, 2012 and 2011, respectively. Interest costs totaling $4,970 and $115,215 were capitalized into construction-in-progress for the three months ended December 31, 2012 and 2011, respectively.

Note 10 - Equity investment

On September 16, 2003, Weifang Shengtai entered into a joint venture partnership with Weifang City Investment Company and Changle Century Sun Paper Industry Co., Ltd, “Changle Paper,” and formed Changle Shengshi Redian Co., Ltd, "Changle Shengshi.” Changle Shengshi was incorporated in Weifang City, Shandong Province, the PRC. Changle Shengshi's principal activity is to produce and sell electricity and steam to Weifang Shengtai and Changle Paper for the use of their own production. Weifang Shengtai owns 20% of Changle Shengshi and the Company accounts for this 20% investment under the equity method of accounting.

Summarized financial information of Changle Shengshi is as follows:

	December 31,		June 30,
	2012		2012
Current assets	$	65,679,802	$	44,428,796
Non-current assets		77,833,900		77,391,817
Total assets	$	143,513,702	$	121,820,613

Current liabilities	$	80,382,789	$	65,866,866
Non-current liabilities		464,241		499,181
Stockholders' equity		62,666,672		55,454,566
Total liabilities and stockholders' equity	$	143,513,702	$	121,820,613

Equity Investment Reconciliation is as follows as of December 31, 2012 and June 30, 2012:

	December 31, 2012		June 30, 2012

Beginning balance	$	11,704,050	$	9,132,725
Additional investment		321,022		1,418,958
Company's share of net income		530,824		921,730
Translation adjustment		289,253		230,637
Ending balance	$	12,845,149	$	11,704,050

Summarized financial information of Changle Shengshi is as follows for the three months ended December 31, 2012 and 2011:

	Three Months Ended December 31,
	2012		2011
Net sales	$	27,107,512	$	21,872,747
Gross profit		5,419,637		2,521,470
Income before taxes		2,425,764		252,900
Net Income		1,819,323		189,675
Company's share of net income		363,865		37,935
Elimination of intercompany profit		72,050		4,958
Company's share of net income as reported in statements of income	$	291,815	$	32,977

Summarized financial information of Changle Shengshi is as follows for the six months ended December 31, 2012 and 2011:

	Six Months Ended December 31,
	2012		2011
Net sales	$	52,980,052	$	46,300,852
Gross profit		10,851,212		5,553,236
Income before taxes		4,365,001		2,294,278
Net Income		3,273,751		1,720,708
Company's share of net income		654,750		344,142
Elimination of intercompany profit		123,926		37,251
Company's share of net income as reported in statements of income	$	530,824	$	306,890

In order to meet increasing demands for electricity and steam by Weifang Shengtai and Changle Paper, during the three months ended December 31, 2012, the Company increased investment in Changle Shengshi by 2,000,000 RMB (approximately $0.32 million) and Changle Paper invested a corresponding amount such that Weifang Shengtai and Changle Sunshine Paper Ltd. continue to be 20% and 80% owners, respectively, of Changle Shengshi. After the investment, the Company still owns 20% of Changle Shengshi.

Note 11 - Advance for construction

Advances amounted to $1,486,961 and $2,188,892 as of December 31, 2012 and June 30 2012, respectively. Advances for construction are paid to unrelated parties, interest free, and with no collateral and no guarantee.

Note 12 - Intangible assets

Intangible assets consisted of the following:

	December 31, 2012			June 30, 2012
Land use rights	$	3,821,448		$	3,711,034
Less: accumulated amortization		(488,982	)		(446,084	)
Land use rights, net		3,332,466			3,264,950

Software		21,514			10,886
Less: accumulated amortization		6,012	)		(4,689	)
Software, net		15,502			6,197
Total intangible assets, net	$	3,347,968		$	3,271,147

Intangible assets are reviewed at least annually and more often if circumstances dictate, to determine whether their carrying value has become impaired. The Company considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations. The Company also re-evaluates the periods of amortization to determine whether subsequent events and circumstances warrant revised estimates of useful lives. As of December 31, 2012 and June 30, 2012, the Company determined that there had been no impairment. For the three months ended December 31, 2012 and June 30, 2012, amortization expense relating to these intangible assets amounted to $22,458 and $59,368, respectively. For the six months ended December 31, 2012 and 2011, amortization expense for these intangible assets are amounted to $37,718 and $29,541, respectively. The Company increased $10,481 and $2,511 for software upgrade during the six months ended December 31, 2012 and during the year ended June 30, 2012, respectively.

The following table consists of the expected amortization expenses for the next five years:

Years ended December 31,	Amount
2013	$	56,000
2014		56,000
2015		56,000
2016		56,000
2017		56,000
Thereafter		3,067,968
Total	$	3,347,968

Note 13 - Value added tax

Enterprises or individu als who sell products, engage in repair and maintenance or import and export goods in the PRC are subject to a value added tax in accordance with Chinese laws. The standard value added tax rate is 17% of the gross sales price; however, for the Company’s corn, the VAT rate is 13%. A credit is available whereby VAT paid on the purchases of semi-finished products, raw materials used in the production of the Company's finished products, and payment of freight expenses can be used to offset the VAT due on sales of the finished products.

VAT on sales and VAT on purchases amounted to $8,042,082 and $9,873,956, respectively, for the three month ended December 31, 2012. VAT on sales and VAT on purchases amounted to $5,642,608 and $ 5,809,887, respectively, for the three months ended December 31, 2011. VAT on sales and VAT on purchases amounted to $14,669,253 and $16,744,350, respectively, for the six month ended December 31, 2012. VAT on sales and VAT on purchases amounted to $ 11,027,206 and $11,688,765, respectively, for the six month ended December 31, 2011. Sales and purchases are recorded net of VAT collected and paid as the Company acts as an agent for the Chinese government. VAT taxes are not impacted by the income tax holiday in the PRC.

Note 14 - Notes payable

Notes payable represents arrangements with various banks for payments to suppliers, which are normally due within one year. However, these notes can typically be renewed with the banks on an annual basis. As of December 31, 2012 and June 30, 2012, the Company’s notes payables consisted of the following:

	December 31,		June 30,
	2012		2012
Bank of China, due various dates form January 2013 to February 2013, $200,639 was returned in January 2013; and restricted cash required 100% of loan amount	$	585,865	$	4,184,153

Shenzhen Development Bank, due September 2012, and restricted cash required 100% of loan amount		-		3,167,414

Weifang Bank, due April 2013, and restricted cash required 50% of loan amount		6,420,443		6,334,827

China Merchants Bank, due July 2012, and restricted cash required 100% of loan amount		-		190,045

Bank of Communication, due February 2013, and restricted cash required 100% of loan amount		1,926,133		-

Zhongxin Bank, due March 2013, and restricted cash required 50% of loan amount		3,210,221		3,167,414

Minsheng Bank ,due June 2013,and restricted cash required 100% of loan amount		321,311

Qingdao Bank, due November 2012 and returned in full as of reporting date, and restricted cash required 100% of loan amount.				791,583

Total	$	12,463,973	$	17,835,706

Note 15 - Short term bank loans

Short term bank loans represent amounts due to various banks that are normally due within one year. However, these loans can typically be renewed with the banks on an annual basis. As of December 31, 2012 and June 30, 2012, the Company’s short term bank loans consisted of the following:

	December 31,		June 30,
	2012		2012
Loans from Bank of China, due various dates from February 2013 to May 2013; quarterly interest only payments; interest rates ranging from 6.10% to 7.544% per annum, guaranteed by an unrelated third party, unsecured.	$	15,554,662	$	20,271,447

Loans from Industrial and Commercial Bank of China, due various dates from January 2013 to September 2013; $8,988,620 was returned in January 2013;monthly interest only payments; interest rates ranging from 6.60% to 7.216% per annum, guaranteed by an unrelated third party and certain collateral, unsecured.		18,619,284		15,520,327

Loan from Agriculture Bank of China, due from September 2013 to November 2013; monthly interest only payments; interest rates of 7.872% per annum, guaranteed by an unrelated third party, unsecured.		6,420,443		6,334,827

Loan from Qingdao Bank, due December 2012, monthly interest only payments; interest rates of 7.0% per annum, guaranteed by an unrelated third party, unsecured.		-		-

Loan from Shenzhen Development Bank, due September 2013, monthly interest only payments; interest rates of 6.6% per annum, guaranteed by an unrelated third party, unsecured.		3,531,243		3,484,155

Loan from China Merchants Bank, due April 2013, monthly interest only payments; interest rate of 7.544% per annum, secured by certain properties.		3,210,221		3,167,414

Loan from Bank of Communications, due August 2013, monthly interest only payments; interest rates of 6.6% per annum, guaranteed by an unrelated third party, unsecured		4,815,332		4,751,120

Loan from China Construction Bank, due from July 2013 to October 2013, monthly interest only payments; interest rate ranging from 6.5784% to 7.2% per annum, guaranteed by certain collateral, unsecured		15,350,914		15,203,586

Loan from Minsheng Bank, due November 2013, monthly interest only payments; interest rates ranging from 6.56% to 7.20% per annum, guaranteed by an unrelated third party, unsecured		3,210,221		3,167,414

Loan from Zhongxin Bank, due March 2013, monthly interest only payments; interest rate of 7.872% per annum, guaranteed by certain collateral, unsecured		1,605,111		1,583,707

Loan from Weifang Bank, due December 2013, monthly interest only payments; interest rate of 7.20% per annum, guaranteed by certain collateral, unsecured		4,815,332		-

Total	$	77,132,764	$	73,483,997

Short term loan interest expenses, net of capitalized interest amounted to $1,041,112 and $1,733,922 for the three months ended December 31, 2012 and 2011, respectively. Short term loan interest expenses amounted to $2,474,288 and $1,743,213 for the six months ended December 31, 2012 and 2011, respectively.

Note 16 - Employee loans

From time to time, the Company borrows money from certain employees for cash flow purposes. These loans accrue interest at 9.6%, do not require collateral, and the principal is due upon demand. Employee loans amounted to $358,244 and $295,076 as of December 31, 2012 and June 30, 2012, respectively. Interest expenses related to these loans were approximately $8,156 and $6,649 for the three months ended December 31, 2012 and 2011, respectively. Interest expenses related to these loans were approximately $15,188 and $13,246 for the six months ended December 31, 2012 and 2011, respectively.

Note 17 - Income taxes

Our effective tax rates were approximately 31.4% and 33.0% for the three months ended December 31, 2012 and 2011, respectively. Our effective tax rates were approximately 32.1% and 32.0% for the six months ended December 31, 2012 and 2011, respectively. Our effective tax rate was lower than the U.S. federal statutory rate primarily due to the fact that our operations are carried out in foreign jurisdictions, which are subject to lower income tax rates.

Note 18 - Commitments and contingent liabilities

Guarantees

As of December 31, 2012, the Company had guaranteed loans on behalf of the unrelated party. The Company is obligated to perform under the guarantee if the guarantee company fails to pay principal and interest payments when due. The maximum potential amount of future undiscounted payments under the guarantee is $1.66 million for the guarantee company, including accrued interest. However, the guarantee given by the Company have been fully secured by their CEO’s personal assets. The Company has not recorded a liability for the guarantee because management estimates that the company is current in the payment obligations, and the likelihood of the Company having to make payments under the guarantee is remote.

Details of guarantee amounts to unrelated parties as of December 31, 2012 are as follows:

	Short Term
Company	Bank Loans

Qingdao Shizhan Technology Co., Ltd	$	1,605,111
Total	$	1,605,111

As of December 31, 2012, Weifang Century-Light Industry Co., Ltd guaranteed $6,741,465 for the Company, respectively.

Litigation

In April 2012, several law firms announced investigation of the Company in connection with the receipt of a going private proposal from Chairman and Chief Executive Officer Mr. Liu to acquire common stock at $1.65 per share in cash. To the best of our knowledge, no actions have been filed against the Company or its current officers and directors as of the date of this quarterly report.

Note 19 - Stockholders’ equity

On November 9, 2010, the Company effected a 1-for-2 reverse stock split of its issued and outstanding shares of Common Stock; reducing the number of its authorized shares of Common Stock and Preferred Stock by the same reverse stock split ratio. The reverse stock split and the reduction of the number of authorized shares of Common Stock and Preferred Stock were authorized by the stockholders of the Company at its annual general meeting of stockholders held on October 26, 2010. As of November 12, 2010, the outstanding and issued shares were approximately 9,584,912 shares (prior to the reverse stock split, the number outstanding was 19,169,805), before rounding up fractional shares. The authorized number of shares of Common Stock was reduced from 100,000,000 to 50,000,000, and the authorized number of shares of Preferred Stock was reduced from 5,000,000 to 2,500,000. These financial statements have been adjusted retroactively to reflect the reverse stock split.

In connection with the 1-for-2 reverse stock split, all outstanding warrants and options will have 1-for-2 reverse split with the exercise price doubled.

Warrants

On May 15, 2007, in connection with the Share Purchase Agreement, the Company issued 2,187,500 warrants, "Investor Warrants,” which carry an exercise price of $5.20 and a 5-year term. The Investor Warrants are callable if the Company's shares trade at or above $16.00 per share for 20 consecutive trading days and underlying shares are registered for resale. The Investor Warrants contain standard adjustment provisions upon stock dividend, stock split, stock combination, recapitalization, and a change of control transaction. During the year ended June 30, 2008, a total of 97,403 warrants were exercised by three stockholders.

Also in connection with the Share Purchase Agreement, the Company issued 109,375 warrants, "Placement Agent Warrants,” to Brill Securities, the Placement Agent. These Placement Agent Warrants have the same terms as the Investor Warrants. These warrants were issued on August 8, 2007.

Concurrent with the offering related to the Share Purchase Agreement, the Company issued 37,500 warrants to Chinamerica Fund, LLP and 12,500 warrants to Jeff Jenson, collectively, the "Lead Investor Warrants,” to compensate Chinamerica Fund LLP as the lead investor and Jeff Jenson in assisting in providing the shell company, West Coast Car Company. These Lead Investor Warrants have the same terms as the Investor Warrants except that they have an exercise price of $0.02 per share. In June 2008, Jeff Jenson exercised the 12,500 warrants issued to him. In November 2008, Chinamerica Fund, LLP exercised the 37,500 warrants issued to the fund.

All Investor Warrants, Placement Agent Warrants and Lead Investor Warrants meet the conditions for equity classification pursuant to ASC 815 (formerly SFAS 133, "Accounting for Derivatives") and ASC 815 (formerly EITF 00-19, "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock"). Therefore, these warrants were classified as equity and accounted for as common stock issuance cost.

All warrants were expired as of June 30, 2012. No warrants were issued for three months ending December 31, 2012.

	Warrants Outstanding			Warrants Exercisable			Weighted Average Exercise Price		Average Remaining Contractual Life
Outstanding, June 30, 2011		2,199,473			2,199,473		$	5.20		0.88
Expired		(2,199,473	)		(2,199,473	)
Granted		-			-			-		-
Forfeited		-			-			-		-
Exercised		-			-			-		-
Outstanding, June 30, 2012		-			-		$	-		-

Stock options

On January 4, 2008, the Company adopted the "Shengtai Pharmaceutical, Inc. 2007 Stock Incentive Plan,” the "Stock Incentive Plan.” The Company believes that awards under the Stock Incentive Plan better align the interests of its employees with those of its shareholders. Option awards are generally granted with an exercise price equal to the fair value of the Company's stock at the date of grant.

On May 14, 2008, the Company granted 250,000 stock options and 80,000 non-qualified stock options pursuant to the Stock Incentive Plan. All options have an exercise price of $6.68, which was the closing price on the date of grant, and expire five years after the date of grant. All options vest over a period of three years on a quarterly basis from the date of grant.

The Company uses the Black-Scholes option pricing model which was developed for use in estimating the fair value of options. Option pricing models require the input of highly complex and subjective variables, including the expected life of options granted and the Company's expected stock price volatility over a period equal to or greater than the expected life of the options. Because changes in the subjective assumptions can materially affect the estimated value of the Company's employee stock options, it is management's opinion that the Black-Scholes option valuation model may not provide an accurate measure of the fair value of the Company's employee stock options and that value may not be indicative of the fair value observed in a willing buyer/willing seller market transaction.

The assumptions used in calculating the fair value of options granted in 2008 using the Black-Scholes option pricing model are as follows:

Weighted average risk-free interest rate		3.22	%

Expected term		4 years

Expected volatility		146	%

Expected dividend yield		0	%

Weighted average grant-date fair value per option	$	6.68

The volatility of the Company's common stock was estimated by management based on the historical volatility; the risk free interest rate was based on Treasury Constant Maturity Rates published by the U.S. Federal Reserve for periods applicable to the estimated life of the options; and the expected dividend yield was based on the current and expected dividend policy. The fair value of the options was based on the Company's common stock price on the date the options were granted. Because the Company does not have sufficient applicable history of employee stock options activity, the Company uses the simplified method to estimate the life of the options by taking the sum of the vesting period and the contractual life and then calculating the midpoint, which is the estimated term of the options.

In the Chief Financial Officer Employment Agreement, the “Employment Agreement,” entered into on March 1, 2010 between the Company and Mr. Hu Ye, the former Chief Financial Officer, the Company granted Mr. Hu Ye an option to purchase 150,000 shares of common stock of the Company. The shares vest over 3 years starting March 1, 2010 and terminate on the third anniversary of the date of issuance of this option. The Company valued the shares at $5.20 per share, which represents 130 % of the fair market value being calculated in the private placement price on May 15, 2007. The fair values of stock options granted to the CFO were estimated at the date of grant using the Black-Scholes option-pricing model with the following assumptions:

Weighted average risk-free interest rate		2.79	%

Expected term		6.5 years

Expected volatility		149	%

Expected dividend yield		0	%

Weighted average grant-date fair value per option	$	5.20

The Chief Financial Officer Employment Agreement between the Company and Mr. Hu Ye was terminated in December 2010, and the 150,000 options granted were forfeited.

On June 1, 2010, the Company hired two directors, Mr. Yaojun Liu and Mr. Fei He. In the Employment Agreements entered into on June 1, 2010 between the Company and each director, the Company granted each director an option to purchase 40,000 shares of common stock of the Company. The shares vest over 3 years starting June 1, 2010 and terminate on the third anniversary of the date of issuance of this option. The Company valued the shares at $5.20 per share. The fair values of stock options granted to the two directors were estimated at the date of grant amounting $165,611 using the Black-Scholes option-pricing model with the following assumptions:

Weighted average risk-free interest rate		2.79	%

Expected term		3 years

Expected volatility		133	%

Expected dividend yield		0	%

Weighted average grant-date fair value per option	$	3.00

The stock option activity was as follows for the year ended December 31, 2012:

	Options outstanding			Weighted Average Exercise Price		Aggregate Intrinsic Value
Outstanding, June 30, 2011		255,000		$	6.22	$	1,274,500

Granted

Forfeited		(65,000	)		5.74		-

Exercised		-			-		-

Outstanding, June 30, 2012		190,000			6.31		903,500

Granted		-			-		-

Forfeited		-			-		-

Exercised		-			-		-

Outstanding, December 31, 2012		190,000		$	6.31	$	920,600

The Company’s forfeiture rate for the year ended December 31, 2012 is 0%.

Following is a summary of the status of options outstanding at December 31, 2012:

Outstanding Options						Vested Options
Average Exercise Price		Outstanding Options		Average Remaining Contractual Life		Average Exercise Price		Options
$	6.31		190,000		5.92	$	6.39		176,667

Compensation expense from stock options recognized for the three and six months ended December 31, 2012 were $0 and $0, respectively. Compensation expense from stock options recognized for the three and six months ended December 31, 2011 were $0 and $0, respectively. As of December 31, 2012, there is $27,602 estimated expense with respect to unvested stock-based awards yet to be recognized as an expense over the employee's remaining weighted average service period.

Note 20 - Statutory reserves

The laws and regulations of the PRC require that before a Sino-foreign cooperative joint venture enterprise distributes profits to its partners, it must first satisfy all tax liabilities, provide for losses in previous years, and make allocations in proportions determined at the discretion of the board of directors, after the statutory reserves. The statutory reserves include the surplus reserve fund, and the enterprise fund. These statutory reserves represent restricted retained earnings.

Surplus reserve fund

The Company is required to transfer 10% of its net income, as determined in accordance with the PRC’s accounting rules and regulations, to a statutory surplus reserve fund until such reserve balance reaches 50% of the Company’s registered capital. The transfer to this reserve must be made before distribution of any dividends to stockholders. For the three months ended December 31, 2012 and 2011, the Company transferred $33,435 and $(4,824) to this reserve. For the six months ended December 31, 2012 and 2011, the Company transferred $64,759 and $115,341 to this reserve. The surplus reserve fund is non-distributable other than during liquidation and can be used to fund previous years’ losses, if any, and may be utilized for business expansion or converted into share capital by issuing new shares to existing stockholders in proportion to their shareholding or by increasing the par value of the shares currently held by them, provided that the remaining reserve balance after such issue is not less than 25% of the registered capital.

Pursuant to the Company’s articles of incorporation, the Company is to appropriate 10% of its net profits as statutory surplus reserve up to $7,500,000. As of December 31, 2012 the Company had appropriated to the statutory reserve $4,290,884.

Enterprise fund

The enterprise fund may be used to acquire fixed assets or to increase the working capital to expand production and operations of the Company. No minimum contribution is required and the Company has not made any contribution to this fund as of December 31, 2012.

Note 21 - Retirement benefit plans

Regulations in the PRC require the Company to contribute to a defined contribution retirement plan for the benefit of all permanent employees. The Company is required to make contributions to the state retirement plan at 15% to 20% of the monthly base salaries of all current permanent employees. The PRC government is responsible for the administration and benefit liability to retired employees. For the three months ended December 31, 2012 and 2011, the Company made contributions in the amounts of $151,254 and $131,059, respectively, to the Company’s retirement plan. For the six months ended December 31, 2012 and 2011, the Company made contributions in the amounts of $306,505 and $272,431, respectively, to the Company’s retirement plan.

Note 22 - Related party transactions

The Company’s utilities (electricity and steam) are mostly provided by Changle Shengshi. As of December 31, 2012 and June 30, 2012, the Company’s accounts payable and accrued liabilities due to Changle Shengshi was $719,793 and $405,926, respectively, which related to a portion of the Company’s utilities being provided by Changle Shengshi. The Company’s transaction amounts with Changle Shengshi amounted to approximately $5,367,249 and $3,832,857 for the three months ended December 31, 2012 and 2011, respectively. The Company’s transaction amounts with Changle Shengshi amounted to approximately $9,981,351 and $7,267,830 for the six months ended December 31, 2012 and 2011, respectively.

From time to time, the Company borrows money from Qingtai Liu, the Company’s CEO and President, for cash flow purposes of the Company. The loans do not require collateral and the principal is due upon demand. Before January 1, 2009, the interest rate was at 7.2% for the first nine months, and then 10.8% thereafter until the full principal amounts are paid by the Company. After January 1, 2009, the interest rate was changed to 7.2% for the loan period. Employee loan from officer amounted to $37,460 and $37,027 as of December 31, 2012 and June 30, 2012, respectively. Interest expense related to this loan was approximately $774 and $3,056 for the three months ended December 31, 2012 and June 30, 2012, respectively. Interest expense related to this loan was approximately $1,541 and $3,056 for the six months ended December 31, 2012 and June 30, 2012, respectively.

As of December 31, 2012, the other receivable includes Company's advances of $2,199,002, to its purchasing department employees as purchase advances for corn purchases. This amount is secured by the personal assets of CEO as per guarantee extended by him.

Note 23 - Subsequent events

In January 2013, the Company obtained a note of $172,853 from Bank of China,and restricted cash required 100% of loan amount .

In February 2013, the Company obtained a short bank loan of $,815,332 from Industrial and Commercial Bank of China, due November 2013; monthly interest only payments; interest rate of 6.6% per annum, guaranteed by certain collateral, unsecured.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-Looking Statements

The following is a discussion and analysis of the financial condition and results of operations of Shengtai Pharmaceutical, Inc., the ("Company”) and should be read in conjunction with the Company’s financial statements and related notes contained in this Form 10-Q. This Form 10-Q contains forward looking statements that involve risks and uncertainties. You can identify these statements by the use of forward-looking words such as "may,” "will,” "expect,” "anticipate,” "estimate,” "believe,” "continue,” or other similar words. You should read statements that contain these words carefully because they discuss the Company’s future expectations, contain projections of the Company’s future results of operation or financial condition or state other “forward-looking" information. The Company believes that it is important to communicate its future expectations to its investors. However, there may be events in the future that the Company is unable to accurately predict or control. Those events as well as any cautionary language in this Form 10-Q provide examples of risks, uncertainties and events that may cause the Company’s actual results to differ materially from the expectations the Company describes in its forward-looking statements. You should be aware that the occurrence of the events described in this Form 10-Q could have a material adverse effect on the Company’s business, operating results and financial condition. Actual results may differ materially from current expectations.

Overview

We are, through our wholly owned subsidiary, Shengtai Holding Inc., and its wholly owned subsidiary in the People's Republic of China, (the "PRC”), WeifangShengtai Pharmaceutical Co., Ltd. (“WeifangShengtai”), a leading manufacturer and supplier of pharmaceutical grade glucose in the PRC. We believe that we are a market leader and preferred domestic supplier of pharmaceutical grade glucose. We estimate that we have about over 30% market share in Mainland China. We also manufacture glucose, cornstarch and other products for the food and beverage industry.

Our cornstarch production facility has a maximum capacity of 400,000 tons per year. The facility allows us to use self-produced cornstarch to produce glucose and ensure the adequacy and quality of the cornstarch we use. Since cornstarch is produced on our premises, we are able to eliminate the shipping cost of the cornstarch to our glucose production facility and thus, lower our manufacturing costs.

In October 2011, we completed the construction of an additional warehouse that can store an additional 14,000 tons of corn. As a result, we have successfully expanded our corn storage from 36,000 tons to 50,000 tons. The expansion of our warehousing capacity will allow us to have the ability to store more corn and better control the cost of production.

In July 2008, we built and put in use our dextrose anhydrous production lines with a designed capacity 60,000 tons.

Our business may be severely affected by movements in the commodity markets. Corn is the principal raw material for cornstarch and the price of cornstarch as a commodity tends to follow the price of corn. In September 2008, corn prices began decreasing due to large corn harvests. However, by July 2009, corn prices began to increase. This trend continued into fiscal year 2012. The prices decreased slighted in fiscal year 2013. Our corn purchase prices for the six months ended December 31, 2012 were approximately 3.25% lower than for the same period in 2011. While it is hard to accurately predict the trend of corn prices, we remain focused on improving our pricing ability and maintaining a stable profit.

The Chinese government has been increasing its efforts in controlling corn prices. We believe that these government efforts will continue to have mixed effects on our operations. Stable corn prices will help maintain the availability of raw materials and tend to stabilize our gross profit margin over time, although market and economic conditions may have negative effects on our operations.

In addition to our pharmaceutical glucose and cornstarch products, we also produce other products such as dextrin, corn embryo, fibers, and protein power, which are used for pharmaceutical, food and beverages, and other production purposes. The net sales generated from these products were $22.80 million and $35.45 million, and constituted approximately 35.56% and 31.42% of our total net sales for the three and six months ended December 31, 2012, respectively.

We believe that production capacity and product quality are the key factors in maintaining and improving our competitive position and enhancing our long-term competitiveness. As a result, we emphasize (i) product quality control, (ii) enhancement of operating efficiency and employee competence, (iii) expansion of geographical coverage and diversification of customer base and (iv) expansion of our production capacity utilization.

We have a six-tier quality control system and a well-equipped quality inspection center to ensure timely detection and reprocessing of non-conforming products.

Our glucose production facility passed GMP inspection and our facilities and many of our products are fully certified for GMP, ISO9001, ISO22000 and HACCP international quality standards and globally certified Halal, Kosher and NON-GMO IP.

Our sales network presently covers almost all provinces of Mainland China except the Tibet Autonomous Region.

During the six months ended December 31, 2012, we used internally 85,155 metric tons of cornstarch to satisfy our own glucose production needs. The rest of the cornstarch was or will be sold to outside customers in the pharmaceutical, food and beverage and other industries. Cornstarch sales amounted to $40.75 million and accounted for 36.11% of our total net sales for the six months ended December 31, 2012.

During the six months ended December 31, 2012, we sold a total of 65,761 metric tons of glucose, and our sales of pharmaceutical grade glucose and other glucose products were $36.64 million, or 32.47% of our net sales. During the three months ended December 31, 2012, we sold a total of 33,228 metric tons of glucose, and our sales of pharmaceutical grade glucose and other glucose products were $18.50 million, or 28.87% of our net sales.

For the six months ended December 31, 2012, we exported products to approximately 59 countries, with the Netherlands, Korea and Japan being the leading importers. For the six months ended December 31, 2012, our international sales comprised approximately 22.04% of our total net sales, as compared to approximately 18.19% during the same period in 2011. For the three months ended December 31, 2012, our international sales comprised approximately 25.29% of our total net sales, as compared to approximately 17.50% of our total net sales during the same period in 2011. Glucose, cornstarch, and other products equal 27.38%, 0%, and 72.62% of the total exporting sales for the six months ended December 31, 2012, respectively, as compared to 41.95%, 0.24%, and 57.81% of the total exporting sales for the six months ended December 31, 2011, respectively. Glucose, cornstarch, and other products equal 24.87%, 0%, and 75.13% of the total exporting sales for the three months ended December 31, 2012, respectively, as compared to 50.09%, 0.00%, and 49.91% of the total exporting sales for the three months ended December 31, 2011, respectively.

Our target customers are drug makers, medical supply companies, medical supply exporters and food and beverage companies. We constantly strive to broaden and diversify our customer base. We believe that a broader customer base will mitigate our reliance on certain major customers. We believe that a broader market for our products can increase demand for our products, reduce our vulnerability to market changes and provide additional areas of growth in the future. For the six months ended December 31, 2012, our top ten customers accounted for 47.15% of our total net sales.

Results of Operations

Six Months Ended December 31, 2012 Compared with Six Months Ended December 31, 2011

The following table shows our operating results for the six months ended December 31, 2012 and 2011:

	Six months Ended December 31, 2012			Six months Ended December 31, 2011
Net Sales	$	112,848,264		$	82,988,873
Cost of Sales		101,801,487			75,562,795
Gross Profit		11,046,777			7,426,078
Selling, General and Administrative Expenses		7,188,542			5,179,077
Income From Operations		3,858,235			2,247,001
Other (Expense) Income, Net		(3,184,853	)		(1,044,038	)
Income Before Provision For Income Taxes		673,382			1,202,963
Provision For Income Taxes		215,865			384,468
Net Income	$	457,517		$	818,495

The following table shows the breakdown of production and sales by product categories, and between self-use by WeifangShengtai and the sales of cornstarch to third parties, for the six months ended December 31, 2012 and 2011:

Products	Metric Tons Six months ended December 31, 2012			Metric Tons Six months ended December 31, 2011			Net Sales (%) Six months ended December 31, 2012			Net Sales (%) Six months ended December 31, 2011

Glucose–Sales		65,761			67,234		$	36,642,259(32.47	)%		39,102,593(47.12	)%

Cornstarch-Self use		86,155(47.02	)%		77,001(60.35	)%
Cornstarch-Sales		97,078(52.98	)%		50,591(39.65	)%	$	40,751,632(36.11	)%		21,526,673(25.94	)%

Total Cornstarch		183,233(100	)%		127,592(100	)%
Other Sales		92,664			67,234		$	35,454,373(31.42	)%		22,359,606(26.94	)%
Total Sales		65,761					$	112,848,264(100	)%	$	82,988,873(100	)%

Net sales for the six months ended December 31, 2012 were $112,848,264, an increase of $29,859,391 or 35.98%, compared with $82,988,873 for the same period in 2011. The increase in net sales primarily resulted from increased sales of cornstarch for the six months ended December 31, 2012, compared to the same period in 2011. For the six months ended December 31, 2012, the quantities of our glucose products, cornstarch products and other products sold (decreased)/increased approximately (2.19)%, 91.89%, and 58.31%, respectively. And sales amount of our glucose products, cornstarch products and other products sold (decreased)/increased approximately (7.46%), 86.95%, 55.26%, respectively. The increased sales quantities of cornstarch is due to a substantial increase of our Slurry (liquid corn starch) sales, which increased approximately 14,869.33 tons or 995.44% for the six months ended December 31, 2012 compared to 1493.74 tons for the same period last year. The increased sales of our cornstarch products are also caused by new clients and a higher demand as market supplies decreased after some smaller competitors stop their operation or supply due to market competition. Net sales from exports for the six months ended December 31, 2012 were $24,870,493, an increase of approximately 64.73%, compared with $15,097,352 for the same period in 2011. The increase is mainly attributable to the increased exporting sales of corn germ meal during the six months ended December 31, 2012 compared to the same period in 2011, when the export of corn germ meal was nil.

Cost of sales for the six months ended December 31, 2012 was $101,801,487, an increase of $26,238,692 or 34.72%, compared with $75,562,795 for the same period in 2011. The increase in cost of sales was in line with the increased net sales.

Gross profit for the six months ended December 31, 2012 was $11,046,777, an increase of $3,620,699 or 48.76%, compared with $7,426,078 for the same period in 2011. The increase of gross profit is in line with the increased sales. Gross profit margin for the six months ended December 31, 2012 was 9.79%, an increase of 0.84% as compared to the gross profit margin of 8.95% for the same period in 2011. The reason for the increase of gross profit margin is mainly because the price of corn, our main raw material, decreased approximately 3.25% for the six months ended December 31, 2012 compared to the same period last year whereas the average sales prices of glucose products, cornstarch products and other products increased as compared to the same period last year. We believes that our actions to improve gross profit margin, such as expanding raw material storage facilities to reduce the impact of fluctuation on the price of our raw materials, benefited us in improving our profitability.

For the six months ended December 31, 2012, selling, general and administrative expenses were $7,188,542, an increase of $2,009,465 or 38.80%, compared to $5,179,077 for the six months ended December 31, 2011. The in crease of selling, general, and administrative expenses is caused by increased selling, general and administrative expenses in PRC, offset by decreased selling, general and administrative expenses in the United States. Our selling, general and administrative expenses in the United States ended December 31, 2012 decreased by $194,829 compared to the same period in 2011. The decrease is mainly due to decreased salary expenses of $114,499 and decreased audit expenses of $53,802 and decreased taxation expenses of $22,258. The selling, general and administrative expenses from our PRC operating entities was 6,998,536, an increase of $2,154,227 or 44.47% for the six months ended December 31, 2012 compared to $4,844,309 for the same period in 2011. The selling expenses from our PRC operating entities is $5,276,248, an increase of $2,015,040 or 61.79% in the six months ended December 31, 2012 compared to the same period in 2011. The increase in selling expenses is mainly attributable to the increase in shipping and handling expenses of $1,961,705 as a result of increased sales quantities and increased gas price. The general and administrative expenses incurred in PRC increased $139,188, or 8.79% in the six months ended December 31, 2012 compared to $1,583,100 for the same period in 2011. The increase of general and administrative expenses is mainly attributable to the increase in salary expenses of $101,382.

Net income for the six months ended December 31, 2012 was $457,517, a decrease of $360,978 or 44.10%, compared with $818,495 for the same period in 2011. The decrease in net income was primarily attributable to the increased of selling, general and administrative expenses of $2,009,465 and by increased interest expenses of $1,357,654, offset by the increase of gross profit of $3,620,699.

Three Months Ended December 31, 2012 Compared with Three Months Ended December 31, 2011

The following table shows our operating results for the three months ended December 31, 2012 and 2011:

	Three months Ended December 31, 2012			Three months Ended December 31, 2011
Net Sales	$	64,103,621		$	42,933,425
Cost of Sales		58,114,822			38,892,394
Gross Profit		5,988,799			4,041,031
Selling, General and Administrative Expenses		3,898,845			3,026,462
Income From Operations		2,089,954			1,014,569
Other (Expense) Income,Net		(1,709,199	)		(1,063,552	)
Income Before Provision For Income Taxes		380,755			(48,983	)
Provision For Income Taxes		119,539			16,079
Net Income	$	261,216		$	(65,062	)

Products	Metric Tons Three months ended December 31, 2012			Metric Tons Three months ended December 31, 2011			Net Sales (%) Three months ended December 31, 2012			Net Sales (%) Three months ended December 31, 2011

Glucose–Sales		33,228			36,492		$	18,504,923(28.87	)%		21,243,370(49.48	)%

Cornstarch-Self use		50,511(47.82	)%		40,233(63.42	)%
Cornstarch-Sales		55,115(52.18	)%		23,207(36.58	)%	$	22,800,273(35.57	)%		9,951,313(23.18	)%

Total Cornstarch		105,626(100	)%		63,440(100	)%
Other Sales		60,085			31,083		$	22,798,425(35.56	)%		11,738,741(27.34	)%
Total Sales							$	64,103,621(100	)%	$	42,933,425(100	)%

Net sales for the three months ended December 31, 2012 were $64,103,621, an increase of $21,170,196 or 49.31%, compared with $42,933,425 for the same period in 2011. The increase in net sales primarily resulted from increased cornstarch and other products sales. For the three months ended December 31, 2012, the quantities of our glucose products, cornstarch products and other products sold were 33,228 tons, 55,115 tons, and 60,085 tons , respectively, increase/decrease of approximately (8.94%), 83.38%, and 93.31%, respectively. The increased sales quantities of cornstarch is due to a substantial increase of our Slurry sales, which increased approximately 6,848 tons or 687.03% for the three months ended December 31, 2012 compared to 996.74 tons for the same period in 2011. Net sales from exports for the three months ended December 31, 2012 were $16,214,168, an increase of approximately 115.79%, compared with $7,513,799 for the same period in 2011. The increase is mainly attributable to the increased exporting sales of corn germ meal during the three months ended December 31, 2012 compared to the same period last year, when the export of corn germ meal was nil.

Cost of sales for the three months ended December 31, 2012 was $58,114,822, an increase of $19,222,428 or 49.42%, compared with $38,892,394 for the same period in 2011. The increase in cost of sales was in line with increased sales.

Gross profit for the three months ended December 31, 2012 was $5,988,799, an increase of $1,947,768 or 48.20%, compared with $4,041,031 for the same period in 2011. The increase of gross profit is in line with the increased sales. Gross profit margin for the three months ended December 31, 2012 was 9.34%, a decrease by 0.07% as compared to the gross profit margin of 9.41% for the same period in 2011. The reason for the decrease of gross profit margin is mainly because the average sales prices decreased as compared to the same period last year.

For the three months ended December 31, 2012, selling, general and administrative expenses were $3,898,845, an increase of $872,383 or 28.83%, compared to $3,026,462 for the three months ended December 31, 2011. The in crease of selling, general, and administrative expenses is caused by increased selling, general and administrative expenses in PRC, offset by decreased selling, general and administrative expenses in the United States. The Company’s selling, general and administrative expenses in the United States ended December 31, 2012 decreased by $49,086 compared to the same period in 2011. The decrease is mainly due to decreased salary expenses of $57,874. The selling, general and administrative expenses from our PRC operating entities increased by $123,106 for the three months ended December 31, 2012 compared to $3,702,602 for the same period in 2011. The selling expenses from our PRC operating entities increased by $1,198,829 or 73.39% in the quarter ended December 31, 2012 compared to the same period in 2011. The increase is mainly attributable to the increase in shipping and handing expenses of $1,225,986 and other expenses of $73,717 offset by decreased package expenses of $14,274,decreased commodity inspection fee of $6,619,decreased exhibition expenses of $5,930,and decreased carfares of $79,156. The general and administrative expenses incurred in PRC increased $248,639 in the quarter ended December 31, 2012 compared to $744,713 for the same period in 2011.

Net income for the three months ended December 31, 2012 was $261,216, an increase of $326,278 or 501.49%, compared with net loss $65,062 for the same period in 2011. The increase in net income was primarily attributable to the increased gross profit of $1,947,768, offset by increased selling, general and administrative expenses of $872,383 and by increased interest expenses of $518,770.

Liquidity and Capital Resources

Operating Activities

Net cash provided by operating activities for the six months ended December 31, 2012 was $1,285,014, an increase of 113.47%, or $10,824,936 compared with $9,539,722 used in operating activities for the same period in 2011. The increased cash provided by operating activities is mainly due to decreased other receivable, decreased notes receivable, increased accounts payable and accrued liabilities, increased customer deposit, offset by more payments made for prepayments and other assets during the quarter ended December 31, 2012 compared to the same period in 2011.

Investing Activities

Net cash provided by investing activities for the six months ended December 31, 2012 was $1,802,731, an increase of 29,692.28%, or $1,796,680, compared with $6,051 provided by investing activities for the same period in 2011. The increase is due to increased payments made for construction and less equity investment during the quarter ended December 31, 2012 compared to the same period in 2011.

Financing Activities

Net cash used in financing activities for the six months ended December 31, 2012 was $2,569,251, a decrease of 73.74%, or $7,213,247, compared with $9,782,506 provided by financing activities for the same period in 2011. The decrease is mainly due to less net borrowings of short term bank loans offset by more net payments of notes payable-bank during the six months ended December 31, 2012 compared to the same period last year.

Loans

Other than the equity financing in 2008, our PRC operating subsidiary, WeifangShengtai financed its operations and capital expenditure requirements primarily through bank loans and operating income. WeifangShengtai had a total of $77,132,764 and $73,483,997 short term bank loans outstanding as of December 31, 2012 and June 30, 2012, respectively. The loans were secured by WeifangShengtai’s properties and accounts receivable. The terms of all these short term loans were all for one year. WeifangShengtai has never defaulted on any loans. In addition, Weifang Shengtai had $12,463,973 and $17,835,706 in short-term notes due to the banks as of December 31, 2012 and June 30, 2012, respectively. These notes were due within one year and secured by 50% to 100% of the loan amount in restricted cash. Some loans were guaranteed by unrelated third parties.

WeifangShengtai does not have any long term loans from local banks. The outstanding long-term loans, or the non-current portion of payables, and the non-current portion of capital lease obligation, which can be classified as long term liabilities, were $0 and $0, as of December 31, 2012 and June 30, 2012, respectively.

Guarantees

We have guaranteed certain borrowings of other unrelated third parties including short term bank loans, lines of credit and bank notes. The total guaranteed amounts were $1,605,111 and $7,918,534 as of December 31, 2012 and June 30, 2012. Some unrelated third parties have guaranteed approximately $6,741,465 and $11,402,689 of our debt, as of December 31, 2012 and June 30, 2012, respectively.

Future Cash Commitments and Needs

The Company estimates the need for capital to run new production facilities. The exact amount will be determined based on both the market demand for the Company’s products and the time needed for these facilities to run at full capacity. The Company will carefully review its financial condition and consider financing with internally generated cash, bank loans or additional equity. The Company expects that its proceeds from operating cash flows and its cash balances, together with amounts available under its loans, will be sufficient to meet its anticipated liquidity needs for the next twelve months.

Critical Accounting Policies and Estimates

We have disclosed in the notes to our financial statements those accounting policies that we consider to be significant in determining our results of operations and our financial position which are incorporated by reference herein. The following reflects the more critical accounting policies that currently affect our financial condition and results of operations.

Revenue recognition

The Company recognizes revenue when the goods are delivered, title has passed, pricing is fixed, and collection is reasonably assured. Sales revenue represents the invoiced value of goods, net of value-added tax (“VAT”), and estimated returns of product from customers. Most of the Company’s products sold in the PRC are subject to a VAT rate of 17% of the gross sales price or at a rate approved by the Chinese local government. This VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing their finished products and certain freight expenses. We allow our customers to return products only if our product is later determined by us to be ineffective. Based on our historical experience over the past six years, product returns have been insignificant throughout all of our product lines. Therefore, we do not estimate deductions or allowance for sales returns. Sales returns are taken against revenue when products are returned from customers. Sales are presented net of any discounts given to customers.

Use of estimates

In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant estimates, required by management, include the recoverability of long-lived assets and the valuation of inventories. Actual results could differ from those estimates.

Accounts receivable

In the normal course of business, the Company extends credit to its customers without requiring collateral or other security interests. Management reviews its accounts receivable at each reporting period to provide for an allowance against accounts receivable for an amount that could become uncollectible. This review process may involve the identification of payment problems with specific customers. The Company estimates this allowance based on the aging of the accounts receivable, historical collection experience, and other relevant factors, such as changes in the economy and the imposition of regulatory requirements that can have an impact on the industry. These factors continuously change, and can have an impact on collections and the Company’s estimation process. These impacts may be material.

Certain accounts receivable amounts are charged off against allowances after designated periods of collection. Subsequent cash recoveries are recognized as income in the period when they occur.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method, with a 3% residual value, over the estimated useful lives of the assets.

Foreign currency translation

Our functional currency is Renminbi (“RMB”). Foreign currency transactions are translated at the applicable rates of exchange in effect at the transaction dates. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated at the applicable rates of exchange in effect at that date. Revenues and expenses are translated at the average exchange rates in effect during the reporting period.

Translation adjustments arising from the use of different exchange rates from period to period are included as a component of stockholders’ equity as “Accumulated Other Comprehensive Income.” Gains and losses resulting from foreign currency translations are included in Accumulated Other Comprehensive Income.

Recently issued accounting pronouncements

FASB Accounting Standards Update No. 2011-08

FASB Accounting Standards Update No. 2011-11

FASB Accounting Standards Update No. 2012-02

Item 3. Quantitative and Qualitative Disclosures about Market Risk.

Not applicable.

Item 4. Controls and Procedures.

Disclosure Controls and Procedures

Mr. Qingtai Liu, the Company’s Chief Executive Officer, and Mr. Yongqiang Wang, the Company’s current financial controller, have evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the period covered by this Report. Based on that evaluation which, among other things, identified personnel turnover in the areas concerned, mainly referring to our chief financial officer’s resignations during the last two years, the Company’s officers concluded that disclosure controls and procedures were not effective and was not adequately designed to ensure that the information required to be disclosed by the Company in the reports the Company submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the applicable rules and forms and that such information was accumulated and communicated to the Company’s chief executive officer and chief financial officer in a manner that allowed for timely decisions regarding required disclosure.

Notwithstanding the existence of such material weakness in our internal controls over financial reporting, our management, including our Chief Executive Officer, believes that the financial statements included in this report fairly present in all material respects our financial condition, results of operations and cash flows for the periods presented.

Management is committed to remediating the material weakness as quickly as possible. Additionally, and in recognition of immediate financial reporting needs, the Company intends to implement additional controls and procedures during the current fiscal year to continue to ensure timely and accurate financial reporting objectives. Such additional controls and procedures may include: The retention of a U.S. based CPA as Chief Financial Officer with U.S. GAAP experience and appropriate knowledge of internal controls over financial reporting, for purposes of appropriate oversight of the financial reporting process and continued training of the accounting staff; recruitment of additional personnel with relevant U.S. GAAP experience to enhance our financial reporting and internal control function; and retention of the services of a consultant for advisory services with respect to SOX 404 compliance.

Changes in Internal Control over Financial Reporting

During the quarter ended December 31, 2012, there has been no material change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect the Company’s internal control over financial reporting.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control systems are met. Because of the inherent limitations in all control systems no evaluation of controls can provide absolute assurance that all control issues, if any, within a company have been detected. Such limitations include the fact that human judgment in decision-making can be faulty and that breakdowns in internal control can occur because of human failures, such as simple errors or mistakes or intentional circumvention of the established process.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

From April through October 2012, several law firms announced investigation of the Company in connection with the receipt of a going private proposal from Chairman and Chief Executive Officer Mr. Liu to acquire common stock at $1.65 per share in cash. To the best of our knowledge, no actions have been filed against the Company or its current officers and directors as of the date of this quarterly report.

Item 1A. Risk Factors.

Not Applicable.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not Applicable.

Item 5. Other Information.

Not Applicable.

Item 6. Exhibits.

Exhibit No.		Title of Document
3.1		Amended and Restated Certificate of Incorporation as filed with the Secretary of State of the State of Delaware on March 10, 2004, as amended to date (incorporated by reference to Exhibit 3.1 to the registrant’s Form 10-SB filed on September 26, 2005 in commission file number 000-51312).

3.2		Certificate of Amendment filed with Secretary of State of Delaware on November 9, 2010 (incorporated by reference to Exhibit 99.1 to the registrant's Form 8-K filed on November 12, 2010).

3.3		Bylaws of the registrant (incorporated by reference to Exhibit 3.2 to the registrant’s Form 10-SB filed on September 26, 2005 in commission file number 000-51312).

4.1		Form of Warrants to Investors (incorporated by reference to Exhibit 4.1 to the registrant’s Form 8-K filed on May 21, 2007 in commission file number 000-51312).

10.1		Share Exchange Agreement dated May 15, 2007 by and among the Company and Shengtai Holding, Inc. (incorporated by reference to Exhibit 10.1 to the registrant’s Form 8-K filed on May 21, 2007 in commission file number 000-51312).

10.2		Share Purchase Agreement dated as of May 15, 2007 between the Company and the Purchasers (incorporated by reference to Exhibit 10.2 to the registrant’s Form 8-K filed on May 21, 2007 in commission file number 000-51312).

10.3		Research and Development Agreement between Hebei University and Technology of the Company, dated December 8, 2010 (incorporated by reference to Exhibit 10.3 to the registrant’s Form 10-K filed on October 6, 2011 in commission file number 000-51312).

10.4		Employment Agreement between the Company and Qingtai Liu, dated July 8th , 2009 (incorporated by reference to Exhibit 10.4 to the registrant’s Form 10-K filed on October 6, 2011 in commission file number 000-51312).

10.5		Employment Agreement between the Company and Yongqiang Wang, dated September 1st, 2009 (incorporated by reference to Exhibit 10.3 to the registrant’s Form 10-K/A filed on April 9, 2012 in commission file number 000-51312).

10.6		2010 Addendum between the Company and Qingtai Liu, dated June 30, 2010 (incorporated by reference to Exhibit 10.3 to the registrant’s Form 10-K/A filed on April 9, 2012 in commission file number 000-51312).

10.7		2010 Addendum between the Company and Yongqiang Wang, dated June 30, 2010 (incorporated by reference to Exhibit 10.3 to the registrant’s Form 10-K/A filed on April 9, 2012 in commission file number 000-51312).

10.8		2011 Addendum between the Company and Qingtai Liu, dated June 30, 2011 (incorporated by reference to Exhibit 10.8 to the registrant’s Form 10-K/A filed on April 9, 2012 in commission file number 000-51312).

10.9		2011 Addendum between the Company and Qingtai Liu, dated June 30, 2011 (incorporated by reference to Exhibit 10.8 to the registrant’s Form 10-K/A filed on April 9, 2012 in commission file number 000-51312).

16.1		Letter dated October 20, 2009 from Moore Stephens Wurth Frazer and Torbet, LLP (incorporated by reference to Exhibit 16.1 to the registrant’s Form 8-K filed on October 21, 2009 in commission file number 000-51312).

21.1		List of subsidiaries of the registrant (incorporated by reference to Exhibit 21.1 to the registrant’s Form 8-K filed on May 21, 2007 in commission file number 000-51312).

31.1		Certification of the Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification of the Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification of the Principal Executive Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2		Certification of the Principal Financial Officer pursuant to U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance Document*

101.SCH		XBRL Taxonomy Extension Schema*

101.CAL		XBRL Taxonomy Extension Calculation Linkbase*

101.DEF		XBRL Taxonomy Extension Definition Linkbase*

101.LAB		XBRL Taxonomy Extension Label Linkbase*

101.PRE		XBRL Extension Presentation Linkbase*

The Exhibits attached to this Form 10-Q shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to liability under that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: February 14, 2013

	SHENGTAI PHARMACEUTICAL, INC.

	By:	/s/ Qingtai Liu
		Qingtai Liu
		Chief Executive Officer
		(Principal Executive Officer)

	By:	/s/ Yongqiang Wang
		Yongqiang Wang
		Financial Controller
		(Principal Financial Officer)