Attached files
| file | filename |
|---|---|
| 10-Q - Fushi Copperweld, Inc. | v165284_10q.htm |
| EX-31.1 - Fushi Copperweld, Inc. | v165284_ex31-1.htm |
| EX-31.2 - Fushi Copperweld, Inc. | v165284_ex31-2.htm |
| EX-32.1 - Fushi Copperweld, Inc. | v165284_ex32-1.htm |
Condensed
Parent-Only Financial Statements of Fushi Copperweld, Inc. under Schedule I of
Article 5-04 of Regulation S-X
Restricted Net
Assets
Schedule
I of Article 5-04 of Regulation S-X requires the condensed financial information
of registrant shall be filed when the restricted net assets of consolidated
subsidiaries exceed 25 percent of consolidated net assets as of the end of the
most recently completed fiscal year. For purposes of the above test, restricted
net assets of consolidated subsidiaries shall mean that amount of the
registrant’s proportionate share of net assets of consolidated subsidiaries
(after intercompany eliminations) which as of the end of the most recent fiscal
year may not be transferred to the parent company by subsidiaries in the form of
loans, advances or cash dividends without the consent of a third party (i.e.,
lender, regulatory agency, foreign government, etc.).
The
condensed parent company financial statements have been prepared in accordance
with Rule 12-04, Schedule I of Regulation S-X as the restricted net assets of
the subsidiaries of Fushi Copperweld, Inc. exceed 25% of the consolidated net
assets of Fushi Copperweld, Inc. The ability of our Chinese operating affiliates
to pay dividends may be restricted due to the foreign exchange control policies
and availability of cash balances of the Chinese operating subsidiaries. Because
a significant portion of our operations and revenues are conducted and generated
in China, a significant portion of our revenues being earned and currency
received are denominated in Renminbi (RMB). RMB is subject to the exchange
control regulation in China, and, as a result, we may be unable to distribute
any dividends outside of China due to PRC exchange control regulations that
restrict our ability to convert RMB into US Dollars.
The
condensed parent company financial statements have been prepared using the same
accounting principles and policies described in the notes to the consolidated
financial statements. Refer to the consolidated financial statements and notes
presented in this 10Q filing for additional information and disclosures with
respect to these financial statements.
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FUSHI
COPPERWELD, INC.
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CONDENSED
PARENT COMPANY BALANCE SHEETS
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AS
OF SEPTEMBER 30, 2009 AND DECEMBER 31, 2008
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ASSETS
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September
30,
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December
31,
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|||||||
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2009
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2008
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Unaudited
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CURRENT
ASSETS:
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Cash
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$ | 5,522 | $ | 30,414 | ||||
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Restricted
cash
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- | 1,000,000 | ||||||
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Deposit
in derivative hedge
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1,000,000 | 1,000,000 | ||||||
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Total
current assets
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1,005,522 | 2,030,414 | ||||||
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OTHER
ASSETS:
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Investments
in subsidiaries
|
278,842,423 | 252,761,912 | ||||||
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Deferred
loan expense, net
|
2,400,851 | 3,188,344 | ||||||
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Deferred
tax assets
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11,057,111 | 7,804,027 | ||||||
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Total
other assets
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292,300,385 | 263,754,283 | ||||||
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Total
assets
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$ | 293,305,907 | $ | 265,784,697 | ||||
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LIABILITIES
AND SHAREHOLDERS' EQUITY
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CURRENT
LIABILITIES:
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Notes
payable, current
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$ | 10,000,000 | $ | 5,000,000 | ||||
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Other
payables and accrued liabilities
|
7,237,859 | 3,613,789 | ||||||
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Extinguished
convertible note liabilities
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6,060,000 | - | ||||||
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Cross
currency hedge payable
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1,071,557 | 104,324 | ||||||
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Total
current liabilities
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24,369,416 | 8,718,113 | ||||||
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LONG-TERM LIABILITIES:
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Intercompany
payables
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15,842,779 | 2,512,023 | ||||||
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Notes
payable, non-current
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25,000,000 | 40,000,000 | ||||||
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Fair
value of derivative instrument
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7,652,664 | 4,377,076 | ||||||
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Total
long-term liabilities
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48,495,443 | 46,889,099 | ||||||
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Total
liabilities
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72,864,859 | 55,607,212 | ||||||
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COMMITMENTS
AND CONTINGENCIES
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7,197,794 | |||||||
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SHAREHOLDERS'
EQUITY:
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Preferred
stock,$0.001 par value, 5,000,000 shares authorized, none
issued
or outstanding as of September 30, 2009 and December 31,
2008
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- | - | ||||||
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Common
stock,$0.006 par value, 100,000,000 shares
authorized,
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September
30, 2009: 30,543,716 shares issued and 28,343,716
outstanding
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December
31, 2008: 27,499,034 shares issued and 27,399,034
outstanding
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170,063 | 164,395 | ||||||
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Restricted
common stock in escrow
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13,200 | 600 | ||||||
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Additional
paid in capital
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105,197,671 | 91,172,889 | ||||||
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Common
stock subscription receivable
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(5,919,597 | ) | - | |||||
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Statutory
reserves
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14,979,861 | 12,316,147 | ||||||
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Retained
earnings
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88,450,843 | 78,613,158 | ||||||
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Accumulated
other comprehensive income
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17,549,007 | 20,712,502 | ||||||
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Total
shareholders' equity
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220,441,048 | 202,979,691 | ||||||
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Total
liabilities and shareholders' equity
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$ | 293,305,907 | $ | 265,784,697 | ||||
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FUSHI
COPPERWELD, INC.
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CONDENSED
PARENT COMPANY STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
(LOSS)
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FOR
THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2009 AND
2008
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(UNAUDITED)
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Three
months ended September 30,
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Nine
months ended September 30,
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2009
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2008
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2009
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2008
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OPERATING
EXPENSES
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General
and administrative expenses
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$ | 600,777 | $ | 765,766 | $ | 2,701,597 | $ | 3,429,862 | ||||||||
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Total
operating expenses
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600,777 | 765,766 | 2,701,597 | 3,429,862 | ||||||||||||
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OTHER
INCOME (EXPENSE)
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Interest
and other expense, net
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(1,055,023 | ) | (1,252,839 | ) | (3,859,033 | ) | (5,770,730 | ) | ||||||||
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(Loss)
gain on derivative instrument
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(1,199,438 | ) | (32,482 | ) | (1,581,812 | ) | 322,708 | |||||||||
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Gain
on convertible note extinguishment
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3,842,935 | 3,842,935 | ||||||||||||||
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Change
in fair value of derivative liabilities
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(2,058,352 | ) | - | (7,933,312 | ) | - | ||||||||||
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Total
other expense, net
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(469,878 | ) | (1,285,321 | ) | (9,531,222 | ) | (5,448,022 | ) | ||||||||
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EQUITY
INCOME EARNINGS OF SUBSIDIARIES
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9,377,210 | 10,991,647 | 22,838,284 | 31,480,891 | ||||||||||||
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INCOME
BEFORE INCOME TAXES
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8,306,555 | 8,940,560 | 10,605,465 | 22,603,007 | ||||||||||||
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BENEFIT
FOR INCOME TAXES
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(888,378 | ) | (106,390 | ) | (3,253,085 | ) | (1,295,285 | ) | ||||||||
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NET
INCOME
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9,194,933 | 9,046,950 | 13,858,550 | 23,898,292 | ||||||||||||
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OTHER
COMPREHENSIVE INCOME
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Unrealized
gain on marketable securities
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- | - | - | 22,301 | ||||||||||||
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Foreign
currency translation adjustment
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72,136 | 1,899,163 | 112,093 | 14,062,515 | ||||||||||||
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Change
in fair value of derivative instrument
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237,768 | 3,940,908 | (3,275,588 | ) | 3,209,403 | |||||||||||
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COMPREHENSIVE
INCOME
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$ | 9,504,837 | $ | 14,887,021 | $ | 10,695,055 | $ | 41,192,511 | ||||||||
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FUSHI
COPPERWELD, INC.
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CONDENSED
PARENT COMPANY STATEMENTS OF CASH FLOWS
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FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008
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(UNAUDITED)
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2009
|
2008
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CASH
FLOWS FROM OPERATING ACTIVITIES:
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Net
loss
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$ | 13,858,550 | $ | 23,898,292 | ||||
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Adjustments
to reconcile net loss
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used
in operating activities:
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Equity
in earnings of subsidiaries
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(22,838,284 | ) | (31,480,891 | ) | ||||
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Deferred
taxes
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(3,253,085 | ) | (1,295,286 | ) | ||||
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Amortization
of loan commission
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787,492 | 2,495,899 | ||||||
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Interest
penalty
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- | 710,544 | ||||||
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Amortization
of stock compensation expense
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1,108,254 | 1,437,557 | ||||||
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Loss
(gain) on derivative instrument
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1,581,812 | (322,708 | ) | |||||
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Gain
on convertible note extinguishment
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(3,842,935 | ) | - | |||||
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Change
in fair value of derivative liabilities
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7,933,312 | - | ||||||
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Investment
loss on marketable securities
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- | 16,158 | ||||||
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Change
in operating assets and liabilities:
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Net
intercompany payables
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13,330,755 | 4,086,624 | ||||||
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Other
payables and accrued liabilities
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(2,866,051 | ) | (2,312,830 | ) | ||||
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Net
cash provided by (used in) operating activities
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5,799,820 | (2,766,641 | ) | |||||
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CASH
FLOWS FROM INVESTING ACTIVITIES:
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Investment
in subsidiaries
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(3,130,132 | ) | (849,980 | ) | ||||
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Proceeds
from sale of marketable securities
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- | 2,983,842 | ||||||
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Deposit
in derivative hedge
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- | (1,000,000 | ) | |||||
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Payments
on derivative instrument
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(614,580 | ) | - | |||||
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Proceeds
from derivative instrument
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- | 973,556 | ||||||
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Net
cash (used in) provided by investing activities
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(3,744,712 | ) | 2,107,418 | |||||
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CASH
FLOWS FROM FINANCING ACTIVITIES:
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Release
of restricted cash
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1,000,000 | - | ||||||
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Payment
of high yield notes payable
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(5,000,000 | ) | - | |||||
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Proceeds
from exercise of stock warrants
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- | 139,394 | ||||||
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Proceeds
on issuance of common stock and warrants
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1,920,000 | - | ||||||
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Net
cash (used in) provided by financing activities
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(2,080,000 | ) | 139,394 | |||||
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DECREASE
IN CASH
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(24,892 | ) | (519,829 | ) | ||||
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CASH,
beginning of period
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30,414 | 591,087 | ||||||
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CASH,
end of period
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$ | 5,522 | $ | 71,258 | ||||
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SUPPLEMENTAL
CASH FLOWS DISCLOSURE:
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Interest
paid
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$ | 3,375,092 | $ | 4,233,231 | ||||