-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FLi0TO71zZZpU1U4sXWQCp3FCGL5JRbfpWIsL8UPXzWfG7SSHjDehv5eeJzbuAnX 075DYaPGFslOKjx7P4TLQQ== 0001144204-09-058689.txt : 20100104 0001144204-09-058689.hdr.sgml : 20100101 20091113101039 ACCESSION NUMBER: 0001144204-09-058689 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20091113 ITEM INFORMATION: Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review FILED AS OF DATE: 20091113 DATE AS OF CHANGE: 20091118 FILER: COMPANY DATA: COMPANY CONFORMED NAME: RENHUANG PHARMACEUTICALS INC CENTRAL INDEX KEY: 0000926844 STANDARD INDUSTRIAL CLASSIFICATION: PHARMACEUTICAL PREPARATIONS [2834] IRS NUMBER: 881273503 STATE OF INCORPORATION: NV FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-24512 FILM NUMBER: 091179504 BUSINESS ADDRESS: STREET 1: NO. 281, TAIPING ROAD, TAIPING DISTRICT STREET 2: HARBIN, HEILONGJIANG PROVINCE, CITY: PEOPLES REPUBLIC OF STATE: F4 ZIP: 150050 BUSINESS PHONE: 86-451-5762-0378 MAIL ADDRESS: STREET 1: NO. 281, TAIPING ROAD, TAIPING DISTRICT STREET 2: HARBIN, HEILONGJIANG PROVINCE, CITY: PEOPLES REPUBLIC OF STATE: F4 ZIP: 150050 FORMER COMPANY: FORMER CONFORMED NAME: ANZA CAPITAL INC DATE OF NAME CHANGE: 20020521 FORMER COMPANY: FORMER CONFORMED NAME: E-NET FINANCIAL COM CORP DATE OF NAME CHANGE: 20000317 FORMER COMPANY: FORMER CONFORMED NAME: E-NET COM CORP DATE OF NAME CHANGE: 20000127 8-K/A 1 v166097_8ka.htm Unassociated Document
 
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549

Form 8-K
Amendment No. 1

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 13, 2009


Renhuang Pharmaceuticals, Inc.
(Exact name of registrant as specified in its charter)


Nevada
(State or other
jurisdiction of incorporation)
  
O-24512
(Commission
File Number)
  
88-1273503
(I.R.S. Employer
Identification No.)
         
         
No. 281, Taiping Road, Taiping District,
Harbin, Heilongjiang Province, 150050
P. R. China
(Address of principal executive offices)  (zip code)
         
         
86-451-5762-0378
(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:

o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
EXPLANATORY NOTE
This amendment no. 1 to our Current Report on Form 8-K initially filed with the Securities and Exchange Commission on October 1, 2009 is being filed to disclose the circumstances that led to the discovery of the error described in this Form 8-K/A.
 
 
 
 
  
Item 4.02
Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
 
 On September 18, 2009, the management of Renhuang Pharmaceuticals, Inc., a Nevada corporation (the “Company”), concluded that the Company’s previously issued audited consolidated financial statements for the year ended October 31, 2008, included in the Company’s Annual  Report on Form 10-K filed with the U.S. Securities and Exchange Commission on September 8, 2009 (the “Form 10-K”), contained the errors specified below and should no longer be relied upon. Therefore, the Company plans to restate its financial statements for such period and will present the restated financial statements in an amendment to the Form 10-K, which the Company expects to file as soon as practicable.  Such restatement pertains to the following issue:
 
 
·
The Company provides incentive sales rebate to its sales agents.  The rebate rate, which is determined on a product basis, averaged sixteen percent of sales for the year ended October 31, 2008. We understated the sales rebate in 2008 by RMB 11,904,896 (approx. US$ 1.7 million).  This amount was an audit adjustment in 2007, recorded to reflect 2007 sales rebate on an accrual basis.  As we booked the sales rebate using the  cash basis, our prior auditor proposed an adjusting entry to record unaccrued sales rebate. In 2008, our accountant staff followed the same logic to adjust the sales rebate.  Firstly, we reversed the 2007 rebate payable of RMB 11,904,896 as it was paid in 2008 already. Secondly, we recorded the 2008 unaccrued sales rebate of RMB 14,670,000 (i.e. rebate incurred RMB 57,993,198 – rebate booked in expenses RMB 43,323,178 = RMB 14,670,000). However, when we calculated the understated sales rebate for 2008, we disregarded the RMB 11,904,896 that was included in cash payments of RMB 43,323,178. Therefore, the sales rebate expenses account was understated by RMB 11,904,896 (approx. US$ 1.7 million), resulting in sales overstatement of approximately US$ 1,7 million for the year ended October 31, 2008.
 
The decision to restate the financial statements as of and for the year ended October 31, 2008 was approved by the Company’s board of directors (the “Board”) on September 18, 2009. Representatives of the Board and members of the Company’s executive management team have discussed the above matters with the Company’s independent registered public accounting firm.

The restatement will affect the following financial statement line items for the year ended October 31, 2008:
 
Assets as of October 31, 2008
  
As Originally Reported
    
To Be Restated
  
             
CURRENT ASSETS
            
Accounts receivable, net
    
22,588,580
      
20,844,478
  
TOTAL CURRENT ASSETS
    
35,128,995
      
33,384,894
  
TOTAL ASSETS 
    
37,749,944
      
36,005,843
  
 
Liabilities and Stockholders’ Equity
 as of October 31, 2008
  
As Originally Reported
    
To Be Restated
  
             
Reserves
  
3,036,617
    
2,867,674
  
Retained earnings
    
22,765,757
      
21,245,267
  
Accumulated other comprehensive income
    
3,355,986
      
3,301,318
  
TOTAL STOCKHOLDERS’ EQUITY 
    
35,788,857
      
34,044,756
  
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
    
37,749,944
      
36,005,843
  
 
 
 
 

Income and Comprehensive Income
 for the Year Ended October 31, 2008
  
As Originally Reported
    
To Be Restated
  
             
Sales
  
36,163,919
    
34,474,490
  
Gross Profit
    
20,183,281
      
18,493,852
  
Income from Operations
    
11,862,836
      
10,173,407
  
Net Income
    
11,980,528
      
10,291,099
  
Foreign Currency Translation Adjustment
    
2,446,528
      
2,391,856
  
Comprehensive Income
    
14,427,056
      
12,682,955
  
Basic Earnings Per Share
    
0.34
      
0.29
  
Diluted Earnings Per Share
    
0.34
      
0.29
  
 
Changes in Stockholders’ Equity
for the Year Ended October 31, 2008
  
As Originally Reported
    
To Be Restated
  
             
Transfer to reserves
  
1,194,883
    
1,025,940
  
Balance at October 31, 2008, Reserves
    
3,036,617
      
2,867,674
  
Balance at October 31, 2008, Retained Earnings
    
22,765,757
      
21,245,271
  
Balance at October 31, 2008, Accumulated Other comprehensive income
    
3,355,986
      
3,301,314
  
Balance at October 31, 2008, Total Stockholders' Equity
    
35,788,857
      
34,044,756
  
 
Cash Flows for the Year Ended October 31, 2008
  
As Originally Reported
    
To Be Restated
  
             
Net income
  
11,980,528
    
10,291,099
  
Accounts receivable
    
13,120,769
      
11,431,340
  

 
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.
 
 
Dated:  November 13, 2009
Renhuang Pharmaceuticals, Inc.,
  
 
a Nevada corporation
  
     
     
 
/s/ Shaoming Li 
  
 
By:     Shaoming Li 
  
 
Its:     Chief Executive Officer 
  
 
 
 
 
 
 CORRESP 2 filename2.htm Unassociated Document
 
RENHUANG PHARMACEUTICALS, INC.
 
No. 218, Taiping, Taiping District
 
Harbin, Heilongjiang Province,
 
P.R. China 150050
 

 
 November 13, 2009
 
Sasha Singh Parikh
Mail Stop 4720
Division of Corporation Finance
Securities and Exchange Commission
100 F Street. N.E.
Washington, D.C. 20549-4720


Re:          Renhuang Pharmaceuticals, Inc. (the “Company”)
Item 4.02 Form 8-K
Filed October 1, 2009
File No. 0-24512


Dear Ms. Parikh:
 
 
On behalf of Renhuang Pharmaceuticals, Inc. ( the “Company”), we hereby submit this response to the comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) as set forth in the Staff's letter, dated October 13, 2009, with respect to Form 8-K (the “Form 8-K”).  We set out each of the Staff’s comments in bold first, followed by each of our responses.
 
We understand and agree that:
 
·  
the Company is responsible for the adequacy and accuracy of the disclosure in the filing;
 
·  
Staff’s comments or changes to disclosure in response to Staff’s comments do not foreclose the Commission from taking any action with respect to the filing; and
 
·  
the Company may not assert Staff’s comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.
 
 
 
 

1.  
Please disclose the circumstances that led to the discovery of the error described in your Form 8-K.
 
Response

We understated the sales rebate in 2008 by RMB 11,904,896 (approx. US$ 1.7 million).  This amount was an audit adjustment in 2007, recorded to reflect 2007 sales rebate on an accrual basis.  As we booked the sales rebate using the  cash basis, our prior auditor proposed an adjusting entry to record unaccrued sales rebate. In 2008, our accountant followed the same logic to adjust the sales rebate.  Firstly, we reversed the 2007 rebate payable of RMB 11,904,896 as it was paid in 2008 already. Secondly, we recorded the 2008 unaccrued sales rebate of RMB 14,670,000 (i.e. rebate incurred RMB 57,993,198 – rebate booked in expenses RMB 43,323,178 = RMB 14,670,000). However, when we calculated the understated sales rebate for 2008, we disregarded the RMB 11,904,896 that was included in cash payments of RMB 43,323,178. Therefore, the sales rebate expenses account was understated by RMB 11,904,896 (approx. US$ 1.7 million).
 
2.  
Tell us in detail the steps you have taken (or plan to take) and procedures you implemented (or plan to implement) to correct the error.
 
Response
 
In response to Commission’s Comment, we have taken or will take the following remedial steps:
 
After we found the error, we reviewed all entries related to sales rebate and amended the financial statements by increasing sales rebate and decreasing sales payable by RMB 11,904,896 and also proposed to file an amendment on the 2008 Form 10-K on or about November 20, 2009.
 
3.  
Please explain to us why the interim financial statements for the interim periods ended January 31, 2008, April 30, 2008, July 31, 2008 do not need to be restated.
 
Response
 
In response to Commission’s Comment, we state that we have not filed the January 31, April 30, and July 31, 2008 Form 10-Q’s. We are planning to file them as soon as practicable.
 
 
 
 
 
4.  
To the extent that you make changes to the Form 8-K to comply with our comments, please obtain and file an updated Exhibit 16 letter from the former accountant stating whether the accountant agrees with the statements made in your revised Form 8-K.
 
Response
 
In response to Commission’s comment, we state that the errors made do not affect financial statements for the year ended October 31, 2007 and therefore, the letter from former accountant is not necessary.
 
5.  
When you amend your periodic reports to file your restated financial statements, describe the effect of the restatement on the officers’ conclusions regarding the effectiveness of the company’s disclosure controls and procedures. See Item 307 of Regulation S-K. If the officers’ conclude that the disclosure controls and procedures were effective, despite the restatement, describe the basis for the officers’ conclusions.
 
Response
 
In response to Commission’s comment, we state that the errors were caused by the oversight of our temporary accounting staff and accounting manager, which also may be regarded as a deficiency in our internal control. We already described such deficiency in the Form 10-K for the year ended October 31, 2008; therefore, no revision to the officers’ conclusions regarding the effectiveness of the Company’s disclosure controls and procedures is necessary.
 
6.  
It appears an Item 4.02 8-K was not filed within 4 business days of the event that triggered the filing obligation. Please note that this delinquency may impact your eligibility requirements for filing on Form S-3.
 
Response
 
We respectfully took note of this comment.
 
****
 
If you have any further questions or comments, please do not hesitate to contact me or our attorney, Jiannan Zhang, Ph.D., Cadwalader, Wickersham & Taft LLP 2301 China Central Place, Tower 2 No. 79 Jianguo Road, Beijing 100025, China. +86 (10) 6599-7270 (Direct Phone) +86 (10) 6599-7300 (Main Fax), Jiannan.zhang@cwt.com.
 
Sincerely,
 
/s/ Li Shaoming
 
Mr. Li Shaoming
Chief Executive Officer
 
 
 
 
 
 
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