Attached files
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| 8-K - FORM 8-K - Sino Clean Energy Inc | v233215_8k.htm |
Sino Clean Energy, Inc. Announces Second Quarter 2011 Financial Results
2Q11 Revenue Decreased 4.7% Year-Over-Year to $ 23.0 million
2Q11 Net Income Increased 42.2% Year-Over-Year to $12.7 million
FY11 Revenue Guidance in the range of $101.5 million to $110.7 million
XI'AN, China, August 23, 2011 -- Sino Clean Energy Inc. (NASDAQ: SCEI) ("Sino Clean Energy," or the "Company"), a leading producer and distributor of coal-water slurry fuel ("CWSF") in China, today announced unaudited financial results for the second quarter of 2011.
Second Quarter 2011 Financial Highlights
|
·
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Revenues in the second quarter of 2011 were $23.0 million, a decrease of 4.7% from $24.1 million in the same quarter of 2010.
|
|
·
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Net income in the second quarter of 2011 was $12.7 million, an increase of 42.2% from $8.9 million in the same quarter of 2010. Non-GAAP adjusted earnings, which excludes change in fair value of derivative liabilities of $9.4 million, was $3.3 million, a decrease of 46.5% from $6.1 million in the same quarter of 2010.
|
|
·
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Earnings per share were $0.54. Adjusted earnings per share were $0.14.
|
|
·
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Net cash generated from operations was $1.9 million in the six months ended June 30, 2011, compared to $ 10.2 million in the six months ended June 30, 2010.
|
Mr. Baowen Ren, chairman and chief executive officer of Sino Clean Energy, commented, "I’m happy the company has largely maintained consistent sales volume during a challenging second quarter when our largest customer, Haizhong Heating, which represented around 80% of our Shenyang-based revenues, suspended operations of its CWSF boilers. As a result, our Shengyang facility ceased operations in late April 2011. Our business in Tongchuan was also challenged by the emergence of a new competitor. On the positive side, the customer base and order volume of our Dongguan facility continued to grow during the period. The Dongguan facility contributed 38% of revenue in the second quarter, which partly offset the revenue reduction from our Shenyang and Tongchuan facilities. As Haizhong Heating plans to restart its CWSF operations at the end of September, three months later than our original estimation, our production in Shenyang will remain suspended during the third quarter.”
Mr. Ren continued, “Although we are encountering some setbacks due to tightening macro policy and increased local competition, the Company remains confident in the prospects of CWSF and will continue to invest in building up our capacity through production line expansions and acquisitions. Our margins might be under pressure for the rest of 2011, but we believe that capacity investment will position Sino Clean Energy favorably in the mid-to-long term.”
Second Quarter 2011 Financial Results
Revenue in the second quarter 2011 decreased 4.7% to $23.0 million from $24.1 million in the same period of 2010, primarily due to a decrease in sales to our major customer, Haizhong Heating. The customer suspended operation of its CWSF boilers due to the modification of a pipeline in certain areas of the Ming Fa real estate development project. Due to the cessation of the Haizhong Heating CWSF boiler operation and the suspension of its business during the pipeline modification, it became uneconomical for the company’s Shengyang facility to continue operations for a small number of customers, which represented less than 20% of Shenyang-generated revenues. As a result, our Shengyang facility ceased operations in late April 2011. In addition, our subsidiary Shanxi Suo’ang New Energy lost five customers to a new competitor. Four other customers experienced difficulties in obtaining bank loans that would have enabled them to continue business with Sino Clean Energy. During the second quarter of 2011, the Company sold 187,833 metric tons of CWSF compared to 226,986 metric tons in the same period of 2010, representing a decrease of 17.2%. The Company's annual production capacity at June 30, 2011 was 1,150,000 metric tons, as compared to 850,000 metric tons at June 30, 2010. For the first six months of 2011, revenue was $56.8 million, representing an increase of 16.8% over $48.7 million for the same period in 2010.
As of June 30, 2011 Sino Clean Energy had 38 active customers under CWSF supply agreements totaling approximately 1,090,000 metric tons per year, compared to 30 customers totaling approximately 600,000 metric tons of CWSF per year at June 30, 2010.
Cost of Goods Sold was $14.9 million in the second quarter 2011, compared to $14.8 million in the same period of 2010, representing an increase of 0.7%, due to the higher purchase price of coal and depreciation expenses.
Gross Profit in the second quarter of 2011 decreased 13.2% to $8.1 million from $9.4 million in the same period of 2010. Gross margin was 35.4%, compared to 38.8% in the second quarter of 2010. This primarily resulted as a combination of a lower selling price to our largest customer, Haizhong Heating, significantly higher purchase prices for coal in Dongguan, and higher depreciation costs for plant and machinery at our Dongguan facility.
Selling expenses were $1.3 million in the second quarter of 2011, as compared to $1.1 million in the same period of 2010, an increase of 13.9%. This increase is mainly attributable to increased transportation costs and marketing costs due to an increased number of customers.
General and Administrative Expenses were $2.5 million in the second quarter of 2011, compared to $0.6 million in the same period of 2010, representing an increase of 301.3%. This was primarily attributable to the bad debt expense of $1.1 million, the expansion of our operations, and increased expenses related to our company being a public company.
Income from Operations decreased 43.1% to $4.3 million in the second quarter of 2011 from $7.6 million in the same period of 2010, due to the above-mentioned factors.
Provision for income taxes was $1.1 million in the second quarter of 2011, compared to $1.5 million in the same quarter of 2010. The decrease in income taxes reflects the decrease in taxable income from our operations in China.
Net income in the second quarter of 2011 was $12.7 million and diluted earnings per share were $0.54. Adjusting for non-cash charges during each respective period, adjusted earnings were $3.3 million and $6.1 million for the second quarters 2011 and 2010, yielding $0.14 and $0.32 in diluted earnings per share, respectively.
As of June 30, 2011, the Company had cash and cash equivalents of $61.1 million, compared to $52.1 million at as of December 31, 2010. Net cash generated from operations was $1.8 million in the six months ended June 30, 2011, compared to $10.2 million in the six months ended June 30, 2010. This decline was mainly due to increases in accounts receivable and tax payments. The Company had working capital of $81.7 million at June 30, 2011 and a current ratio of 21-to-1.
Net accounts receivable balance was $13.0 million at June 30, 2011, compared to $1.3 million and $3.9 million at June 30 and December 31, 2010, respectively. Allowance for doubtful accounts was $1.1 million at June 30, 2011, compared to nil at June 30, and December 31, 2010, respectively.
The annualized days sales outstanding for six months ending on June 30, 2011 were 42 days compared to 37 days in the second quarter 2010. The lengthening of days sales outstanding reflects the tightening credit environment around Tongchuan and the trend of growing CSWF purchaser power in Dongguan.
On May 9, 2011, the Board of Directors authorized a stock repurchase for up to $20 million of the Company’s common stock. As of June 30, 2011, 321,100 shares for $799,423 had been repurchased. The Company’s chairman and CEO, Mr. Baowen Ren, also personally repurchased an additional 115,000 shares for $297,497.
Recent Material Events and Updates
Acquisition Agreement for Foshan Nan Hai
In July 2011, Sino Clean Energy entered into an Equity Acquisition Agreement to purchase 100% of the outstanding equity interest in Crown Energy Limited, an investment company registered in Hong Kong, which as its sole business holds 60% of the equity interest in Foshan Nan Hai CWSF Co., Ltd. ("Foshan Nan Hai"). Foshan Nan Hai has an installed capacity of 1.2 million metric tons and is widely recognized as the largest producer of CWSF in Guangdong province and one of the largest producers in China.
Appointment of Chairman of the Audit Committee
Also in July 2011, the Company's board of directors appointed Mr. Paul K. S. Chiu as director and Chairman of the board’s Audit Committee. Mr. Chiu has extensive experience in corporate finance and management at both Hong Kong and Canadian companies. He has been actively engaged in SEC financial reporting and compliance for the last 5 years.
Asset Audit
The Company has engaged a third-party auditor, US-based Thornhill Capital LLC, to conduct a thorough evaluation of SCEI’s assets. Management expects Thornhill to submit its conclusions to the Company by mid September. The Audit Committee intends to review the report and submit its opinions to the Board following receipt of the Thornhill audit report.
Lawsuit against Alfred Little
As previously noted, the Company filed a lawsuit against Alfred Little in the New York State Supreme Court on May 9, 2011. It has 120 days from that date to serve a copy on the defendants, which is the first step in pursuing the suit. Usually, serving a defendant is not difficult, but because Alfred Little hides behind a pseudonym, he, or it, is difficult to find and serve. The Company’s lawyers are making efforts to break through the pseudonym. When it does so, the Company will serve the other defendants as well, since it is more efficient to pursue all of the defendants at the same time rather than pursue the case piecemeal. If the pseudonym has not been broken within 120 days, the company can and will request more time to serve Little.
Cooperation MOU with Nathalin Welstar Energy, Company Limited
In August, Sino Clean Energy signed a Memorandum of Understanding (“MOU”) and a preliminary engineering, procurement and construction (“EPC”) agreement with Nathalin Welstar Energy, Company Limited (“Nathalin Welstar Energy” or “Nathalin”) for cooperation in the construction of a coal water slurry plant in Thailand. Nathalin Welstar Energy, a subsidiary of leading Thai marine petroleum transport company Nathalin Group, focuses on developing environmentally-friendly energy sources, such as solar, wind and clean coal. Under the agreement, Nathalin would invest in a 50,000 metric ton coal water slurry fuel (“CWSF”) production facility and a minimum 6,000 KW net output electricity power plant with associated infrastructure. A leader in CWSF manufacturing and distribution in China and what management believes is the first US-listed Chinese company in the CWSF industry, Sino Clean Energy intends to undertake a site visit in Thailand for study and inspection to begin the process of consulting on the technical and financial aspects of the project. If the pilot project succeeds, both parties plan to apply the cooperative model to larger scale CWSF facilities and electric power plants in Thailand.
Financial Outlook for 2011
Due to the extended suspension of CSWF operations of a major client, Company management is adjusting its fiscal 2011 guidance and expects revenue of between $101.5 million and $110.7 million. It expects Non-GAPP adjusted earnings to be in the range of $23.02 million to $24.80 million. The Company expects full year adjusted earnings per share of between $0.98 and $1.06. This guidance assumes total sales volume of 850,000-920,000 metric tons of CWSF in 2011.
Because of loss of certain customer accounts and cancelled orders from existing customers, the company is making efforts to diversify its customer base and provide a more stable source of revenues. As a result, management has increased the number of sales representatives and raised incentives for new accounts that enter into long-term purchasing agreements.
Exchange Rate
This announcement contains translations of certain Renminbi amounts into US dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to US dollars were made at the noon buying rate of RMB6.4635 to USD1.00 on June 30, 2011 in the City of New York for cable transfers in Renminbi per U.S. dollar as certified for customs purposes by the Federal Reserve Bank of New York.
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Exchange rate
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||||||||||||
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6/30/2011
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12/31/2010
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6/30/2010
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||||||||||
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Period end RMB : US$
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6.4635 | 6.6 | 6.7909 | |||||||||
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Average RMB : US$
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6.5291 | 6.769 | 6.8251 | |||||||||
Conference Call
The Company will host a conference call at 9:00 a.m. ET on Tuesday, August 23, 2011, which is 9:00 p.m. Beijing Time on Tuesday, August 23, 2011, to discuss second quarter results and answer questions from investors.
To access the conference call, please dial:
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US:
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+1-877-941-1430
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International:
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+1-480-629-9857
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Please ask to be connected to the "Sino Clean Energy call" and provide the conference ID: 4466323.
Sino Clean Energy will also broadcast a live audio webcast of the conference call. The broadcast will be available by visiting the "Investor Relations" section of the Company's web site at http://www.sinocei.net.
An archive of the call will be available through August 30, 2011 by dialing:
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US:
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+1-877-870-5176
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International:
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+1-858-384-5517
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About Sino Clean Energy
Sino Clean Energy is the third largest producer of coal-water slurry fuel ("CWSF") by sales in China, according to data provided in Frost & Sullivan’s 2010 Chinese CWSF market report. A leader in developing CWSF as a cleaner alternative to burning coal aggregate in heating, industrial and power generation for residential and industrial applications, the Company has seven production lines located in Shaanxi, Liaoning, and Guangdong provinces. For more information about Sino Clean Energy, please visit http://www.sinocei.net.
Contact Information
Sino Clean Energy Inc.
Jing Li, Assistant to the CEO
Phone: +86-29-8844-7960 ext. 802
Email: Jing.Li@sinocei.net
ICR Inc.
Rob Koepp
Phone: +86-10-6583-7516 or +1-646-328-2526
E-mail: SCEI@icrinc.com
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. The Company believes that these non-GAAP financial measures are useful to investors because they exclude non-cash charges that our management excludes when it internally evaluates the performance of the Company's business and makes operating decisions, including internal budgeting, and performance measurement, because these measures provide a consistent method of comparison to historical periods. Moreover, management believes these non-GAAP measures reflect the essential operating activities of Sino Clean Energy. Accordingly, management excludes the change in derivative liabilities, gains (losses) on extinguishment of derivative liabilities, and amortization of note discount when making operational decisions. The Company believes that providing the non-GAAP measures that management uses to its investors is useful to investors for a number of reasons. The non-GAAP measures provide a consistent basis for investors to understand the Company's financial performance in comparison to historical periods. In addition, it allows investors to evaluate the Company's performance using the same methodology and information as that used by our management. Non-GAAP measures are subject to inherent limitations because they do not include all of the expenses included under GAAP and because they involve the exercise of judgment of which charges are excluded from the non-GAAP financial measures. However, our management compensates for these limitations by providing the relevant disclosure of the items excluded.
The following table provides the non-GAAP financial measure and the related GAAP measure and provides a reconciliation of the non-GAAP measure to the equivalent GAAP measure.
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Three months ended June 30,
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Six months ended June 30,
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|||||||||||||||
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2011
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2010
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2011
|
2010
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|||||||||||||
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(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|||||||||||||
|
Net income
|
12,717,779
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8,940,759
|
24,797,532
|
29,401,380
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||||||||||||
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Non-GAAP adjustments
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||||||||||||||||
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Amortization of discount on convertible notes
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-
|
-
|
-
|
8,593,453
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||||||||||||
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Value of shares issued for bonus interest
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1,864,701
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|||||||||||||||
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Gain on extinguishment of derivative liability
|
(482,837
|
)
|
-
|
(482,837
|
)
|
(28,404,181
|
)
|
|||||||||
|
Change in fair value of derivative liabilities
|
(8,980,381
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)
|
(2,862,263
|
)
|
(12,991,011
|
)
|
1,377,666
|
|||||||||
|
Non-GAAP Adjusted Earnings (Unaudited)
|
$
|
3,254,561
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$
|
6,078,496
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$
|
11,323,684
|
$
|
12,833,019
|
||||||||
Safe Harbor Statement
This press release contains certain "forward-looking statements," as defined in the United States Private Securities Litigation Reform Act of 1995, that involve a number of risks and uncertainties. There can be no assurance that such statements will prove to be accurate and the actual results and future events could differ materially from management's current expectations. Such factors include, but are not limited to uncertainties in product demand, the impact of competitive products and pricing, our ability to obtain regulatory approvals, changing economic conditions around the world and other factors detailed from time to time in the Company's filings with the United States Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
FINANCIAL INFORMATION
Sino Clean Energy Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
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June 30,
|
December 31,
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|||||||
|
2011
|
2010
|
|||||||
|
(Unaudited)
|
||||||||
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ASSETS
|
||||||||
|
Cash and cash equivalents
|
$
|
61,067,550
|
$
|
52,055,857
|
||||
|
Accounts receivable, net of allowance for doubtful accounts of $1,083,006
and $0 at June 30, 2011 and December 31, 2010, respectively
|
12,970,771
|
3,856,941
|
||||||
|
Inventories
|
1,786,422
|
1,261,334
|
||||||
|
Prepaid inventories
|
9,320,158
|
10,242,878
|
||||||
|
Prepaid and other current assets
|
216,911
|
51,048
|
||||||
|
Due from related party-Suo’ang BST
|
-
|
10,307,912
|
||||||
|
Note receivable
|
300,000
|
-
|
||||||
|
Land use right – current portion
|
115,188
|
40,079
|
||||||
|
Total current assets
|
85,777,000
|
77,816,049
|
||||||
|
Land use right – non-current portion
|
5,419,156
|
1,799,889
|
||||||
|
Property, plant and equipment, net
|
19,309,714
|
13,609,932
|
||||||
|
Deposit on land use rights, plant and equipment
|
3,225,806
|
9,409,091
|
||||||
|
Goodwill
|
762,018
|
762,018
|
||||||
|
Total assets
|
$
|
114,493,694
|
$
|
103,396,979
|
||||
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
|
Accounts payable and accrued expenses
|
$
|
1,387,273
|
$
|
1,560,183
|
||||
|
Payable on plant acquisition
|
186,138
|
-
|
||||||
|
Taxes payable
|
1,411,904
|
3,329,844
|
||||||
|
Mortgage payable – current portion
|
5,691
|
5,450
|
||||||
|
Amount due to director
|
48,457
|
48,457
|
||||||
|
Derivative liabilities
|
1,081,179
|
14,555,027
|
||||||
|
Total current liabilities
|
4,120,642
|
19,498,961
|
||||||
|
Mortgage payable –non-current portion
|
160,600
|
160,095
|
||||||
|
Total liabilities
|
4,281,242
|
19,659,056
|
||||||
|
Commitments and contingencies
|
||||||||
|
Shareholders’ Equity
|
||||||||
|
Preferred stock, $0.001 par value, 50,000,000 shares authorized, none issued
and outstanding
|
||||||||
|
Common stock, $0.001 par value, 30,000,000 shares authorized, 23,677,034
and 23,452,270 issued and outstanding as of June 30, 2011 and December 31, 2010 respectively
|
23,654
|
23,452
|
||||||
|
Additional paid-in capital
|
66,881,558
|
66,567,560
|
||||||
|
Treasury stock, at cost, 321,100 and 0 shares, respectively
|
(799,423
|
)
|
-
|
|||||
|
Retained earnings
|
34,019,456
|
9,221,924
|
||||||
|
Statutory reserves
|
4,739,048
|
4,739,048
|
||||||
|
Accumulated other comprehensive income
|
5,348,159
|
3,185,939
|
||||||
|
Total shareholders’ equity
|
110,212,452
|
83,737,923
|
||||||
|
Total liabilities and shareholders’ equity
|
$
|
114,493,694
|
$
|
103,396,979
|
||||
Condensed Consolidated Statements of Income and Other Comprehensive Income (Unaudited)
|
Three months ended
June 30,
|
Six months ended
June 30,
|
|||||||||||||||
|
2011
|
2010
|
2011
|
2010
|
|||||||||||||
|
Revenue
|
$
|
23,017,357
|
$
|
24,149,761
|
$
|
56,798,089
|
$
|
48,658,765
|
||||||||
|
Cost of goods sold
|
(14,878,987
|
)
|
(14,779,016
|
)
|
(36,160,395
|
)
|
(29,179,193
|
)
|
||||||||
|
Gross profit
|
8,138,370
|
9,370,745
|
20,637,694
|
19,479,572
|
||||||||||||
|
Selling expenses
|
1,294,452
|
1,136,019
|
2,821,918
|
2,047,098
|
||||||||||||
|
General and administrative expenses
|
2,512,591
|
626,053
|
3,544,133
|
1,345,235
|
||||||||||||
|
Income from operations
|
4,331,327
|
7,608,673
|
14,271,643
|
16,087,239
|
||||||||||||
|
Other income (expense)
|
||||||||||||||||
|
Interest and finance cost
|
-
|
(13,591
|
)
|
-
|
(10,458,154
|
)
|
||||||||||
|
Interest income
|
71,712
|
19,353
|
115,899
|
32,224
|
||||||||||||
|
Gain on extinguishment of derivative liability
|
482,837
|
-
|
482,837
|
28,404,181
|
||||||||||||
|
Change in fair value of derivative liabilities
|
8,980,381
|
2,862,263
|
12,991,011
|
(1,377,666
|
)
|
|||||||||||
|
Sundry income
|
-
|
4,688
|
-
|
4,688
|
||||||||||||
|
Total other income (expense)
|
9,534,930
|
2,872,713
|
13,589,747
|
16,605,273
|
||||||||||||
|
Income before provision for income taxes
|
13,866,257
|
10,481,386
|
27,861,390
|
32,692,512
|
||||||||||||
|
Provision for income taxes
|
1,148,478
|
1,540,627
|
3,063,858
|
3,291,132
|
||||||||||||
|
Net income
|
12,717,779
|
8,940,759
|
24,797,532
|
29,401,380
|
||||||||||||
|
Other comprehensive income
|
||||||||||||||||
|
Foreign currency translation adjustment
|
1,243,991
|
269,266
|
2,162,220
|
281,472
|
||||||||||||
|
Comprehensive income
|
$
|
13,961,770
|
$
|
9,210,025
|
$
|
26,959,752
|
$
|
29,682,852
|
||||||||
|
Weighted average number of shares
|
||||||||||||||||
|
-Basic
|
23,593,887
|
16,557,000
|
23,593,887
|
14,714,742
|
||||||||||||
|
-Diluted
|
23,593,887
|
19,216,041
|
23,593,887
|
17,161,540
|
||||||||||||
|
Income (loss) per common share
|
||||||||||||||||
|
- Basic
|
$
|
0.54
|
$
|
0.54
|
$
|
1.05
|
2.00
|
|||||||||
|
- Diluted
|
$
|
0.54
|
$
|
0.47
|
$
|
1.05
|
$
|
1.71
|
||||||||
Sino-Clean Energy, Inc. and Subsidiaries
Condensed Consolidated Statements of Changes in Shareholders’ Equity
For the six months ended June 30, 2011
(Unaudited)
|
Accumulated
|
||||||||||||||||||||||||||||||||
|
Additional
|
other
|
|||||||||||||||||||||||||||||||
|
Common Stock
|
paid-in
|
Treasury
|
Statutory
|
Retained
|
comprehensive
|
|||||||||||||||||||||||||||
|
Share
|
Amount
|
capital
|
stock
|
reserve
|
earnings
|
income
|
Total
|
|||||||||||||||||||||||||
|
Balance, January 1, 2011
|
23,452,270
|
$
|
23,452
|
$
|
66,567,560
|
$
|
-
|
$
|
4,739,048
|
$
|
9,221,924
|
$
|
3,185,939
|
$
|
83,737,923
|
|||||||||||||||||
|
Share issued for exercise of warrants and options
|
224,764
|
202
|
313,998
|
-
|
-
|
-
|
-
|
314,200
|
||||||||||||||||||||||||
|
Purchase of treasury stock
|
(799,423
|
)
|
(799,423
|
)
|
||||||||||||||||||||||||||||
|
Net income
|
-
|
-
|
-
|
-
|
-
|
24,797,532
|
-
|
24,797,532
|
||||||||||||||||||||||||
|
Foreign currency translation gain
|
-
|
-
|
-
|
-
|
-
|
-
|
2,162,220
|
2,162,220
|
||||||||||||||||||||||||
|
Balance, June 30, 2011
|
23,677,034
|
$
|
23,654
|
$
|
66,881,558
|
$
|
(799,423
|
)
|
$
|
4,739,048
|
$
|
34,019,456
|
$
|
5,348,159
|
$
|
110,212,452
|
||||||||||||||||
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
Six months ended June 30,
|
||||||||
|
2011
|
2010
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
Net income
|
$
|
24,797,532
|
$
|
29,401,380
|
||||
|
Adjustments to reconcile net income to cash provided by operating activities :
|
||||||||
|
Depreciation and amortization
|
1,483,020
|
1,008,832
|
||||||
|
Amortization of discount on convertible notes
|
-
|
8,601,975
|
||||||
|
Fair value of vested stock options
|
-
|
18,152
|
||||||
|
Fair value of common stock issued for repayment of interest expense
|
-
|
1,864,701
|
||||||
|
Change in fair value of derivative liabilities
|
(12,991,011
|
)
|
1,377,666
|
|||||
|
Gain on extinguishment of derivative liability
|
(482,837
|
)
|
(28,404,181
|
)
|
||||
|
Bad debt expense
|
1,072,124
|
-
|
||||||
|
Change in operating assets and liabilities :
|
||||||||
|
Accounts receivable
|
(10,247,498
|
)
|
(6,215,393
|
)
|
||||
|
Inventories
|
(541,636
|
)
|
147,892
|
|||||
|
Prepaid inventories
|
788,335
|
672,922
|
||||||
|
Prepaid and other current assets
|
(166,533
|
)
|
287,106
|
|||||
|
Prepaid sales taxes
|
-
|
138,495
|
||||||
|
Accounts payable and accrued expenses
|
33,697
|
236,559
|
||||||
|
Taxes payable
|
(1,874,253
|
)
|
1,111,028
|
|||||
|
Net cash provided by operating activities
|
1,870,940
|
10,247,134
|
||||||
|
Cash flows from investing activities:
|
||||||||
|
Deposits on land use rights, plant and equipment
|
(3,193,396
|
)
|
(97,320
|
)
|
||||
|
Repayment from related party- Suo’ang BST
|
10,172,674
|
-
|
||||||
|
Purchase of property, plant and equipment
|
(1,280,304
|
)
|
(2,606,556
|
)
|
||||
|
Note receivable
|
(300,000
|
)
|
-
|
|||||
|
Net cash provided by (used in) investing activities
|
5,398,974
|
(2,703,876
|
)
|
|||||
|
Cash flows from financing activities:
|
||||||||
|
Prepayment and deposits related to deferred offering costs
|
-
|
(652,053
|
)
|
|||||
|
Cash received from exercise of warrants and options
|
314,200
|
173,980
|
||||||
|
Repayment of mortgage payable
|
(2,752
|
)
|
-
|
|||||
|
Purchase of treasury stock
|
(799,423
|
)
|
-
|
|||||
|
Net cash used in financing activities
|
(487,975
|
)
|
(478,073
|
)
|
||||
|
Effect of foreign currency translation
|
2,229,754
|
207,596
|
||||||
|
Net increase in cash and cash equivalents
|
9,011,693
|
7,272,781
|
||||||
|
Cash and cash equivalents, beginning of period
|
52,055,857
|
18,302,558
|
||||||
|
Cash and cash equivalents, end of period
|
$
|
61,067,550
|
$
|
25,575,339
|
||||
|
Supplemental Disclosure Information:
|
||||||||
|
Cash paid for taxes
|
$
|
8,857,920
|
$
|
2,641,771
|
||||
|
Supplemental non-cash investing and financing activities:
|
||||||||
|
Deposits applied to purchase of land use rights, property, plant and equipment
|
$
|
9,285,645
|
$
|
-
|
||||
|
Issuance of shares upon conversion of convertible notes
|
$
|
-
|
$
|
10,217,000
|
||||