SEC Form 4
FORM 4 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940
OMB APPROVAL
OMB Number: 3235-0287
Estimated average burden
hours per response: 0.5
  
Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
1. Name and Address of Reporting Person*
Delight Reward Ltd

(Last) (First) (Middle)
UNIT 06, 21/F BEAUTIFUL GROUP TOWER

(Street)
77 CONNAUGHT ROAD CENTRAL, K3

(City) (State) (Zip)
2. Issuer Name and Ticker or Trading Symbol
Keyuan Petrochemicals, Inc. [ KEYP ]
5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
Director X 10% Owner
Officer (give title below) Other (specify below)
3. Date of Earliest Transaction (Month/Day/Year)
07/15/2016
4. If Amendment, Date of Original Filed (Month/Day/Year)
6. Individual or Joint/Group Filing (Check Applicable Line)
X Form filed by One Reporting Person
Form filed by More than One Reporting Person
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V Amount (A) or (D) Price
Common Stock, par value $0.001 per share(5) 08/11/2016 C 5,493,001 A $3.64 53,051,001 D
Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 6. Date Exercisable and Expiration Date (Month/Day/Year) 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Series B Preferred Stock(1)(2)(3)(4) $3.75 07/15/2016 S 5,333,340 09/28/2010 09/28/2014 Common Stock, par value $0.001 per share 5,493,001 $0.326 5,333,340 D
Series B Preferred Stock(5) $3.64 08/11/2016 C 5,333,340 09/28/2010 09/28/2014 Common Stock, par value $0.001 per share 5,493,001 $0.005 0 D
Explanation of Responses:
1. On July 11, 2016, Keyuan Petrochemicals, Inc. (the "Company"), Delight Reward Limited (the "Reporting Person"), Chunfeng Tao and other affiliates of the Company entered into a share purchase and settlement agreement (the "Settlement Agreement") with Dragon State International Limited ("Dragon State") among others, pursuant to which Dragon State agreed to transfer the securities of the Company it owned to the Reporting Person and waive all claims and liabilities that Dragon State or its affiliated companies or individuals had brought or would bring against the Company, the Reporting Person and certain affiliates of the Company for an aggregate consideration of RMB 18 million or equivalent U.S. dollars. The Settlement Agreement provided that the purchase price for the transfer of the securities pursuant to the Settlement Agreement was RMB 12 million.
2. Dragon State had purchased from the Company in September 2010 for an aggregate price of $20 million, 5,333,334 shares of Series B preferred stock, par value $0.001 per share (the "Series B Shares"), convertible to a certain number of shares of Common Stock (the Common Stock that are convertible from the Series B Shares, the "Convertible Shares"), together with 800,001 series C warrants to purchase 800,001 shares of the Company's Common Stock at a price of $4.50 per share (subject to adjustments) and 800,001 series D warrants to purchase 800,001 shares of the Company's Common Stock at a price of $5.25 per share (subject to adjustments, together, the "Warrants") in a private placement in reliance upon the exemption from securities registration afforded by Regulation S as promulgated under the Securities Act of 1933, as amended.
3. Under the original terms of the Series B Shares, the Series B Shares would automatically expire and convert into shares of Common Stock on the third anniversary of the issuance subject to satisfaction of certain requirements. On September 24, 2013, Dragon State and the Company amended the terms of the Series B Shares to extend the expiration date from September 28, 2013 to September 28, 2014.
4. On October 28, 2014, Dragon State filed a complaint against, among others, the Company and Mr. Chunfeng Tao, seeking rescission of the securities purchase agreement dated September 28, 2010, and the return of $20 million, and in the alternative, seeking monetary damages to be determined at a trial but not less than $20 million (the "Complaint"). In connection with the Complaint, a consent order was issued by the District Court for the Southern District of New York whereby the Company and Mr. Chunfeng Tao agreed that the expiration date of the Series B Shares should be tolled pending the resolution of the Complaint. On July 21, 2016, the Complaint was dismissed by the District Court for the Southern District of New York in connection with the execution of the Settlement Agreement. While there is uncertainty with respect to whether the requirements of automatic conversion of the Series B Shares were satisfied, the Series B Shares were electively converted on August 11, 2016.
5. In connection with the execution of the Settlement Agreement and the payment subsequently made by the Company to Dragon State thereunder, on August 4, 2016, the Reporting Person entered into a side agreement with the Company (the "Side Agreement"). Under the Side Agreement, the Reporting Person agreed not to claim, or attempt to claim for any reason and in any circumstance, that the Warrants are exercisable, and pay to the Company for each Convertible Share the highest sale price of the Company's Common Stock per share as reported on the OTC Pink Marketplace during a period commencing on the date of the Settlement Agreement, which was $0.005 per share of Common Stock, for an aggregate purchase price of $27,465.01. On August 8, 2016, these funds were taken from cash on hand. On August 11. 2016, the Series B Shares were electively converted into 5,493,001 shares of Common Stock.
/s/ Chunfeng Tao 08/11/2016
** Signature of Reporting Person Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.