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Good news #2 - they found an auditor. Looks like we are slowly getting on the right track.
This is actually good. They finally stoped hiding this fact that everyone already knew anyway = move in positive direction.
Don't worry - they will PR the same day they find new Auditor.
Hopefully they will clean the accounting mess and hire respectable Auditor to restore confidence and leave this embarrasment behind.
This is not good. Didn't expect them not to have an auditor by now.
8K announces dismissal/resignation of accounting firm:
http://xml.10kwizard.com/filing_raw.php?repo=tenk&ipage=7715214
What is more troubling than the announcement itself is the fact, sated in the 8K, that the company has not yet engaged a new accounting firm. This means obviously that it will be some time before any annual report for 2010 will be filed, since an accounting firm will need to prepare such an audited filing.
Oh yea, and replacing that clown Kevin from Nuwagroup would not hurt as well. They don't even answer most of emails.
I don't know, but my guess is they have found some fraud and/or management was refusing to cooperate. Probably both. I am afraid that's the same reason All independent directors resigned.
The only positive reason may be if they want to relist somewhere else, but this is a long shot.
I hope they will hire good accounting firm ASAP and will come out clean restating whatever is needed.
Why you think their auditor has resigned?
According to annual report Jing’an Wang (CEO) owns 7,305,074 shares or 31.69 %.
And bad news - Their Auditor and all independent directors resigned. IR firm is not responding to emails. Company is not responding as well. Is there a law that requires them to answer shareholder questions?
Now they got this certification which is good and someone still keeps web site running updating news section.
Does anyone know who biggest independent shareholder is? I think this is a good time to ask management a few questions.
Great news, they finally received COS certificaten for Diosmin. https://extranet.edqm.eu/4DLink1/4DCGI/Web_View/mono/1611
Good luck!
When the filing deadline came & no 2010 audited results were released I reluctantly sold my position.
Without audited results the Q results & forward guidance mean nothing & the pps will continue to drop.
This was my largest position. I will continue to watch how this unfolds as I believe hfgb is a real company but how real have their actual results been.
They will attend Frankfurt exhibition on 25-27 October, 2011.
http://www.cphi.com/exhibitor-list
check: "exhibitor list 2011" and look for Xi'an Huifeng Bio-Pharmaceutical Technol
Their Location: 31C23
25 - 27 October in Messe Frankfurt, Germany for CPhI Worldwide 2011, the world's leading pharmaceutical networking event with 28,500 attendees from 140 countries. Meet face-to-face with potential customers, stay informed about the latest industry trends and remain one step ahead of a constantly changing pharma market. Make sure you are there and ready for business!
smart move pappy
$0.291 down $0.039 on "big" volume of 125 shares.
Market maker is in full control of the pps as long as this low volume continues.
I don't usually speak favoribly about mm but with the auditor still not signing off on 2010 results can you blame him for not wanting to pay much for shares without someone else willing to buy as well.
I am still holding my position here as i believe hfgb is not a fraud & has great growth prospects with a top 10 auditor.
However at this point I am not putting anymore of my 60% cash into this space until I see the audited numbers & a positive volume spike to the upside letting me know other investors also believe hfgb is legit.
UTA & HFGB 2 of my 5 amigos for 2011 in limbo, however the other 3 [wkbt nuin ckgt] have released 2010 "audited" results but you wouldn't know it by looking at the pps since they reported some outstanding results.
Making me even more willing to keep remaining cash on the sidelines.
I definitely see it as a positive that they went through the effort to make this adjustment. Right now, I agree with Pappy, I do not intend to invest in any of these companies longterm, at least for now, but HFGB could be one that would be worth taking a risk on and be very valuable in a few years. They have a decent auditor, while no company in the china small cap space will be able to escape negativity, due to HFGB's low amount of interest and it being on the pinks, they will not really garner too much lingering individual negativity. MAYBE in a few years they can come out of this alive. If and when I decide to get in, it will be slowly over time.
Hi Arno,
No, I hadn't seen the article; thanks for the heads up. Here it is for those who didn't catch it. Definitely a good thing to hire someone with long experience in "U.S. GAAP financial reporting and public accounting".
Huifeng Bio-Pharmaceutical Technology Announces New Senior Vice President of Finance
Press Release Source: Huifeng Bio-Pharmaceutical Technology, Inc. On Wednesday March 23, 2011, 7:00 am EDT
XI'AN, China, March 23, 2011 /PRNewswire-Asia-FirstCall/ -- Huifeng Bio-Pharmaceutical Technology, Inc. (OTC Bulletin Board:HFGB.ob - News) ("Huifeng" or "the Company"), specializing in developing and producing botanical extracts and other raw materials for pharmaceuticals and food additives, today announced the appointment of Ms. Amy Xue to Senior Vice President of Finance.
"We are truly delighted that Ms. Xue will be a part of the Company," said Jing'an Wang, Founder, Chairman, and Chief Executive Officer of Huifeng. "Her appointment is an important step in strengthening the Company's internal controls over financial reporting. Ms. Xue brings a tremendous amount of knowledge and strategic counsel to our senior management team and we are fully confident that she will play an integral role in the achievement of Huifeng's growth and financial goals."
Ms. Xue has extensive experience in U.S. GAAP financial reporting and public accounting, and she has performed audit and accounting services for companies in a variety of industries. In 2010, she founded Farolfi & Company, LLC, a New York based accounting and business advisory firm. Prior to that, Ms. Xue was a senior manager of Acquavella, Chiarelli, Shuster, Berkower & Co., LLP, a public accounting firm in New York that focuses on SEC audits with Chinese companies.
Ms. Xue holds a Master's in accounting from Binghamton University and a B.S. in law from Peking University in Beijing, China. She is a U.S. Certified Public Accountant in New York and a member of the American Institute of Certified Public Accountants (AICPA).
hi steve
no problem.
have you seen the news.? new vice lday
it's a good move
we must think it's a real firm & and a real lady
waiting for the year figures & the new production site
arno
Arno and others, sorry about that. I saw the huge drop today and saw the filing and drew the wrong conclusion. Quite the bonehead.
Steve
it's already old news
When it rains it pours:
Form 8-K/A for HUIFENG BIO-PHARMACEUTICAL TECHNOLOGY, INC.
Non-Reliance on Previous Financials, Audits or Inte
tem 4.02. Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or Completed Interim Review.
On February 15, 2011, the board of directors of Huifeng Bio-Pharmaceutical Technology, Inc (the "Company"), based on the recommendation of the audit committee and in consultation with management, concluded that, because of inadvertent errors identified in the Company's previously issued financial statements for the fiscal year ended December 31, 2009 and the first three fiscal quarters of 2010, the Company will restate its previously issued financial statements for the fiscal year ended December 31, 2009 and the first three fiscal quarters of 2010. Accordingly, investors should no longer rely upon the Company's previously released financial statements for these periods and any earnings releases or other communications relating to these periods.
As discussed below, management discovered these non-cash errors during an internal review to prepare responses to comments the Company received from the Securities and Exchange Commission (the "SEC") regarding the SEC's review of the Company's Form 10-K for the year ended December 31, 2009 and the year-end financial statements and audit. In response to the SEC comment letter, the audit committee of the Company's board of directors initiated an internal review to determine the existence of and reason for errors and determined errors in the classification of certain warrants and the accounting treatment of the modification of certain convertible notes. In summary, as discussed more particularly below, the outstanding warrants should be classified as liability according to ASC 815-40, which became effective on January 1, 2009. The Company erroneously classified the warrants as equity for the relevant periods. The modification of convertible promissory notes originally issued on December 31, 2007 should have been treated as an extinguishment of debt pursuant to ASC 405-20.
None of the financial statement errors implicate misconduct with respect to the Company or its management or employees, which were based on a misunderstanding of applicable accounting rules.
The amounts disclosed below are the effect of these errors on each reporting period. The impact of the individual errors will be disclosed in more detail in the Company's restated financial statements. The adjustments necessary to correct the non-cash errors will have no effect on reported cash flow from operations.
The Company has discovered the following errors:
Warrant Liabilities
On December 31, 2007, the Company issued warrants in connection with the issuance and sale of convertible promissory notes. The warrants were classified as equity in the Company's audited financial statements for fiscal years 2007, 2008 and 2009. On January 1, 2009, FASB ASC Topic 815, entitled "Derivatives and Hedging" ("ASC 815") (previously EITF 07-5, "Determining Whether an Instrument (or Embedded Feature) is Indexed to an Entity's Own Stock")), became effective, ASC 815 constitutes new guidance for instruments indexed to an entity's own stock and the resulting liability or equity classification. In the context of responding to the SEC's comment letter, the Company performed an assessment of these warrants and concluded that the warrants are within the scope of ASC 815. Accordingly, ASC 815 should have been adopted as of January 1, 2009 by classifying the warrants as liabilities measured at fair value with changes in fair value recognized in earnings for each reporting period and recording a cumulative-effect adjustment to the opening balance of retained earnings.
We have calculated the fair value of the warrants at the date of adoption of ASC 815 as well as at March 31, 2010, June 30, 2010 and September 30, 2010, utilizing a Black-Scholes-Merton stock option valuation model. Based on our calculations and assessment of the materiality, we have concluded that our previously filed Annual Report on Form 10-K for the year ended December 31, 2009 as well as our previously filed Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 2010 require restatement.
Extinguishment of Debt
On December 24, 2009, the Company and the remaining six holders holding convertible promissory notes totaling $1,800,000, entered into a note amendment agreement that (i) extended the maturity date of the Notes to June 30, 2011,
(ii) reduced the conversion price of the Notes from $1.00 to $0.80, (iii) reduced the exercise price of warrants to purchase 450,000 shares of common stock from $1.50 to $1.00, (iv) extended the term of the warrants to December 31, 2011, and (v) established a repayment schedule beginning on April 30, 2010 with the entire remaining balance payable on June 30, 2011. In addition, the Company agreed to issue the holders an aggregate of 450,000 shares of common stock in consideration for entering into the amendment. The Company timely disclosed the note modifications in its Form 10-K for the year ended December 31, 2009.
The Company has performed an assessment of this transaction in accordance with ASC 470-50 "Modification and Extinguishments" and ASC 405-20 "Extinguishment of Liabilities," and determined that by applying the 10% cash flow test the original and new convertible notes were substantially different and that as a result the modification of the convertible promissory notes should have been treated as an extinguishment of debt. As a result, the Company has determined that its previously filed Annual Report on Form 10-K for the year ended December 31, 2009 as well as our previously filed Quarterly Reports on Form 10-Q for the quarters ended March 31, June 30 and September 30, 2010 require restatement.
Expected impact of the restatement
The estimated necessary adjustments to the Company's consolidated balance sheets and statements of operations are summarized in the tables below. The Company is still in the process of completing its review of the restated financial statements, and, therefore, the estimated adjustments described below are preliminary. While the Company expects to report the estimated adjustments described below, there can be no assurance that the final adjustments that are made as part of the restatement will not differ materially from the estimated adjustments.
Fiscal Year 2009 Q1 2010 Q2 2010 Q3 2010
As Reported Adjustments As Restated As Reported Adjustments As Restated As Reported Adjustments As Restated As Reported Adjustments As Restated
Total Liabilities $ 3,030,341 $ 864,097 $ 3,894,438 $ 3,087,491 $ 780,884 $ 3,868,375 $ 3,241,536 $ 618,877 $ 3,860,413 $ 3,345,925 $ 563,155 $ 3,909,080
Additional paid in capital $ 10,315,847 $ (536,285 ) $ 9,779,562 $ 10,388,755 $ (536,285 ) $ 9,852,470 $ 10,896,366 $ (536,285 ) $ 10,360,081 $ 12,642,737 $ (536,285 ) $ 12,106,452
Unappropriated retained
earnings $ 2,189,692 $ (327,812 ) $ 1,861,880 $ 3,053,581 $ (244,599 ) $ 2,808,982 $ 4,585,883 $ (82,592 ) $ 4,503,291 $ 6,741,813 $ (26,870 ) $ 6,714,943
Net income $ 3,042,860 $ (619,320 ) $ 2,423,540 $ 892,094 $ 83,213 $ 975,307 $ 2,499,927 $ 254,220 $ 2,754,147 $ 4,775,256 $ 300,941 $ 5,076,197
Basic net income per common
share $ 0.15 $ (0.03 ) $ 0.12 $ 0.04 - $ 0.04 $ 0.10 $ 0.01 $ 0.11 $ 0.19 $ 0.01 $ 0.20
In accordance with Section 404 of the Sarbanes-Oxley Act of 2002, the Company's management has been assessing the effectiveness of the Company's internal controls over financial reporting and disclosure controls. Based on this assessment, the Company expects to report a material weakness in the Company's internal controls over financial reporting, and, therefore, concludes that internal controls over financial reporting as of December 31, 2009 are not effective. Although the assessment is not yet complete, management expects to recommend to the audit committee of the Company's board of directors certain remedial actions that include (i) the addition of more experienced accounting staff with US Certified Public Accountant certificate at the Company's enterprise; (ii) a formal training program for all accounting and finance personnel, so that they remain current with accounting rules, regulations and trends, (iii) a thorough review of the finance and accounting departments, to ensure that the areas of responsibilities are properly matched to the staff competencies and that the lines of communication and processes are as effective as practicable. In accordance with Item 307 of Regulation S-K, the Company's management has reconsidered the adequacy of the Company's previous assertions in its Annual Report on Form 10-K/A for the Fiscal Year Ended December 31, 2009 and Quarterly Reports on Form 10-Q/A for the Quarterly Periods Ended March 31, June 30, and September 30, 2010. The Company will amend the disclosures in the related filings accordingly.
The audit committee and management have discussed the matters disclosed in this current report on Form 8-K with Baker Tilly Hong Kong, the Company's independent registered public accounting firm. The Company is working diligently to complete the restatement of its financial statements. We will file restated financial statements for the fiscal year ended December 31, 2009 and the three fiscal quarters of 2010 on or before April 15, 2011.
Statements in this report, including but not limited to those relating to the Company's or management's intentions, beliefs, expectations, hopes, projections, assessment of risks, estimations, plans or predictions for the future, including the impact of the restatement, timing of filings with the SEC and other statements that are not historical facts are forward-looking statements that are based on current expectations. Although the Company believes that its expectations are based on reasonable assumptions, it can give no assurance that these expectations will prove correct. Important factors that could cause actual results to differ materially from those in the forward-looking statements include delays and uncertainties that may be encountered in connection with the restatement, final audits and reviews by the Company and its auditors, and other risks described in the Company's annual report on Form 10-K for the year ended December 31, 2009 and its other filings with the SEC. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. Investors should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement and the Company undertakes no duty to update any forward-looking statement.
Without any buyer support our sellar is back & willing to sell @ 2xeps.
Seems sad to see hfgb within a nickle of its 52 week low while earnings are at a all time high.
But thats what happens when a company is willing to put put cheap shares in the hands of Chinese merchants who would rather have cash.
I am glad the SEC only found this minor infraction which had no effect on cashflow.
So reported eps for 2009 were adjusted down to $0.12 from the previous reported $0.15 due to warrants not being expense properly.
HFGB is a play on $20 million of additional capacity coming on line to service a growing backlog.
I am glad to see they are taking this time to get their books in order.
This may turn out to be a buying opportunity although I will not be buying anymore Chinese stocks until the market values them fairly.
HFGB.. $0.56
Sold my small position today.. One less Chinese company to own that restates earnings.. hank
HFGB.. $0.53..
I bought a few at $0.5728 (8888) and it proved my new theroy correct.. You can't trust or believe anything that is in the form of news from any company that is Chinese.. They have different morals and rules of ownership in public companies than what we have.. But i thought that HFGB was above that.. Think again..!!!!! hank
I'd also like to pick up more shares but I'm going to have to wait until whoever is dumping shares finishes up. I think the long term growth is certainly there and after earnings this quarter we should see a nice pop, as long as the seller is done before then.
Hank the current pps is down to $0.525-0.025 or 4.55% on fairly strong volume with only 5,650 shares bought at the ask while 47,300 were sold at or near the bid showing us one or more of those Chinese merchants is still unloading shares at lower & lower prices.
At the current pace we could get down around $0.47 before demand increases enough to meet supply.
Any thoughts,anyone. I for one am in no hurry to average down my current $0.60+ position even though I know $20M in increased production is on the way to meet the growing backlog.
HFGB..$0.5728..
Added yesterday ,, 8888 @$0.5728.. It may not be the bottom but it seems to be enough discount from where I sold to start a position.. hank
The only news I am aware of I have already stated we have a sellar out there willing to sell at or below the bid to unload shares.
Look at the volume today & almost 90% is sellar volume @ the bid.
I don't know who this sellar is but I bet it's one of the Chinese that got paid with stock that wanted cash instead.
I think would be buyers know this & are waiting for a even lower pps to enter there bids.
someone some news regarding hfgb ?
still a decline of the share price
Crystal research came out with another report on hfgb however nothing new was in the report.
Looks like we have a sellar willing to sell under the bid.
With the bid @$0.68 & ask@$0.71 this sellar was willing to take $0.65 in order to sell a 24,345 share block of lightly traded hfgb stock today.
This would seem to be one of the many Chinese merchants that got shares as payment instead of cash from hfgb.
Crystal paid research report
http://www.crystalequityresearch.com/docs/HFGBInitialFocusReport-12-20-10.pdf
To all my friends here...what does 2011 and TDGI hold in store for us?
Pay off school loans - thousands
Pay off remaining bills - many thousand more
Ability to retire ---- PRICELESS!!!!!!
Go TDGI!!!
May you and yours have a very Merry Christmas and a safe and prosporous New Year!
Traderfan,
This seems to be something we both agree on.
May I wish you & you'res & everyone a merry xmas
Oh it's pretty obvious why the stock price didn't really react to the upped guidance. It's all about this stupid cheap dilution a few weeks back. Otheerwise we would be much higher.
I'd like to see more cheep shares come available so I can load up as well. I agree with you pappy that hopefully we have another week to get them. January may be a different story but who knows?
If someone can remember off the top of their head, how much dilution are we expecting as of the last 10Q. I seem to remember that they planned on issuing some more shares and perhaps that is why since that Q the pps has stumbled a bit.
Didnt bother me, I'm in this for the long term. And I think I remember that the additional funds were necessary for further expansion which in the long run should provide us with better earnings, even with the dilution factored in. All this is off of memory, so dont crucify me if I got some things wrong... not planning on re-reading the Q, I'm comfortable with where this is heading and would like to average my shares down here.
malc.
If it was these guys you may get another chance to buy cheap shares.
As no U.S. investors would seem to have a reason to sell at $0.59 that I am aware of.
In early Nov. Xi'an Runfeng Investment,Ltd. was issued 861,606 shares instead of cash for the $516,964 owed as of Oct. 30 2010.
HFGB has payed back debt with shares in the past & it seems vendors & some of these Chinese Investment companies prefer cash with little regard to the pps they receive.
As cashflow starts to catch up with the amount of money needed to finance growth I hope hfgb stops this practice.
But in the meantime investors with a longerterm outlook may get a chance to buy some more cheap shares.
I have noticed since hfgb upped guidance that the pps has not reacted very positive.
Thus if my opinion proves correct Xi'an may have already sold some shares before today so its hard to say how many shares still overhang the market.
With U.S. markets in tax-loss selling season these Chinese seem to have no sense about timing stock sells.
Since I still believe the pps of hfgb deserves to be North not South of $1.00 I may join you in buying some cheap shares however we may have until yearend to pick a buying pps to add shares if I am correct.
This old fart is often wrong so don't read to much into the thoughts I am putting out there.
Got some 0.59s! Thanks to whomever sold at that price!!
load the boat full
pappy,
put me in the "boat loader" group, I can't believe all chinese small caps are fraud, but it's JMO!
Is every small-cap Chinese stock a fraud?
It seems the market thinks so.
Lets take a look at hfgb.
In spite showing eps accelerating every qtr in 2010 from $0.04 to $0.06 to $0.08 if my memory serves me right.
And having a current B.V of $0.84 & Increasing 2010 earnings guidance by $1M after reporting its 3rd qtr numbers I see a ticker pps of $0.65 today.
This stock has been growing quite well in past years & after reporting 2009 numbers the pps reached $1.40.
Todays pps is down over 50% from that 52 week high.
Its either time to quit investing in China stocks or time to load the boat but I am quite confused by looking at the market action in small-cap China stocks as to which one to do.
.68/.69 go ahead and take er down to .50's again. I'll buy em :)
pappy, nice, thanks for sharing!!!
I have a nice size position in hfgb uta nuin wkbt ckgt which I have designated as my 5 amigos for 2011.
I consider all as both value & growth plays.
I have other stocks that are big revenue growers that are not quite as cheap so they don't qualify for my list.
I also am 50% cash simply because the trend is not my freind in this space.
However if & when the sequential growth continues on a qtrly basis while the pps stagnates I will continue to add to my amigos.
At least you know no my game plan going into 2011.
As for 2010 I have completed taking my profits & may yet take a tax loss or two as I weed out some non-amigos like jada a value play without the growth & going nowhere fast.
my powder sack looks about like my stocking...empty! I wish I had more, I would buy more, great value, IMO!
Sure wish I had a stash of cash to get some more.
Anybody else think the shares for the building is a great deal?
No debt. No interest on debt. And just MAYBE the recipients of the shares gave HFGB a discount on the construction (it was estimated to cost $5-8 Million originally) and they realize when construction is complete and HFGB is generating the extra $20 million in revenue and related income their shares they got for the "price" of .60 will be worth multiples of that next year??
News for 'HFGB' - (Huifeng Bio-Pharmaceutical Reported Third-Quarter 2010 Financial Results and Raises its 2010 Year-End Guidance)
XI'AN, China, Nov. 16, 2010 /PRNewswire via COMTEX/ -- Huifeng
Bio-Pharmaceutical Technology, Inc. (OTC Bulletin Board: HFGB), specializing in
developing and producing botanical extracts and other raw materials for
pharmaceuticals and food additives today announced its financial results for its
third-quarter 2010.
Third Quarter 2010 Highlights
Net Revenues grew 66.2% year over year to $7,422,334
Gross profit was $3,906,538, up 165.5% from the third quarter of 2009 with gross
margin of 52.6%, significantly increased 19.7% from 32.9% for the third quarter
of 2009.
Net income was $2,155,930, an increase of $1,153,925 or 115% from the third
quarter 2009, and earnings per diluted share were $0.08 based on 25.9 million
shares.
Company increases full-year guidance for net income to $5.5-$6 million from
previous guidance of $4.5-$5 million.
Third Quarter 2010 Results
Q3 2010 Q3 2009 CHANGE
Revenue $7.4 million $4.4 million +66.2%
Gross profit $3.9 million $1.4 million +165.5%
Net Income $2.1 million $1.1 million +115%
EPS (Diluted)* $0.08 $0.05 +60%
* Weighted average shares outstanding (diluted) for Q3 2010 was 25,908,427 and for Q3 2009 was 22,354,212.
"We are pleased to announce record financial results and robust growth in
both our revenue and net income," Mr. Jing'an Wang, the Company's CEO,
commented. "Net Revenues grew 66.2% year over year, as we experienced
increased sales in our Diosmin and Rutin product lines. Our gross margins for
the third-quarter 2010 increased 165%, which is a result of higher selling
prices and further economies of scale. This strong performance and growth has
led us to raise our full-year net income guidance for 2010."
"We are also very excited about the construction of our new 500 ton Diosmin
plant, which we expect will be completed in 2011 and the final stages of the
European COS audit and certification process. We believe that with European COS
certification and our new 500 ton COS Standard Diosmin, the Company is
positioned to be the leading producer of Diosmin for years to come." Mr.
Wang continued.
For the Three Months EndedSeptember 30, 2010and 2009
Revenues for the quarter ended September 30, 2010 were $7,422,334, an increase
of $2,956,564, or 66.2%, from $4,465,770 for the same quarter in 2009. Our
increase in sales revenues for the third quarter of 2010 was mainly due to the
increase in our sales of pharmaceutical raw-material and pharmaceutical
intermediates, which include our products of Rutin, Troxerutin and Quercetin. An
analysis of our results in sales of our products is as follows:
For the quarter ended Increase
September 30,
------------------------
Product 2010 2009
---------------------------- ------------- --------------
Pharmaceutical intermediates $ 2,305,410 $ 1,104,279 $ 1,201,131
Pharmaceutical raw-material 4,417,384 2,696,843 1,720,541
Plant extractive and others 699,540 664,648 34,892
--------- --------- ---------
TOTAL $ 7,422,334 $ 4,465,770 $ 2,956,564
Cost of sales for the quarter ended September 30, 2010 was $3,515,796, an
increase of$521,191, or 17.4%, from $2,994,605 for the quarter ended September
30, 2009. Compared to the quarter ended September 30, 2009, the increase in cost
of sales for the third quarter of 2010 was caused by an increase in sales of our
pharmaceutical intermediates. An analysis of our results in cost of sales of our
products is as follows:
For the quarter ended Increase
September 30,
------------------------
Product 2010 2009
---------------------------- ------------- -------------
Pharmaceutical intermediates $ 1,108,012 $ 697,933 $ 410,079
Pharmaceutical raw-material 1,972,627 1,863,999 108,628
Plant extractive and others 435,157 432,673 2,484
--------- --------- -------
TOTAL $ 3,515,796 $ 2,994,605 $ 521,191
Our gross margin for the quarter ended September 30, 2010 was $3,906,538, an
increase of $2,435,373, or 165%, from $1,471,165 for the same quarter in 2009 as
a result of the increase in our products sold and a significant increase in the
selling price of our products, mainly due to the sales increase of
pharmaceutical raw-material and pharmaceutical intermediates.
Our gross margin as a percentage of revenues for 2010 increased 19.6% from 33%
for the third quarter of 2009 to 52.6% in the same quarter in 2010, mainly
because of a significant increase in the selling price of our products.
For the Nine Months EndedSeptember 30, 2010and 2009
Revenues for the nine months ended September 30, 2010 were $18,273,172, an
increase of $9,389,982, or 106%, from $8,883,190 for the same period in 2009.
Our increase in revenues for the nine months ended September 30, 2010 was mainly
due to the increase in our sales of pharmaceutical raw-material and
pharmaceutical intermediates, which include our products of Rutin,
Troxerutin,L-Rhamnose, Quercetin and Diosmin. An analysis of our results in
sales of our products is as follows:
Nine Months ended Increase
September 30,
---------------------------
Product 2010 2009
---------------------------- ---------------- ---------------
Pharmaceutical intermediates $ 4,611,947 $ 2,002,165 $ 2,609,782
Pharmaceutical raw-material 11,894,424 5,445,430 6,448,994
Plant extractive and others 1,766,801 1,435,595 331,206
---------- --------- ---------
TOTAL $ 18,273,172 $ 8,883,190 $ 9,389,982
Cost of sales for the nine months ended September 30, 2010 were $10,276,838, an
increase of $4,316,373, or 72.4%, from $5,960,465 for the nine months ended
September 30, 2009.The increase in the cost of sales for the nine months ended
September 30, 2010 was caused by an increase in sales of pharmaceutical
intermediates and pharmaceutical raw-materials, which include our products
L-Rhamnose, Quercetin and Diosmin. An analysis of our results in cost of sales
of our products is as follows:
Nine Months ended Increase
September 30,
------------------------
Product 2010 2009
---------------------------- ------------ ------------
Pharmaceutical intermediates $ 2,597,664 $ 1,247,493 $ 1,350,171
Pharmaceutical raw-material 6,830,394 3,864,665 2,965,729
Plant extractive and others 848,780 848,307 473
TOTAL $ 10,276,838 $ 5,960,465 $ 4,316,373
The gross profit margin for the nine months ended September 30, 2010 was
$7,996,334, an increase of $5,073,609 or 173.6% from $2,922,725 for the nine
months ended September 30, 2009 as a result of an increase in sales of our
products and a significant increase in the selling price of our products, mainly
due to an increase in sales of our pharmaceutical raw-material and
pharmaceutical intermediates.
Our gross margin as a percentage of sales for the nine months ended September
30, 2010 increased by 10.8% to 43.8% from 33% in the same period in 2009. The
increase in gross margin was mainly due to the increasein the selling price of
raw-materials.
Financial condition
Cash and cash equivalents as ofSeptember 30, 2010 were $2,088,599.
In the nine months ended September 30, 2010, cash provided by operating
activities was $2,931,146, compared to cash used in operating activities of
$169,785 for the nine months ended September 30, 2009, mainly due to the
significant increase in our net income from continuing operations. In the nine
months ended September 30, 2010, cash used in investing activities was $545,997
compared to cash used in investing activities of $194,238 for the same period in
2009, mainly as a result of the purchase of new production machinery and
equipment. Cash used in financing activities in the nine months ended September
30, 2010 was $854,937, compared to cash provided by financing activities of
$263,062 in the same period in 2009, primarily as the result of the repayment of
a bank loan and the repayment of amounts owed to six Note holders.
The Company Increases its 2010 Guidance
The Company reaffirms its expectation that it will earn approximately $25
millionin revenues for the year endedDecember 31, 2010, however, the Company now
expects to earn net income for the year ended December 31, 2010 of approximately
$5.5-$6 million, an increase of $1 million from its previous guidance of
approximately $4.5-$5 million. The Company expects continued revenue growth in
the last quarter of 2010 as it enters its most profitable selling period.
About Huifeng Bio-Pharmaceutical Technology, Inc.
Huifeng Bio-Pharmaceutical Technology, Inc., located inXi'an,People's Republic
of China, develops and produces plant extracts and pharmaceutical raw materials
for use in pharmaceutical, nutraceutical and food production. It is the leading
Chinese producer of rutin and related plant-derived chemicals in a class called
flavonoids, with medicinal and other beneficial properties. Founded in 2002,
Huifeng uses proprietary patented processes to extract rutin more efficiently
than traditional extraction techniques. The Company is diversifying its product
lines through internal development, acquisition and cooperation with scientific
research organizations. More information can be found on the Company's web site
at:http://www.hfgb.cn/
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Huifeng Bio-Pharmaceutical Technology Inc. (“Huifeng”) develops, produces and sells plant extracts, pharmaceuticals and pharmaceutical raw materials in mainland China and internationally. Founded in 2000, the Company holds the patent for a highly efficient process to extract rutin, one of a class of plant-derived chemicals called flavonoids, with anti-inflammatory, antioxidant and anticoagulant properties. Other flavonoid or flavonoid-derived Huifeng products include troxerutin, quercetin, ginkgo biloba, diosmin and l-rhamnose. Manufacturers buy these products for use as the building blocks of drugs, dietary supplements and as additives in functional foods and beverages.
The Company’s production facilities are ISO9001:2000 certified, a necessary international qualification for export sales. The Company also holds a Chinese Good Manufacturing Practices (GMP) certification that allows it to distribute domestically. Products manufactured under GMP conditions have higher quality, consistency and potency assurances. Huifeng’s participation in PRC government biopharmaceutical industry initiatives entitles them to obtain funding to research new products.
Huifeng’s production efficiency has allowed them to become the dominant Chinese producer and exporter of rutin and to develop related products. In 2005, internal R&D efforts produced efficient methods of extracting diosmin and L-rhamnose, and they have recently expanded production facilities to manufacture these new products.
Huifeng has a diverse customer base, including distributors and manufacturers in China, Japan, Hong Kong, Russia, India, Germany, and the U.S. In the first 9 months of 2006, approximately 60% of products were sold in China and 40% were exported.
Huifeng BioPharmaceutical Technology, Inc.
FL16B, Ruixin Bldg, No.25 Gaoxin Rd., Xi'an 710075 China.
Press Release Source: Huifeng Bio-Pharmaceutical Technology, Inc. On Monday August 23, 2010, 7:30 am EDT
XI'AN, China, Aug. 23 /PRNewswire-Asia-FirstCall/ -- Huifeng Bio-Pharmaceutical Technology, Inc. (OTC Bulletin Board:HFGB.ob -News), specializing in developing and producing botanical extracts and other raw materials for pharmaceuticals and food additives today reiterated its financial results for its second quarter ended June 30, 2010.
Second Quarter 2010 Highlights
-- Revenue was $6,698,952, up 116.7% from the same quarter of 2009.
-- Gross profit was $2,467,064, up 109.5% from the second quarter of 2009
with gross margin of 36.8%, slightly decreased 1.3% from 38.1% for the
second quarter of 2009.
-- Net income was $1,532,302, an increase of $729,108 or 90.8% from the
second quarter 2009, and earnings per diluted share were $0.06 based on
25.4 million shares.
Second Quarter 2010 Results
Q2 2010 Q2 2009 CHANGE
Revenue $6.7 million $3.1 million +116.7%
Gross profit $2.5 million $1.2 million +109.5%
Net Income $1.5 million $0.8 million +90.8%
EPS (Diluted)* $0.06 $0.04 +50%
* Weighted average shares outstanding for Q2 2010 was 25,408,941 and for
Q2 2009 was 20,466,169."We are pleased to report record revenue and operating income in the quarter," Mr. Jing'an Wang, the Company's CEO, commented. "The large increase in profitability and top line growth can be attributed to the increase in our sales of pharmaceutical raw-material and pharmaceutical intermediates. We have seen increased orders of both Rutin series products and Diosmin. We plan on focusing to fulfill the entire demand in the coming year."
For the Three Months Ended June 30, 2010 and 2009
Revenues for the quarter ended June 30, 2010 were $6,698,952, an increase of $3,607,427, or 116.7%, from$3,091,525 for the same quarter in 2009. Our increase in sales revenues for the second quarter of 2010 was mainly due to the increase in our sales of pharmaceutical raw-material and pharmaceutical intermediates, which include our products of Rutin, Troxerutin, Quercetin and Diosmin. An analysis of our results in sales of our products is as follows:
For the quarter ended June 30
Product 2010 2009 Increase
Pharmaceutical intermediates $1,477,178 $765,929 $711,249
Pharmaceutical raw-material $4,712,016 $1,907,060 $2,804,956
Plant Extractive and others $509,758 $418,536 $91,222
TOTAL $6,698,952 $3,091,525 $3,607,427Our gross profit for the quarter ended June 30, 2010 was $2,467,064, an increase of $1,289,559, or 109.5%, from $1,177,505 for the same quarter in 2009 as a result of the increase in our products sold, mainly due to the sales increase of pharmaceutical raw-material.
Our gross margin as a percentage of revenues for 2010 slightly decreased 1.3% from 38.1% for the second quarter of 2009 to 36.8% in the same quarter in 2009, due to the slight increase in raw materials' price.
Net income for the quarter was $1,532,302, an increase of $729,108 or 90.8% from the second quarter of 2009, and earnings per diluted share were $0.06 based on 25.4 million shares.
For the Six Months Ended June 30, 2010 and 2009
Revenues for the six months ended June 30, 2010 were $10,850,838, an increase of $6,433,418, or 145.6%, from $4,417,420 for the same period in 2009. Our increase in revenues for the six months ended June 30, 2010was mainly due to the increase in our sales of pharmaceutical raw-material and pharmaceutical intermediates, which include our products of Rutin, L-Rhamnose, Quercetin and Diosmin. An analysis of our results in sales of our products is as follows:
Six months ended June 30
Increase/
Product 2010 2009 (Decrease)
Pharmaceutical intermediates $2,309,996 $897,790 $1,412,206
Pharmaceutical raw-material $7,889,535 $2,635,525 $5,254,010
Plant Extractive and others $651,307 $884,105 $(232,798)
TOTAL $10,850,838 $4,417,420 $6,433,418The gross profit for the six months ended June 30, 2010 was $4,089,796, an increase of $2,638,236 or 181% from $1,451,560 for the six months period ended June 30, 2009 as a result of the increase in our products sold.
Our gross margin as a percentage of revenues for the six months ended June 30, 2010 was slightly increased from 32.9% to 37.7%, which compared to the same period in 2009. The increase in gross margin was mainly due to the increase of the selling price of raw-materials during the quarter ended June 30, 2010.
Net income for the first half of fiscal year 2010 was $2,396,191, compared to $410,557 in the prior year's corresponding period, a 483.6% increase year over year, and earning per diluted shares were $0.10 based on 25.1 million shares.
Financial condition
As of June 20, 2010, the Company had $1,661,815 in cash, increased from $85,105 in the prior year's corresponding period; working capital was $13,321,969. Cash provided by operating activities were $1,643,604, compared to cash used in operating activities of $106,697 for the six months ended June 30, 2009, mainly due to a decrease in accounts receivable and inventories of $171,204 and $1,173,837, respectively, as well as an increase due to a stockholder of Xi'an Runfeng Investment Ltd. of $497,117 and increase in our net income from continuing operations.
The Company reaffirms its 2010 Guidance
For the calendar year ended December 31, 2010, Huifeng reaffirms its $20.0-$25.0 million in revenue and $4.5-$5.0 in net income guidance respectively. The Company expects revenue and earnings growth to continue through the second half of the year, as it enters its most profitable selling period during the third and fourth quarter harvest and squeezing seasons.
About Huifeng Bio-Pharmaceutical Technology, Inc.
Huifeng Bio-Pharmaceutical Technology, Inc., located in Xi'an, People's Republic of China, develops and produces plant extracts and pharmaceutical raw materials for use in pharmaceutical, nutraceutical and food production. It is the leading Chinese producer of rutin and related plant-derived chemicals in a class called flavonoids, with medicinal and other beneficial properties. Founded in 2002, Huifeng uses proprietary patented processes to extract rutin more efficiently than traditional extraction techniques. The Company is diversifying its product lines through internal development, acquisition and cooperation with scientific research organizations. More information can be found on the Company's web site at: http://www.hfgb.cn/
Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the "safe-harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that could cause the actual results of the Company to differ materially from the results expressed or implied by such statements, including changes from anticipated levels of sales, future national or regional economic and competitive conditions, changes in relationships with customers, access to capital, difficulties in developing and marketing new products, marketing existing products, customer acceptance of existing and new products, and other factors disclosed in the Company's Annual Report on Form 10K for the year ended Dec. 31, 2009 and all of the Company's subsequent Quarterly Reports on Form 10Q, especially in the "Risk Factors" sections of these reports. Accordingly, although the Company believes that the expectations reflected in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. The Company has no obligation to update the forward-looking information contained in this press release.
For more information, please contact:
Investor Relations:
Capital Group Communications, Inc.
Mr. Kevin Fickle
Tel: +1-925-330-8315
Email: Kevin@capitalgc.com
Company Contact:
Huifeng Bio-Pharmaceutical Technology, Inc.
Mr. Steven Tong, IR Director
Tel: +86-135-7211-8351
Email: Steven@xahuifeng.com
Kevin M Fickle
+415 644 5253 (Direct)
+415 332 7201 (Fax)
+925 330 8315 (Mobile)
kevin@nuwagroup.com
If you would like to speak to our sales staff, please email sales@xahuifeng.com or
fax our headquarters in Xi’an, China at 0086-29-88250444.
adam@adam-friedman.com or call 212-981-2529-x 18
Website: http://www.hfgb.cn
Company Officers:
Jing An Wang, CEO
Sanding Tao, CFO
Transfer Agent
Interwest Transfer Co., Inc.,
1981 E 4800 S.
Suite 100
Salt Lake City, UT 84117
Current Share Structure: updated as of March 19, 2008
Estimated Market Cap: $13,849,625.75
Outstanding Shares: 18,466,169
Number of Shareholders: 767
Approx Float: 2,100,000
Products:
Pharm.Raw Materials
Rutin Troxerutin Quercetin L-Rhamnone
Active Pharm.Ingredients
Silymarin Hesperidin Diosmin Matrine
Oxymatrine phytosterol Stigmasterol Pueraria
Reseveratrol Naringin Baicalin Berberine Hydrochlorrde.
10-Deacetyl Baccatin ? Paclitaxol
Plant Extracts
Epimedium Extract Ginkgo Biloba Leaf P.E Grape Seed.P.E Pueraria Lobata Extract
Magnolia P.E. Hawthorn Berry P.E. Bitter Melon P.E. Red Clover P.E.
chlorogenic acid Gynostema Extract Fructucs Aurantii P.E. Rhodiola Rosea P.E
Green Tea P.E.
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