- Amended Statement of Beneficial Ownership (SC 13D/A)
September 01 2009 - 11:28AM
Edgar (US Regulatory)
UNITED
STATES
|
SECURITIES
AND EXCHANGE
COMMISSION
|
Washington,
D.C. 20549
|
|
SCHEDULE
13D
|
Under
the Securities Exchange Act of 1934
(Amendment
No. 1)
Kid
Castle
Educational
Corporation
(Name of
Issuer)
Common
Stock $0.00 Par Value
(Title
of Class of Securities)
49375K 10 9
(CUSIP
Number)
Carter
Mackley
K&L
Gates Ellis LLP
925
Fourth Avenue, Suite 2900
Seattle,
Washington 98104
(206)
623-7580
(Name,
Address and Telephone Number of Person
Authorized
to Receive Notices and Communications)
June
17, 2009
(Date
of Event which Requires Filing of this Statement)
If the
filing person has previously filed a statement on Schedule 13G to report the
acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box.
o
Note
: Schedules filed in paper
format shall include a signed original and five copies of the schedule,
including all exhibits. See §240.13d-7 for other parties to whom copies are to
be sent.
*
The
remainder of this cover page shall be filled out for a reporting person’s
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed to
be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934
(“Act”) or otherwise subject to the liabilities of that section of the Act but
shall be subject to all other provisions of the Act (however, see the
Notes).
CUSIP
No.
|
|
1.
|
Names
of Reporting Persons. I.R.S. Identification Nos. of above persons
(entities only)
Suang-Yi
Pai
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|
2.
|
Check
the Appropriate Box if a Member of a Group (See
Instructions)
|
|
|
(a)
|
o
|
|
|
(b)
|
x
|
|
3.
|
SEC
Use Only
|
|
4.
|
Source
of Funds (See Instructions)
PF
|
|
5.
|
Check
if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or
2(e)
o
|
|
6.
|
Citizenship
or Place of Organization
Republic
of China
|
Number
of
Shares
Beneficially
Owned
by
Each
Reporting
Person
With
|
7.
|
Sole
Voting Power
2,267,337
|
8.
|
Shared
Voting Power
3,841,377(1)
|
9.
|
Sole
Dispositive Power
2,267,337
|
10.
|
Shared
Dispositive Power
3,841,377(1)
|
|
11.
|
Aggregate
Amount Beneficially Owned by Each Reporting Person
3,841,377(1)
|
|
12.
|
Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
o
|
|
13.
|
Percent
of Class Represented by Amount in Row (11)
12.8
percent
|
|
14.
|
Type
of Reporting Person (See Instructions)
IN
|
(1)
Mr. Suang-Yi Pai owns 2,267,337 shares of the Issuer’s Common Stock, his spouse,
Su-Mei Pai Lu,
owns
1,172,040 shares, and each of his three children , Chia-Yun Pai, Chi-Hung Pai,
and Ching-Hung Pai, own 134,000 shares.
CUSIP
No.
|
|
1.
|
Names
of Reporting Persons. I.R.S. Identification Nos. of above persons
(entities only)
Min-Tan
Yang
|
|
2.
|
Check
the Appropriate Box if a Member of a Group (See
Instructions)
|
|
|
(a)
|
o
|
|
|
(b)
|
x
|
|
3.
|
SEC
Use Only
|
|
4.
|
Source
of Funds (See Instructions)
PF
|
|
5.
|
Check
if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or
2(e)
o
|
|
6.
|
Citizenship
or Place of Organization
Republic
of China
|
Number
of
Shares
Beneficially
Owned
by
Each
Reporting
Person
With
|
7.
|
Sole
Voting Power
14,675,538
|
8.
|
Shared
Voting Power
16,255,538(1)
|
9.
|
Sole
Dispositive Power
14,675,538
|
10.
|
Shared
Dispositive Power
16,255,538
(1)
|
|
11.
|
Aggregate
Amount Beneficially Owned by Each Reporting Person
16,255,538(1)
|
|
12.
|
Check
if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions)
o
|
|
13.
|
Percent
of Class Represented by Amount in Row (11)
54.2
percent
|
|
14.
|
Type
of Reporting Person (See Instructions)
IN
|
(1)
Mr. Min-Tan Yang owns 14,675,538 shares of Issuer’s Common Stock and his spouse,
Ms. Yu Pin Shen, owns 1,580,000 shares.
Item
1.
|
Security
and Issuer
|
This
statement relates to the shares of common stock, no par value (the “Common
Shares”), of Kid Castle Educational Corporation (the “Issuer”). The
principal executive offices of the Issuer are located at
8
th
Floor, No. 98 Min Chuan Road, Hsien Tien, Taipei, Taiwan
R.O.C.
|
Item
2.
|
Identity
and Background
|
(a)
This Statement is being filed jointly by Suang-Yi Pai (“Mr. Pai”) and
Min-Tan Yang (“Mr. Yang”). The foregoing persons are hereinafter
sometimes referred to collectively as the “Reporting
Persons.” Neither the present filing nor anything contained
herein shall be construed as an admission that Mr. Pai or Mr. Yang
constitute a “person” for any purpose other than Section 13(d) of the
Securities Exchange Act of 1934.
(b)-(c) Mr.
Pai, a natural person, is the Chairman of the Board of the Issuer.
The address of his principal office and principal place of business is
8
th
Floor, No. 98 Min Chuan Road, Hsien Tien, Taipei, Taiwan
R.O.C.
Mr.
Yang, a natural person, is the Chief Executive Officer of the
Issuer. The address of his principal office and principal place of
business is 8
th
Floor, No. 98 Min Chuan Road, Hsien Tien, Taipei, Taiwan
R.O.C.
(d) During
the last five years, neither of the Reporting Person have been convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e)
During the last five years, neither Reporting Person has been party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such
laws.
(f)
Both Reporting Persons are citizens of the Republic of
China.
|
Item
3.
|
Source and Amount of
Funds or Other Consideration
|
In the
fourth quarter of 2005, Mr. Yang invested approximately $1,050,000 in the
Issuer, and third parties procured by Mr. Pai invested approximately $750,000 in
the Issuer. The third parties later assigned their investment to Mr. Pai. The
original understanding was that the investment would be for the Issuer’s common
stock, with the price of the stock to be based on a mutually agreed value of the
Issuer at the end of 2005, after the Reporting Persons had an opportunity to
fully investigate the company’s financial status. Due to delays in that process,
the Issuer and the Reporting Persons agreed to treat their investments as
short-term loans, due in three months, with a per annum interest rate of 7%. The
maturity dates of the loans were extended in February, May and August 2006. As
of December 28, 2006, the outstanding principle on the loans was $407,725 for
Mr. Pai and $840,789 for Mr. Yang, and $1,248,514 combined.
Effective
December 28, 2006, the Issuer entered into a loan settlement and conversion
agreement with the Reporting Persons. Pursuant to the loan settlement and
conversion agreement, the Issuer and the Reporting Persons agreed to convert a
portion of the loans to stock at a conversion price of $0.15 per share and to
issue promissory notes for the remaining amount. Accordingly, Mr. Pai received
2,000,297 shares and Mr. Yang received 4,000,000 shares.
The loan
settlement and conversion agreement and issuance of stock and residual
promissory notes to Messrs. Pai and Yang was approved by a committee of the
board of directors comprised of directors who were not interested in the
transaction and who constitute a majority of the board. In approving the
transaction, the independent committee relied in part on a valuation of the
company prepared by an outside financial advisor.
On July
25, 2008, Mr. Yang purchased 10,000 shares of the Issuer’s common stock for cash
for $0.25 per share from an individual shareholder in a private transaction. On
February 5, 2009, Mr. Pai sold 1,000,000 shares of the Issuer’s common stock to
Mr. Yang for cash for $0.15 per share. On March 19, 2009, Ms. Yu Pin Shen, who
is Mr. Yang’s spouse, purchased 1,080,000 shares of the Issuer’s common stock
for cash for $0.15 per share from an individual shareholder in a private
transaction.
On
June 17, 2009, Mr. Yang purchased 5,000,000 shares of the Issuer’s common
stock for $0.18 per share for an aggregate purchase price of $900,000. The
purpose of the stock purchase was to finance the Issuer’s plan to take the
Issuer private. The stock purchase and the privatization plan are
described more fully in the Issuer’s Report on Form 8-K filed with the
Commission on June 18, 2009. Mr. Yang’s stock purchase was approved by a
committee of the board of directors comprised of directors who had no
financial interest in the transaction. In approving the stock purchase,
the independent committee relied in part on a valuation of the fair value
of the Issuer’s stock prepared by an outside financial
advisor.
|
Item
4.
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Purpose
of Transaction
|
The
Reporting Persons originally made an investment in Issuer with intent to
gain control of the Issuer’s operations. The Reporting
Persons will continue to evaluate their ownership and voting position in
the Issuer and may consider the following future courses of action, among
others: (i) continuing to hold the Common Shares for
investment; (ii) disposing of all or a portion of the Common Shares in the
open market, if such open market exists, or in privately-negotiated
transactions; (iii) acquiring additional Common Shares in the open market,
if such market exists, or in privately-negotiated transactions; or (iv)
entering into short sales or other hedging transactions with respect to
the Common Shares, if a market for the Common Shares exists. The
Reporting Persons have not as yet determined which, if any, of the courses
of action specified in this paragraph they may ultimately take. The
Reporting Persons’ future actions with regard to this investment are
dependent on their evaluation of a variety of circumstances affecting the
Issuer in the future, including the market price of the Common Shares and
the Issuer’s prospects.
Except
as set forth in this Schedule 13D, the Reporting Persons do not have any
present intent or proposals that relate to or would result in: (a) the
acquisition by any person of additional securities of the Issuer or the
disposition of securities of the Issuer; (b) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving
the Issuer or any of its subsidiaries; (c) a sale or transfer of a
material amount of assets of the Issuer or any of its subsidiaries; (d)
any change in the present board of directors or management of the Issuer,
including any plans or proposals to change the number or term of directors
or to fill any vacancies on the board; (e) any material change in the
present capitalization or dividend policy of the Issuer; (f) any other
material change in the Issuer’s business or corporate structure; (g)
changes in the Issuer’s charter, bylaws or instruments corresponding
thereto or other actions which may impede the acquisition of control of
the Issuer by any person; or (h) any action similar to those enumerated
above.
At
the current time, the Reporting Persons as shareholders of the Issuer have
approved a privatization transaction the purpose of which is to decrease
the number of the Issuer’s registered shareholders to below 300 so that
the Issuer may deregister from its reporting obligations under the
Exchange Act. In conjunction with the privatization, the
Issuer’s common stock will no longer be quoted on the OTCBB. On
June 17, 2009, Mr. Yang purchased 5,000,000 shares of the Issuer’s common
stock for $0.18 per share for an aggregate purchase price of $900,000
cash. The purpose of the stock purchase was to finance the
Issuer’s plan to take the company private. Mr. Yang’s stock
purchase was approved by a committee of the board of directors comprised
of directors who had no financial interest in the transaction. In
approving the stock purchase, the independent committee relied in part on
a valuation of the fair value of the Issuer’s stock prepared by an outside
financial advisor.
Reporting
Persons reserve the right to determine in the future whether to change the
purpose or purposes described above or whether to adopt plans or proposals
of the type specified above.
|
Item
5.
|
Interest
in Securities of the
Issuer
|
(a)
See items 11 and 13 of the cover pages to this Schedule 13D for the
aggregate number of shares and percentage of Common Shares beneficially
owned by Messrs. Pai and Yang.
(b)
See items 7 through 10 of the cover pages to this Schedule 13D for the
number of Common Shares beneficially owned the Reporting Persons as to
which there is sole power to vote or to direct the vote, shared power to
vote or to direct the vote and sole or shared power to dispose or to
direct the
disposition.
|
(c)
See Item 3 for a description of the issuance of shares to the Reporting
Persons.
(d)
Except as set forth in this Schedule 13D, to the knowledge of the
Reporting Persons, no person has the right to receive or the power to
direct the receipt of dividends from, or the proceeds from the sale of,
securities covered by this Schedule 13D.
(e)
Not applicable.
|
Item
6.
|
Contracts,
Arrangements, Understandings or Relationships with Respect to Securities
of the Issuer
|
Mr.
Pai and Mr. Yang do not have an explicit understanding or agreement as to
the voting, ownership, or disposition of the Issuer’s common
stock. However, Mr. Pai and Mr. Yang have, and may again in the
future, from time to time, consulted with one another when voting their
shares or otherwise exercising their share ownership. Mr. Pai
and Mr. Yang have an agreement to Jointly File Schedule 13D reports, which
agreement was filed as an exhibit to the original Schedule 13D filed by
Mr. Pai and Mr. Yang on January 31, 2007.
Mr.
Pai’s wife, Su-Mei Pai Lu, owns 1,172,040 shares of the Issuer’s Common
Stock and Mr. Pai’s children, Chia-Yun Pai, Chi-Hung Pai, and Ching-Hung
Pai, own a combined 402,000 shares of Issuer’s Common Stock.
Mr.
Yang’s wife owns 1,580,000 shares of the Issuer’s Common
Stock.
Together,
Mr. Pai, Mr. Yang, and their respective family members beneficially own
20,096,915 shares, or 67.0 percent, of the Issuer’s Common
Stock.
|
Item
7.
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Material
to Be Filed as Exhibits
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Exhibit
|
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Description
|
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99.1
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Agreement
Between Mr. Suang-Yi Pai and Mr. Min-Tan Yang to Jointly File Schedule 13D
(incorporated by reference to Schedule 13D filed by the Reporting Persons
on January 31, 2007).
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SIGNATURE
After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.
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August
26, 2009
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/s/
Min-Tan Yang
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Min-Tan
Yang
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August
26, 2009
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/s/
Suang-Yi Pai
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Suang-Yi
Pai
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