History
A small software company became a Chinese supplements business through a 2006 reverse merger, expanded into ginseng and property deals, then lost its auditor and deregistered in 2008.
2006: From software to supplements
The company began as PaperClip Software, a software business. On November 9, 2006 it announced it had acquired American Sunrise International (ASI) in a share exchange. ASI's China subsidiary, Dongsheng, makes nutritional supplements and personal care products. The software business was not to be continued, and its assets and liabilities were to go into a subsidiary whose shares would be paid as a dividend to holders of record on November 6, 2006.
The price was $280,000 in cash plus new common and Series B preferred shares that would equal 98.7% of the common stock. Before closing there were 8,196,523 common shares outstanding, so former PaperClip holders were left with just 1.3%. No shareholder vote was needed. The old officers, William Weiss, Michael Suleski and D. Michael Bridges, resigned, and Aidong Yu became Chairman, CEO and CFO, joined by Huizhu Xie and Dekui Wang.
A November 17 amendment cut the common shares issued to ASI holders to 18,153,934 (from 21,803,477), alongside 1,762,472 Series B preferred shares. It stated 30,000,000 common shares after closing, though the text was left unchanged and the figure was never reconciled. It also added restructuring agreements: Dongsheng's former managers would run the business and receive its net profits, and majority holder Huakang Zhou assigned his voting rights and pledged his shares. The head office moved to Jilin, China.
2008: Ginseng, a related-party deal and the exit
The record is quiet for 2007 beyond late-filing notices. In February 2008 the company signed a letter of intent with Zhang Qiang to acquire land use rights to 3,133 acres in Jiaohe, Jilin until February 7, 2034, plus about 18.8 million ginseng plants, for $8,965,900. It had paid $7,328,708, with $1,637,192 due by March 31, 2008. This was a new line of business; the company described it as a step toward making its own raw materials. Later filings did not confirm closing.
On July 7, 2008 it agreed to buy a factory, land use rights and five production lines for about US$6.23 million in cash from a company owned 60% by Aidong Yu and 40% by Huizhu Xie. The filing said an independent valuation was received and the deal was unanimously approved. Payment was due 60% by July 31 and 40% by December 31, 2008, with legal title passing only after five years.
On August 15, 2008 auditor Bagell, Josephs, Levine & Company resigned, reporting no disagreements and no adverse opinions; no replacement had been named. On September 26, 2008 the company deregistered its securities, ending its obligation to file reports with the SEC.
Written from the 7 story beats below (2006 to 26 Sept 2008), which come from the company's own announcements and filings.