Attached files
| file | filename |
|---|---|
| EX-31.1 - GENERAL STEEL HOLDINGS INC | v201561_ex31-1.htm |
| EX-32.1 - GENERAL STEEL HOLDINGS INC | v201561_ex32-1.htm |
| EX-32.2 - GENERAL STEEL HOLDINGS INC | v201561_ex32-2.htm |
| EX-31.2 - GENERAL STEEL HOLDINGS INC | v201561_ex31-2.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
|
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the quarterly period ended September 30,
2010
|
or
|
¨
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the transition period from __________ to
__________
|
Commission
File Number 001-33717
General
Steel Holdings, Inc.
(Exact
name of registrant as specified in its charter)
|
Nevada
(State
or other Jurisdiction of
Incorporation
or Organization)
|
41-2079252
(I.R.S.
Employer Identification No.)
|
Room
2315, Kuntai International Mansion Building,
Yi
No. 12, Chaoyangmenwai Ave.
Chaoyang
District, Beijing, China 100020
(Address
of Principal Executive Office, Including Zip Code)
+86(10)58797346
(Registrant's
Telephone Number, Including Area Code)
Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No ¨
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405
of this chapter) during the preceding 12 months (or for shorter period that
the registrant was required to submit and post such files). Yes
o No
o
Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer or a smaller reporting company. See definition of “large accelerated
filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act.
|
Large
accelerated filer ¨
|
Accelerated
filer x
|
Non-accelerated
filer ¨
(Do
not check if a smaller reporting company)
|
Smaller
reporting company ¨
|
Indicate by check mark whether the
registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes ¨ No x
As of November 8, 2010, 54,678,083
shares of common stock, par value $0.001 per share, were issued and
outstanding.
Table
of Contents
|
Page
|
|||
|
Part
I. FINANCIAL INFORMATION
|
|||
|
Item
1.
|
Financial
Statements.
|
3
|
|
|
Consolidated
Balance Sheets as of September 30, 2010 (Unaudited) and December 31,
2009.
|
3
|
||
|
|
|||
|
Consolidated
Statements of Operation and Other Comprehensive Income (Loss) for the
Three Months and Nine Months Ended September 30, 2010 and 2009
(Unaudited).
|
4
|
||
|
|
|||
|
Consolidated
Statements of Changes In Equity (Unaudited).
|
5
|
||
|
|
|||
|
Consolidated
Statements of Cash Flows for the Nine Months Ended September 30, 2010 and
2009 (Unaudited).
|
6
|
||
|
Notes to
Consolidate Financial Statements (Unaudited).
|
7
|
||
|
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
|
37
|
|
|
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk.
|
56
|
|
|
Item
4.
|
Controls
and Procedures.
|
56
|
|
|
Part
II. OTHER INFORMATION
|
|||
|
Item
1.
|
Legal
Proceedings.
|
56
|
|
|
Item
6.
|
Exhibits.
|
57
|
|
|
Signatures
|
58
|
||
2
PART
I – FINANCIAL INFORMATION
ITEM
1. FINANCIAL STATEMENTS.
|
GENERAL
STEEL HOLDINGS INC. AND SUBSIDIARIES
|
||||||||
|
CONSOLIDATED
BALANCE SHEETS
|
||||||||
|
AS
OF SEPTEMBER 30, 2010 AND DECEMBER 31, 2009
|
||||||||
|
(In
thousands, except per share data)
|
||||||||
|
ASSETS
|
||||||||
|
September
30,
|
December
31,
|
|||||||
|
2010
|
2009
|
|||||||
|
(Unaudited)
|
||||||||
|
CURRENT
ASSETS:
|
||||||||
|
Cash
|
$ | 41,778 | $ | 82,118 | ||||
|
Restricted
cash
|
186,523 | 192,041 | ||||||
|
Notes
receivable
|
67,132 | 29,185 | ||||||
|
Restricted
notes receivable
|
12,752 | - | ||||||
|
Accounts
receivable, net
|
21,215 | 8,525 | ||||||
|
Other
receivables, net
|
14,881 | 7,729 | ||||||
|
Other
receivables - related parties
|
54,983 | 32,670 | ||||||
|
Inventories
|
250,758 | 208,087 | ||||||
|
Advances
on inventory purchase
|
42,139 | 28,407 | ||||||
|
Advances
on inventory purchase - related parties
|
48,007 | 2,995 | ||||||
|
Prepaid
expense
|
4,358 | 691 | ||||||
|
Prepaid
value added tax
|
17,500 | 19,488 | ||||||
|
Deferred
tax assets
|
8,900 | 3,341 | ||||||
|
Total
current assets
|
770,926 | 615,277 | ||||||
|
PLANT
AND EQUIPMENT, net
|
584,948 | 555,111 | ||||||
|
OTHER
ASSETS:
|
||||||||
|
Advances
on equipment purchase
|
20,435 | 8,419 | ||||||
|
Investment
in unconsolidated subsidiaries
|
13,712 | 20,022 | ||||||
|
Long-term
deferred expense
|
608 | 2,069 | ||||||
|
Intangible
assets, net of accumulated amortization
|
23,568 | 23,733 | ||||||
|
Note
issuance cost
|
- | 406 | ||||||
|
Plant
and equipment to be disposed
|
2,443 | 3,026 | ||||||
|
Total
other assets
|
60,766 | 57,675 | ||||||
|
TOTAL
ASSETS
|
$ | 1,416,640 | $ | 1,228,063 | ||||
|
LIABILITIES AND EQUITY
|
||||||||
|
CURRENT
LIABILITIES:
|
||||||||
|
Short
term notes payable
|
$ | 302,113 | $ | 254,608 | ||||
|
Accounts
payable
|
174,012 | 158,126 | ||||||
|
Accounts
payable - related parties
|
65,756 | 48,151 | ||||||
|
Short
term loans - bank
|
178,122 | 148,968 | ||||||
|
Short
term loans - others
|
100,707 | 110,358 | ||||||
|
Short
term loans - related parties
|
92,814 | 11,751 | ||||||
|
Other
payables and accrued liabilities
|
13,922 | 16,222 | ||||||
|
Other
payable - related parties
|
22,615 | 3,706 | ||||||
|
Customer
deposit
|
190,691 | 208,765 | ||||||
|
Customer
deposit - related parties
|
47,809 | 3,791 | ||||||
|
Deposit
due to sales representatives
|
45,845 | 49,544 | ||||||
|
Taxes
payable
|
2,195 | 6,921 | ||||||
|
Distribution
payable to former shareholders
|
13,071 | 16,434 | ||||||
|
Total
current liabilities
|
1,249,672 | 1,037,345 | ||||||
|
CONVERTIBLE
NOTES PAYABLE, net of debt discount of $0 and $2,250
|
||||||||
|
as
of September 30, 2010 and December 31, 2009, respectively
|
- | 1,050 | ||||||
|
DERIVATIVE
LIABILITIES
|
7,049 | 23,340 | ||||||
|
Total
liabilities
|
1,256,721 | 1,061,735 | ||||||
| COMMITMENTS AND CONTIGENCIES | ||||||||
|
EQUITY:
|
||||||||
|
Preferred
stock, $0.001 par value, 50,000,000 shares authorized, 3,092,899
shares
|
||||||||
|
issued
and outstanding as of September 30, 2010 and December 31, 2009,
respectively
|
3 | 3 | ||||||
|
Common
Stock, $0.001 par value, 200,000,000 shares authorized,
54,678,083
|
||||||||
|
and
51,618,595 shares issued and outstanding as of September 30,
2010
|
||||||||
|
and
December 31, 2009, respectively
|
55 | 52 | ||||||
|
Paid-in-capital
|
104,510 | 95,588 | ||||||
|
Statutory
reserves
|
6,341 | 6,162 | ||||||
|
Accumulated
deficits
|
(26,307 | ) | (16,411 | ) | ||||
|
Accumulated
other comprehensive income
|
10,860 | 8,336 | ||||||
|
Total
shareholders' equity
|
95,462 | 93,730 | ||||||
|
NONCONTROLLING
INTERESTS
|
64,457 | 72,598 | ||||||
|
Total
equity
|
159,919 | 166,328 | ||||||
|
TOTAL
LIABILITIES AND EQUITY
|
$ | 1,416,640 | $ | 1,228,063 | ||||
The
accompanying notes are an integral part of these consolidated financial
statements.
3
|
GENERAL
STEEL HOLDINGS, INC. AND SUBSIDIARIES
|
||||||||||||||||
|
CONSOLIDATED
STATEMENTS OF OPERATION AND OTHER COMPREHENSIVE INCOME
(LOSS)
|
||||||||||||||||
|
(UNAUDITED)
|
||||||||||||||||
|
(In
thousands, except per share data)
|
||||||||||||||||
|
Three
months ended September 30,
|
Nine
months ended September 30,
|
|||||||||||||||
|
2010
|
2009
|
2010
|
2009
|
|||||||||||||
|
REVENUES
|
$ | 340,703 | $ | 361,652 | $ | 1,041,504 | $ | 875,374 | ||||||||
|
REVENUES
- RELATED PARTIES
|
119,574 | 123,100 | 373,475 | 341,119 | ||||||||||||
|
TOTAL
REVENUES
|
460,277 | 484,752 | 1,414,979 | 1,216,493 | ||||||||||||
|
COST
OF REVENUES
|
338,931 | 340,483 | 1,025,944 | 822,392 | ||||||||||||
|
COST
OF REVENUES - RELATED PARTIES
|
105,754 | 104,534 | 360,350 | 318,946 | ||||||||||||
|
TOTAL
COST OF REVENUES
|
444,685 | 445,017 | 1,386,294 | 1,141,338 | ||||||||||||
|
GROSS
PROFIT
|
15,592 | 39,735 | 28,685 | 75,155 | ||||||||||||
|
SELLING,
GENERAL AND ADMINISTRATIVE EXPENSES
|
9,562 | 10,487 | 35,380 | 29,219 | ||||||||||||
|
INCOME
(LOSS) FROM OPERATIONS
|
6,030 | 29,248 | (6,695 | ) | 45,936 | |||||||||||
|
OTHER
INCOME (EXPENSE)
|
||||||||||||||||
|
Interest
income
|
1,739 | 826 | 3,476 | 2,468 | ||||||||||||
|
Finance/interest
expense
|
(10,190 | ) | (4,174 | ) | (37,617 | ) | (18,422 | ) | ||||||||
|
Change
in fair value of derivative liabilities
|
(1,089 | ) | (616 | ) | 13,579 | (23,228 | ) | |||||||||
|
Gain
from debt extinguishment
|
2,932 | |||||||||||||||
|
Government
grant
|
1,381 | - | 1,381 | 3,433 | ||||||||||||
|
Income
from equity investments
|
839 | 963 | 5,595 | 3,661 | ||||||||||||
|
Other
non-operating income, net
|
(350 | ) | (2,985 | ) | 217 | (2,332 | ) | |||||||||
|
Total
other expense, net
|
(7,670 | ) | (5,986 | ) | (13,369 | ) | (31,488 | ) | ||||||||
|
(LOSS)
INCOME BEFORE PROVISION FOR INCOME TAXES
|
||||||||||||||||
|
AND
NONCONTROLLING INTEREST
|
(1,640 | ) | 23,262 | (20,064 | ) | 14,448 | ||||||||||
|
PROVISION
FOR INCOME TAXES
|
||||||||||||||||
|
Current
|
5,332 | 6,717 | 860 | 12,451 | ||||||||||||
|
Deferred
|
(5,224 | ) | (2,925 | ) | (5,559 | ) | (5,265 | ) | ||||||||
|
Total
provision (benefit) for income taxes
|
108 | 3,792 | (4,699 | ) | 7,186 | |||||||||||
|
NET
(LOSS) INCOME BEFORE NONCONTROLLING INTEREST
|
(1,748 | ) | 19,470 | (15,365 | ) | 7,262 | ||||||||||
|
Less:
Net income (Loss) attributable to noncontrolling interest
|
513 | 9,088 | (5,469 | ) | 21,421 | |||||||||||
|
NET
(LOSS) INCOME ATTRIBUTABLE TO CONTROLLING INTEREST
|
(2,261 | ) | 10,382 | (9,896 | ) | (14,159 | ) | |||||||||
|
OTHER
COMPREHENSIVE INCOME (LOSS)
|
||||||||||||||||
|
Foreign
currency translation adjustments
|
2,462 | (246 | ) | 2,524 | (174 | ) | ||||||||||
|
Comprehensive
income attributable to noncontrolling interest
|
1,075 | 1,440 | 1,239 | 334 | ||||||||||||
|
COMPREHENSIVE
INCOME (LOSS)
|
$ | 1,276 | $ | 11,576 | $ | (6,133 | ) | $ | (13,999 | ) | ||||||
|
WEIGHTED
AVERAGE NUMBER OF SHARES
|
||||||||||||||||
|
Basic
|
53,941,191 | 44,973,882 | 52,576,928 | 40,295,924 | ||||||||||||
|
Diluted
|
53,941,191 | 45,750,152 | 52,576,928 | 40,295,924 | ||||||||||||
|
(LOSS)
EARNINGS PER SHARE
|
||||||||||||||||
|
Basic
|
$ | (0.04 | ) | $ | 0.23 | $ | (0.19 | ) | $ | (0.35 | ) | |||||
|
Diluted
|
$ | (0.04 | ) | $ | 0.22 | $ | (0.19 | ) | $ | (0.35 | ) | |||||
The
accompanying notes are an integral part of these consolidated financial
statements.
4
|
GENERAL
STEEL HOLDINGS, INC. AND SUBSIDIARIES
|
||||||||||||||||||||||||||||||||||||||||||||
|
CONSOLIDATED
STATEMENTS OF CHANGES IN EQUITY
|
||||||||||||||||||||||||||||||||||||||||||||
|
(In
thousands, except per share data)
|
||||||||||||||||||||||||||||||||||||||||||||
|
Preferred
stock
|
Common
stock
|
Retained
earnings / Accumulated deficits
|
Accumulated
other
|
|||||||||||||||||||||||||||||||||||||||||
|
Paid-in
|
Statutory
|
Contribution
|
comprehensive
|
Noncontrolling
|
||||||||||||||||||||||||||||||||||||||||
|
Shares
|
Par
value
|
Shares
|
Par
value
|
capital
|
reserves
|
Unrestricted
|
receivable
|
income
|
interest
|
Totals
|
||||||||||||||||||||||||||||||||||
|
BALANCE,
December 31, 2008
|
3,092,899 | $ | 3 | 36,128,833 | $ | 36 | $ | 37,128 | $ | 4,902 | $ | 10,093 | $ | (960 | ) | $ | 8,705 | $ | 54,330 | $ | 114,237 | |||||||||||||||||||||||
|
Net
loss attributable to controlling interest
|
(14,159 | ) | (14,159 | ) | ||||||||||||||||||||||||||||||||||||||||
|
Net
income attributable to noncontrolling interest
|
21,421 | 21,421 | ||||||||||||||||||||||||||||||||||||||||||
|
Disposal
of subsidiaries
|
(293 | ) | (293 | ) | ||||||||||||||||||||||||||||||||||||||||
|
Distribution
of dividend to noncontrolling shareholders
|
(3,305 | ) | (3,305 | ) | ||||||||||||||||||||||||||||||||||||||||
|
Adjustment
to statutory reserve
|
1,925 | (1,925 | ) | |||||||||||||||||||||||||||||||||||||||||
|
Common
stock issued for compensation
|
323,050 | 0.32 | 885 | 885 | ||||||||||||||||||||||||||||||||||||||||
|
Common
stock issued for interest payments
|
196,306 | 0.20 | 745 | 745 | ||||||||||||||||||||||||||||||||||||||||
|
Common
stock issued for repayment of debt
|
300,000 | 0.30 | 1,800 | 1,800 | ||||||||||||||||||||||||||||||||||||||||
|
Notes
converted to common stock
|
7,045,274 | 7.05 | 32,073 | 32,080 | ||||||||||||||||||||||||||||||||||||||||
|
Make
whole shares issued on notes conversion
|
1,795,976 | 1.80 | 7,085 | 7,087 | ||||||||||||||||||||||||||||||||||||||||
|
Common
stock transferred by CEO for compensation
|
207 | 207 | ||||||||||||||||||||||||||||||||||||||||||
|
Reduction
of registered capital
|
960 | 960 | ||||||||||||||||||||||||||||||||||||||||||
|
Foreign
currency translation adjustments
|
(174 | ) | 334 | 160 | ||||||||||||||||||||||||||||||||||||||||
|
BALANCE,
September 30, 2009, unaudited
|
3,092,899 | $ | 3 | 45,789,439 | $ | 46 | $ | 79,923 | $ | 6,827 | $ | (5,991 | ) | $ | $ | 8,531 | $ | 72,487 | $ | 161,826 | ||||||||||||||||||||||||
|
Net
loss attributable to controlling interest
|
(11,085 | ) | (11,085 | ) | ||||||||||||||||||||||||||||||||||||||||
|
Net
income attributable to noncontrolling interest
|
142 | 142 | ||||||||||||||||||||||||||||||||||||||||||
|
Adjustment
to statutory reserve
|
(665 | ) | 665 | |||||||||||||||||||||||||||||||||||||||||
|
Common
stock issued for compensation
|
273,600 | 0.45 | 990 | 990 | ||||||||||||||||||||||||||||||||||||||||
|
Common
stock transferred by CEO for compensation
|
69 | 69 | ||||||||||||||||||||||||||||||||||||||||||
|
Common
stock issued for private placement
|
5,555,556 | 5.56 | 14,606 | 14,612 | ||||||||||||||||||||||||||||||||||||||||
|
Foreign
currency translation adjustments
|
(195 | ) | (31 | ) | (226 | ) | ||||||||||||||||||||||||||||||||||||||
|
BALANCE,
December 31, 2009
|
3,092,899 | $ | 3 | 51,618,595 | $ | 52 | $ | 95,588 | $ | 6,162 | $ | (16,411 | ) | $ | $ | 8,336 | $ | 72,598 | $ | 166,328 | ||||||||||||||||||||||||
|
Net
loss attributable to controlling interest
|
(9,896 | ) | (9,896 | ) | ||||||||||||||||||||||||||||||||||||||||
|
Net
loss attributable to noncontrolling interest
|
(5,469 | ) | (5,469 | ) | ||||||||||||||||||||||||||||||||||||||||
|
Distribution
of dividend to noncontrolling shareholders
|
(3,934 | ) | (3,934 | ) | ||||||||||||||||||||||||||||||||||||||||
|
Noncontrolling
interest acquired
|
(1,270 | ) | (1,270 | ) | ||||||||||||||||||||||||||||||||||||||||
|
Registered
capital received from noncontrolling shareholders
|
1,182 | 1,182 | ||||||||||||||||||||||||||||||||||||||||||
|
Adjustment
to special reserve
|
179 | 111 | 290 | |||||||||||||||||||||||||||||||||||||||||
|
Common
stock issued for compensation
|
571,650 | 0.57 | 1,810 | 1,811 | ||||||||||||||||||||||||||||||||||||||||
|
Common
stock issued for repayment of debt
|
928,163 | 0.93 | 2,403 | 2,404 | ||||||||||||||||||||||||||||||||||||||||
|
Common
stock transferred by CEO for compensation
|
207 | 207 | ||||||||||||||||||||||||||||||||||||||||||
|
Notes
converted to common stock
|
1,208,791 | 1.21 | 3,544 | 3,545 | ||||||||||||||||||||||||||||||||||||||||
|
Make
whole shares issued on notes conversion
|
271,507 | 0.27 | 741 | 741 | ||||||||||||||||||||||||||||||||||||||||
|
Common
stock issued for interest payments
|
79,377 | 0.08 | 217 | 217 | ||||||||||||||||||||||||||||||||||||||||
|
Foreign
currency translation adjustments
|
2,524 | 1,239 | 3,763 | |||||||||||||||||||||||||||||||||||||||||
|
BALANCE,
September 30, 2010, unaudited
|
3,092,899 | $ | 3 | 54,678,083 | $ | 55 | $ | 104,510 | $ | 6,341 | $ | (26,307 | ) | $ | $ | 10,860 | $ | 64,457 | $ | 159,919 | ||||||||||||||||||||||||
The
accompanying notes are an integral part of these consolidated financial
statements.
5
|
GENERAL
STEEL HOLDINGS, INC. AND SUBSIDIARIES
|
||||||||
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||
|
FOR
THE NINE MONTHS ENDED SEPTEMBER 30,
|
||||||||
|
(UNAUDITED)
|
||||||||
|
(In
thousands, except per share data)
|
||||||||
|
Nine
months ended September 30,
|
||||||||
| 2,010 |
2009
|
|||||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
|
Net
loss attributable to controlling interest
|
$ | (9,896 | ) | $ | (14,159 | ) | ||
|
Net
(loss) income attributable to noncontrolling interest
|
(5,469 | ) | 21,421 | |||||
|
Consolidated
net (loss) income
|
(15,365 | ) | 7,262 | |||||
|
Adjustments
to reconcile net loss to cash used in operating
activities:
|
||||||||
|
Depreciation
and amortization
|
31,175 | 23,474 | ||||||
|
Debt
extinguishment
|
- | (2,932 | ) | |||||
|
Impairment
of long-lived assets
|
1,737 | - | ||||||
|
Loss
(gain) on disposal of equipment
|
1,459 | (3,312 | ) | |||||
|
Stock
issued for services and compensation
|
2,018 | 1,092 | ||||||
|
Make
whole shares interest expense on notes conversion
|
1,130 | 2,754 | ||||||
|
Amortization
of deferred note issuance cost and discount on convertible
notes
|
17 | 56 | ||||||
|
Change
in fair value of derivative instrument
|
(13,579 | ) | 23,228 | |||||
|
Income
from investment
|
(5,510 | ) | (3,661 | ) | ||||
|
Deferred
tax assets
|
(5,499 | ) | 5,265 | |||||
|
Changes
in operating assets and liabilities
| ||||||||