YaSheng Group (HERB)

[semiferrum]

RealDutch wrote :
Re: semiferrum post# 1762

"Answers related to the swap agreement you can find in here.

https://www.sec.gov/Archives/edgar/data/1123312/000119983515000565/yasheng_defm14c-16686.htm

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They can't book the value of the swapped in management rights. They have to book them AT COST. The result is that gross margin could be as high as 70% (Almost no depreciation).

The management rights were acquired a long time ago (before the swap). They have less value today as a result of depreciation.

Ms. Wu was mistakenly removed from the BOD in the 10-K. That was all the 10-K/A amendment was about. "
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"They can't book the value of the swapped in management rights. They have to book them AT COST."

This claim of RealDutch is simply false. First of all there has been no costs for the swap exempt the costs of the 2 appraisals given as 2x 250000 USD in this statement and the filing fees given as 5,307.01 USD.

Secondly when a company purchases or swaps in any assets it has to book them as assets on the balance sheet ( intangible assets) and HERB did it in the "pro forma statement " page 9, where HERB stated: "The following is the pro-forma balance sheet pertaining to the assets being swapped for the periods ended December 31, 2014, 2013, and 2012 as if we had affected the Swap for those periods."
See:
https://www.sec.gov/Archives/edgar/data/1123312/000119983515000565/yasheng_defm14c-16686.htm


In this pro-forma balance sheet HERB (filed on 4.Dec.2015 ), stated as per 31.12.14 : " Total Assets 2,454,376,988.34", the appraised value of swapped in management rights were given as: USD 2,308,149,500 in this statement and appraised value of swapped out management rights were given as 2,262,478,200 (swapped out).



2,308,149,500 (swapped in) - 2,262,478,200 (swapped out) = + 45,671,300 USD that had to be added in the balance sheet.

But as I have already shown in my previous filing total assets were given as 258,325,745 Dollars in 2015 in the 10 K/A filing on 2016-08-30.

That means that HERB has stated that between Dec. 4. 2015 (filing of Dec.4. 2015),and Dec. 31.15 (filing of Aug.-30-2016 ),so within 27 days, the value of swapped in mangement rights ( = intangible assets) has vanished nearly completly !

You can read in the filing of Dec.4. 2015), : https://www.sec.gov/Archives/edgar/data/1123312/000119983515000565/yasheng_defm14c-16686.htm


" SWAP OF BALANCE SHEETS

The Swap also includes a swap of balance sheets, meaning that GAAT is swapping out to GY its assets and liabilities related to the right to manage the seven companies who hold the land use farming rights in the properties operated by GAAT and swapping in the assets and liabilities of our sister company, GY, related to the lease management rights that are being swapped in.


SUMMARY TERM SHEET

The following is a summary of the transaction described in more detail in this Information Statement together with the cross references to the sections in the Information Statement which describe the transaction in greater detail:

Our wholly-owned subsidiary GAAT is swapping out its right to manage and operate seven companies which have the long term lease management rights to certain agricultural properties located in North West China and related assets and liabilities pertaining to such properties. See, “Description of Growing Conditions of Crops being Swapped Out”.

As a result of the swap out, GAAT also are eliminating any future revenues from the assets being swapped out. See, “YaSheng Consolidated Statement of Operations”.

In connection with the swap transaction GAAT entered into agreements to receive long-term lease management rights until 2039 of 12,633 acres of plantations which grow broccoli, moso bamboo, tangerines and waxberry. See, “Description of Farmlands being Swapped In”.As a result of the swap, GAAT will be receiving the assets and associated liabilities in connection with the farmlands being swapped in. See, “Assets Swapped In”.
As a result of the swap, GAAT will be entitled to the income from the plantations being swapped in. For information concerning the historical income and expense pertaining to the assets being swapped in, see “Statements of Income”.
The swap of assets will be a non-currency transaction executed with our sister company, GY. There will be no monetary payments made or received by GAAT or any party in connection with the swap transaction. See, “Financial Terms of Swap”."

ASSETS SWAPPED IN
The following is the pro-forma balance sheet pertaining to the assets being swapped for the periods ended December 31, 2014, 2013, and 2012 as if we had affected the Swap for those periods:

Balance sheet

$

December 31, 2014

December 31, 2013

December 31, 2012

Current assets

Cash and cash equivalent
1,482,866.49 1,627,458.65 1,695,472.15
Accounts receivable
911,732.31 793,337.21 789,059.46
Inventories
1,327,592.45 1,398,435.26 1,472,710.25
Prepayments
3,002,941.66 2,349,882.73 2,495,425.98
Deferred income tax assets

other

Total Current Assets
6,725,132.91 6,169,113.85 6,452,667.84

Non-current assets

Long-term investments

Property, plant, and equipment
10,849,479.63 9,634,761.91 7,942,054.39
Construction in progress
30,993,174.95 25,232,914.03 17,981,355.34
Intangible assets
2,405,809,200.85 2,335,606,045.70 2,197,557,811.15
Deferred income tax assets

Total Assets
2,454,376,988.34 2,376,642,835.48 2,229,933,888.72

Current Liabilities

Accounts payable
18,415.46 - -
Accrued employee compensation and benefits
63,072.13 45,707.16 42,626.82
Current maturities of long-term debt

Other current liabilities
23,940.10 12,687.10 14,434.01

Long-term Liabilities

long-term debt

Obligations under capital leases

Deferred income tax liabilities

Other non-current liabilities

Total Liabilities
105,427.68 58,394.27 57,060.84

Stockholder’s equity

Paid in on capital stock Common
2,758,620.69 2,768,620.12 2,685,546.10
Additional paid-in capital
263,135,806.50 264,089,619.31 256,165,460.19
Other comprehensive income

Retained earnings
2,188,377,133.46 2,109,726,201.78 1,971,025,821.60
Total Equity & Liabilities
2,454,376,988.34 2,376,642,835.48 2,229,933,888.72

See attached Exhibit 3 setting forth the financial statements in full pertaining to assets being swapped in."
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So however you turn it, there is obvious fraud/embezzlement
by HERB.