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Joe, you need to re-read those filings again bud. They are NOT in at $4.40, that's the unit price of the convertible Series A shares. They are convertible into common stock at the value of $4.40.
Example: If the closing bid price is $0.75 at time of conversion, they receive 5.86 common shares for each 1 share of Series A.
$4.40/$0.75 = 5.86
Share Purchase Agreement
http://www.sec.gov/Archives/edgar/data/1467746/000121390010001707/f8k42810ex10i_ecobuild.htm
Designation of Series A
http://www.sec.gov/Archives/edgar/data/1467746/000121390010001707/f8k42810ex4i_ecobuild.htm
According to their latest 10Q, they have 1,995,475 Series A Preferred left.
http://www.sec.gov/Archives/edgar/data/1467746/000114420412045403/v319116_10q.htm
You are welcome to contact the company and ask them if my analysis of their filings is correct or not.
Your very large shareholders here are ALL in at $4.40 and they ALL still own ALL of their shares. I've spoken with these guys and they're willing to wait it out for years if need be.
Nealio, I'll pretend you didn't just ask me that question. LOL. Of course they have an auditor or they wouldn't be a fully reporting company. Check the 10-K ......
"Do they have an auditor?"
Do they have an auditor? I didn't see one listed on the quarterly report.
So earnings around the 15th this month? Any expectations?
Thanks,
Nealio
The same reason many other China stocks are in the gutter .... a lack of trust. No problem .... DEYU has some very large shareholders in at $4.40 and I've spoken with them all .... they won't sell a share below that price and they'll wait years if they have to. Only other sellers are tiny players, maybe holding consulting shares here and there. DEYU's future numbers will be huge, so buy when not a soul is interested and sell when the rush comes .... and it'll come .....
"I guess the main question is why the stock is below 1.00? With their EPS and revenue what do you think the share price should be?"
I guess the main question is why the stock is below 1.00? With their EPS and revenue what do you think the share price should be?
I am right ...... I didn't have returns of 2,880% in 2009 because I was stupid ....
"Hope you are right"
Hope you are right until I see some form of bid support can't get really excited...
But, like the story and growth so holding and may add down here.
I flew to China to visit DEYU operations at all of their facilities. Very very impressive and legit ? Absolutely. They have so much room for expansion it would make your head spin. Sure, the stock sucks, but those who buy down here and hold will some day look back and laugh .......
"Anyone following this stock. Really like this one..."
WTF is noncontrolling interest?
This looks a lot like CNOA!
Q2 earnings when compared to last year lost ground but revenue was higher. 10.9M O/S and only about 3M float. The shares are in strong hands nobody is selling. Maybe someone else has a different take.
Lol nice. This thing should be 2$+ easy....more like 3
Shh! ..keep it to a whisper in here! LOL
*I'm patiently loaded in the $1.23 - $1.65 range and pretty darn happy about it!!!
DEYU
I think it's lack of exposure along with the fact that it's a Chinese company; yes... Hard to trust but the numbers have always impressed me too and the news has always been solid just stays quiet... GL
USASPORTS, you hit the nail on the head, a dividend couple with an uplisting to a senior exchange would see this stock shoot up to a 2 or 3 PE. A dividend would be the first order of business. Nothing speaks louder than cash. Take a look at SIAF - similar numbers but with a dividend
I have been asking the same question. It seems that the general investing public is not aware of the company. I have been following them for a long time and the growth in sales and earnings has been great. I think a stock buyback or dividend would go a long way to get the stock price moving in the right direction.....
maybe the should create a ripoff Wheaties box and put one of their Olympians on it.
OKAY I give-up, why is there little to no volume with this stock? It has over 1/4 of BILLION in sales for the last 12 months. I understand that its a small cap china company but has there been any acusations made by someone regarding shady books?
Do they have a reputable accountant?
\
$0.50 eps last quarter and I'm assuming its going to get better.
Almost everything in their financials tell me to buy buy buy. Cash flow could be better but that's about it. Maybe if they paid a dividend that would get more interest.
DEYU Security Details
Share Structure
Market Value1 $15,110,475 a/o Jul 20, 2012
Shares Outstanding 10,566,766 a/o May 11, 2012
Float Not Available
Looks Good Nice Find
Its definitely one of the more solid china sector stocks IMO
They sure did!..I'm liking this one BIG TIME!!
DEYU
DEYU Form S-1..DJ Registration Effectiveness Orders Issued By The SEC
The following table includes registration statements and post-effective amendments that were declared effective by the Securities and Exchange Commission on the most recently completed business day.
The Securities Act of 1933 requires companies offering securities to file a registration statement with the SEC that discloses material facts for investors. The SEC staff reviews registration statements and declares them "effective" if companies satisfy the disclosure rules.
REGISTRATIONS EFFECTIVE AS OF May 15, 2012
STOCK:
AMERICAN DG ENERGY INC. (ADGE)
File Number: 333-180931
Date of Original Registration: 4/25/2012
Form Type: S-3
Securities Registered: 1,000,000 Shares of Common Stock
Selling Holder: No
Acadia Healthcare Company, Inc. (ACHC)
File Number: 333-181025
Date of Original Registration: 4/30/2012
Form Type: S-3
Securities Registered: 8,261,509 Shares Of Common Stock
Selling Holder: Yes
ANGIE'S LIST, INC. (ANGI)
File Number: 333-181093
Date of Original Registration: 5/1/2012
Form Type: S-1
Securities Registered: $75,000,000 in Shares in Common Shares
Selling Holder: Yes
DEYU AGRICULTURE CORP. (DEYU)
File Number: 333-181149
Date of Original Registration: 4/5/2012
Form Type: S-1
Securities Registered: 250,000 Shares Of Common Stock
Selling Holder: Yes
Guidance Software, Inc. (GUID)
File Number:
Date of Original Registration: 4/20/2012
Form Type: S-3
Securities Registered: 849,553 Shares Of Common Shares
Selling Holder: Yes
MIXED SECURITIES:
First Defiance Financial Corp. (FDEF)
File Number:
Date of Original Registration: 4/24/2012
Form Type: S-3
Securities Registered: 37,000 Fixed Rate Cumulative Perpetual Preferred Shares, Rate Cumulative Perpetual
Preferred Shares, Warrant to Purchase 550,595 Common Shares and 550,595 Common Shares
Selling Holder: Yes
SUMMIT HOTEL PROPERTIES, INC. (INN)
File Number: 333-179828
Date of Original Registration: 3/1/2012
Form Type: S-3
Securities Registered: $500,000,000 in Common Stock, Preferred Stock, Warrants And Units
Selling Holder: No
VICAL INCORPORATED (VICL)
File Number: 333-181157
Date of Original Registration: 5/4/2012
Form Type: S-3
Securities Registered: $150,000,000 in Common Stock, Preferred Stock, Debt Securities And Warrants
Selling Holder: No
Order free Annual Report for American DG Energy, Inc.
Visit http://djnewswires.ar.wilink.com/?link=ADGE or call 1-888-301-0513
Order free Annual Report for Deyu Agriculture Corp.
Visit http://djnewswires.ar.wilink.com/?link=DEYU or call 1-888-301-0513
Order free Annual Report for First Defiance Financial Corp.
Visit http://djnewswires.ar.wilink.com/?link=FDEF or call 1-888-301-0513
Order free Annual Report for Guidance Software, Inc.
Visit http://djnewswires.ar.wilink.com/?link=GUID or call 1-888-301-0513
Order free Annual Report for INNELEC MULTIMEDIA SA
Visit http://djnewswires.ar.wilink.com/?link=INN or call 1-888-301-0513
Order free Annual Report for Vical, Inc.
Visit http://djnewswires.ar.wilink.com/?link=VICL or call 1-888-301-0513
(END) Dow Jones Newswires
May 16, 2012 09:24 ET (13:24 GMT)
Copyright (c) 2012 Dow Jones & Company, Inc.- - 09 24 AM EDT 05-16-12
This is a great EPS play imo...consistent solid growth.
Monster earnings .50 vs. .24 YOY and revenue growth of 71% ......
http://sec.gov/Archives/edgar/data/1467746/000114420412029167/v312208_10q.htm
Internal controls ruled " effective" as well. DEYU = the Diamond Foods of China.
Don't you dare miss out on what's about to happen ......
After I recently wrote a Seeking Alpha article about ADY, the stock soared from $3.60 (day I wrote the article) to $9.30 after they blew away earnings ......
http://seekingalpha.com/article/509241-astrobaby-s-890-growth-sets-feihe-free
Since that time, I've spent hours researching DEYU, a little known, thinly traded fully reporting company that will NOT stay that way for long. Why ? The company recently brought on Amy He as their new CFO and she comes from Deloitte. The best thing about her is that she's a firecracker who's ready to get the stock moving. DEYU happens to be one of the few totally legit Chinese companies whereby they're 110% committed to our markets.
DEYU recently reported EPS of $1.42 in their 10-K for 2011 (link below), experienced monster-type growth and I consider DEYU to be the Diamond Foods of China without the baggage. The stock trades at a $1.40 and thus with a P/E slightly less than 1. One of the largest shareholders is a guy that brought ZAGG public, the company that makes the covers for Apple products, etc. and he hasn't sold a share. I spoke with another shareholder who owns 300K shares and this guy won't be selling for a long time, as he sees a very respectable P/E on down the road.
http://finance.yahoo.com/news/deyu-agriculture-corp-reports-record-130000792.html
On May 4th, the company filed an S-1 and it's very interesting, as there are 250K shares being sold (non-dilutive) at $1.65, most likely to an institution that will help get the word out.
http://www.sec.gov/Archives/edgar/data/1467746/000114420412026219/v311739_s1.htm
If you want to learn more about DEYU, call Kevin Fickle, President of DEYU's IR firm and he can be reached at 925-330-8315 and he's one of the very few (IMO) IR people that actually cares about shareholders. DEYU posts Q1 earnings this Wednesday or Thursday and I know the CC is actually on Thursday. This is a call you won't want to miss. Also, Amy He (CFO) will be making a presentation to a group of portfolio managers early next week. You can go to this room any time you'd like, as it's free. Just go to Paltalk.com, register (it's free like I said), create an alias and then search for the room called "Stock Talk Live" and join us each day. I don't know of anyone in the room that doesn't make excellent returns on their capital.
That's all I have for today.
Up again some yesterday on light volume. Inchin' its way towards 2$... DEYU!
That would be Sweed't you could say lol... my dumb joke for the day... ask has thinned over the past week too... lets see that 2$!!!
Deyu Agriculture Corp. Subsidiary Detian Yu Named One of the Top 10 Grain Processing Enterprises by China Food Industry Association
Deyu Agriculture Corp. (OTCQB: DEYU.PK) (the "Company"), a vertically integrated producer, processor, marketer and distributor of organic and other agricultural products made from corn and grains, announced today that its wholly-owned subsidiary, Detian Yu Biotechnology (Beijing) Co. Ltd., was selected as one of the Top 10 Grain Processing Enterprises in China by the China Food Industry Association at the 15th Chinese Food Forum in Beijing.
"We greatly appreciate the recognition of the China Food Industry Association and we will strive to uphold our accolade by continuing to provide wholesome, delicious grains to our consumers," said Jianming Hao, Chief Executive Officer and Chairman of Deyu.
Detian Yu is engaged in the wholesale and retail distribution of simple processed and deep processed packaged and unpackaged food products and a significant contributor to Deyu's bulk trading division.
Mr. Hao also commented, "For us, a key element of the Forum was the discussion on the 'Guidelines on Social Responsibility of Cereals and Oils Enterprises', which urges companies to ensure product quality and safety, as well as to establish modern, environmentally friendly practices. At Deyu, we will continue to utilize our advanced equipment, technology, and processing techniques, along with ecological farming practices, to provide the highest quality grain products. At the same time, we will also look to take advantage of market opportunities, resource integration, structure adjustments, and alliances to further distinguish ourselves as a leader in China's agricultural sector."
About Deyu Agriculture
Deyu Agriculture Corp. is a vertically integrated producer, processor, marketer and distributor of organic and other agricultural products made from corn and grains operating in Shanxi Province of the People's Republic of China. The Company has access to over 109,000 acres of farmland in Shanxi Province for breeding, cultivating, processing, warehousing and distributing grain and corn products. Deyu has an extensive wholesale network in over 15 provinces and a retail distribution network of approximately 20,000 supermarkets and convenience stores in 29 provinces across China. Deyu's facilities include advanced production lines and modern warehouses with a total production capacity of over 105,000 tons for grain products, storage capacity of over 100,000 tons and annual turnover of 700,000 tons for corn products. The Company's website is located at www.deyuagri.com.
Safe Harbor Statements
This press release contains forward-looking statements made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward looking statements are based upon the current plans, estimates and projections of Deyu's management and are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements. Such statements include, among others, those concerning market and industry segment growth and demand and acceptance of new and existing products; any projections of sales, earnings, revenue, margins or other financial items; any statements of the plans, strategies and objectives of management for future operations; any statements regarding future economic conditions or performance; uncertainties related to conducting business in China, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. Therefore, you should not place undue reliance on these forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: business conditions in China, general economic conditions; geopolitical events and regulatory changes, availability of capital, changes in the agricultural industry, the Company's ability to maintain its competitive position. Additional Information regarding risks can be found in the Company's quarterly and annual reports filed with the U.S. Securities and Exchange Commission at www.sec.gov.
Investor Contact:
Mr. Kevin Fickle, PresidentNUWA Group LLC.Tel: +1-925-330-8315Email: kevin@nuwagroup.com
Company Contact:
Ms. Amy He, Acting Chief Financial OfficerDeyu Agriculture Corp.Tel: +86-10-5224-1802 X389Email: amy@china-deyu.com
Ms. Cynthia Yang, Assistant to Acting CFOTel: +1-646-820-8060Email: deyuintl@gmail.com
SOURCE Deyu Agriculture Corp.
DEYU 8k out with details of recent acq.
http://ih.advfn.com/p.php?pid=nmona&article=52074736
Looking good here $DEYU 1.53x1.55 nice spread
I agree, it was nice to see the spread at 1.56 x 1.65 this am to bad some one bid wracked it.. Regardless though if we can get some names of those major OEM producers that DEYU mentioned in yesterdays news we will take off imo. Judging from the numbers it looks like they have a very wide reach across China, so I'm betting the OEM producers are Well Known
We get up past 2$ and the next 50% should be a breeze... nice movement lately, like to see it get over 1.60 by end of week
really seems like a matter of time...check out the daily from a year ago...this thing has barely traded any stock down here... a few more eyes that see the same thing and we could be to 3$ where it was before we know it. go DEYU
after reviewing the numbers and looking at the level II, company should break out anytime..
$DEYU Revenue Increased 2x
Revenue increased 207.1% year-over-year to $261.6 million.
$DEYU China's gross domestic product (GDP) in the first quarter of 2012 grew a little less than expected, however, with the year-on-year growth rate of 8.1% falling below expectations of 8.3%. In the preceding quarter, GDP had risen consistantly 8.1% year-on-year.
Chinese agriculture undervalued
chinese agriculture undervalued "Most companies trading at 1x earnings or less, while the US average is at least 3x earnings."
I agree Awaken, $DEYU will be a good play through out the course of this year. Its definitely not a quick flip play.
DEYU moving 1.65 new highs 2$ coming!
$DEYU 1.65 at the offer!
DEYU Alerted yesterday!!! Nice NEWS!!!
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DEYU AGRICULTURE CP (ECBI.OB)
Press Release Source: Deyu Agriculture Corp. On Tuesday July 6, 2010, 9:25 am EDT
"Because of their favorable properties, grain and corn-based food is becoming an essential component of the daily diet of many Chinese people. We are increasing our marketing and brand-building efforts in order to position ourselves as a leading supplier of grain and corn products in China. As consumer awareness of the value and benefits of grain and corn continues to expand, we are confident that we will be among the first companies to serve this growing market," said Mr. Jianming Hao, Chief Executive Officer of Deyu Agriculture. "We look forward to working with CCG to communicate information about our business operations and financial performance to investors." "Years of economic growth and improved living standards in China have dramatically changed the dietary components of the Chinese people. With a population that is increasingly conscious of dietary health and nutrition, we believe that grain and corn-based food is set to experience growing demand for many years to come. Deyu Agriculture, with its broad product portfolio and premium-branded grain products, is well positioned to take advantage of this increased demand," said Crocker Coulson, President of CCG Investor Relations. In the three months ended March 31, 2010, Deyu Agriculture generated revenues of $14.4 million, a substantial increase of 110.2% from $6.9 million in the same period in 2009. Net income nearly doubled to $2.6 million from $1.3 million for the same period. In fiscal 2009, revenues were $40.7 million and net income was $7.2 million. Deyu Agriculture has entered into a make-good escrow agreement with investors, whereby approximately 1.9 million shares of the Company's stock are being held as security in the event that the Company does not achieve $11 million in audited net income for the fiscal year 2010 and $15 million in audited net income for the fiscal year 2011.
=====================================
17-May-2010
Quarterly Report
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion and analysis of our financial condition and plan of operations together with our financial statements and related notes appearing elsewhere in this Quarterly Report. Various statements have been made in this Quarterly Report on Form 10-Q that may constitute "forward-looking statements". Forward-looking statements may also be made in Eco Building International's other reports filed with or furnished to the United States Securities and Exchange Commission (the "SEC") and in other documents. In addition, from time to time, Eco Building International through its management may make oral forward-looking statements. Forward-looking statements are subject to risks and uncertainties which could cause actual results to differ materially from such statements. The words "believe," "expect," "anticipate," "optimistic," "intend," "plan," "aim," "will," "may," "should," "could," "would," "likely" and similar expressions are intended to identify forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they are made. Eco Building International undertakes no obligation to update or revise any forward-looking statements.
Overview
On April 27, 2010, we completed the acquisition of City Zone Holdings Limited, an emerging organic and non-organic agricultural products distributor in the Shanxi Province of the Peoples Republic of China engaged in procuring, processing, marketing and distributing various grain and corn products ("City Zone"), by means of a share exchange (the "Share Exchange"). As a result of the Share Exchange, City Zone became a wholly-owned subsidiary of ECBI and ECBI is a holding company. Simultaneously with the acquisition, the Company completed a USD $8,211,165.60 private placement of its securities to accredited investors at $4.40 per unit, with each "Unit" consisting of one share of Series A Convertible Preferred Stock, and a warrant to purchase 0.4 shares of common stock with an exercise price of $5.06 per share.
On May 10, 2010, the Company closed on the second and final round of the private placement offering as disclosed in the Company's Current Report on Form 8-K filed with the Securities and Exchange Commission on May 3, 2010 through the sale of 589,689 Units comprised of 589,689 shares of the Company's Series A Convertible Preferred Stock and 235,882 five year warrants with an exercise price of $5.06 per share, to certain accredited investors for total proceeds of $2,594,606.40 to the Company. The Company raised an aggregate amount of $10,805,705 in the two rounds of offerings.
Our principal office is located at Tower B, Jinshang International Building, 7th Floor, Yinbing West Street, Jinzhong City, Shanxi Province, China. Our main office for international correspondence is located at Unit 106, Tern Centre, Tower II, 251 Queen's Road, Central, Hong Kong, People's Republic of China. Our telephone number is (086) 13828824414. Our common stock is quoted on the OTC Bulletin Board under the trading symbol "ECBI."
Additionally, as a result of the Share Exchange, we changed our fiscal year to December 31.
For a more detailed description of the Share Exchange and related transactions, the information contained in the Current Report on Form 8-k filed on May 3, 2010 is referred to and incorporated herein by reference.
--------------------------------------------------------------------------------
Description of Business
Operating through our wholly-owned subsidiaries, Jinzhong Deyu Agriculture Trading Co. Limited ("Deyu Agriculture"), Jinzhong Yongcheng Agriculture Trading Co. Limited ("Yongcheng"), and Jinzhong Yuliang Agriculture Trading Co. Limited ("Yuliang"), we are an emerging organic and non-organic agricultural products distributor in the Shanxi province of the People's Republic of China engaged in procuring, processing, marketing and distributing various grain and corn products. Deyu Agriculture focuses on processing and distributing grain products. Yongcheng and Yuliang focus on distributing corn and corn byproducts.
? Grain Products -Deyu Agriculture procures and distributes grain products including millet, green beans, soy beans, black rice, and whole wheat flour. Deyu Agriculture acquires unprocessed grains and performs premilinary value-added processes to the grains such as peeling, cleaning, grinding and packaging. The majority of our finished products are then sold directly to supermarkets and grain wholesalers. Deyu Agriculture is the only company in the Shanxi province to have a portion of its products certified as "Organic" by the China Organic Food Certification Center. The certification is effective from December 31, 2009 to December 20, 2010.
? Corn -Yongcheng and Yuliang process and distribute corn and corn byproducts. Yongcheng and Yuliang acquire unprocessed corn and perform preliminary value-added processes such as cleaning, drying, and packaging.
Results of Operation
For The Three Months
Ended March 31,
2010 2009 Change %
Net revenue $ 14,447,282 $ 6,872,918 $ 7,574,364 110 %
Cost of goods sold (10,936,119 ) (5,134,597 ) (5,801,522 ) 113 %
Gross Profit 3,511,163 1,738,321 1,772,842 102 %
Selling expenses (621,714 ) (338,799 ) (282,915 ) 84 %
General and administrative expenses (261,911 ) (85,126 ) (176,784 ) 208 %
Total Operating Expense (883,625 ) (423,925 ) (459,700 ) 108 %
Operating income 2,627,538 1,314,396 1,313,142 100 %
Interest income 912 293 619 211 %
Interest expense (61,537 ) (18,972 ) (42,565 ) 224 %
Total Other Expense (60,625 ) (18,679 ) (41,946 ) 225 %
Income before income taxes 2,566,913 1,295,717 1,271,196 98 %
Provision for income taxes - - -
Net income $ 2,566,913 $ 1,295,717 1,271,196 98 %
Net Revenue: Our sales for the quarter ended March 31, 2010 were $14,447,282, compared to sales of $6,872,918 for the quarter ended March 31, 2009, an increase of 110%.
Cost of Goods Sold: Cost of goods sold was $10,936,119 for the quarter ended March 31, 2010, compared to cost of sales of $5,134,597 for the quarter ended March 31, 2009, an increase of 113%.
Gross Profit: Gross profits for the quarter ended March 31, 2010 was $3,511,163 compared to gross profits of $1,738,321 for the comparable period in 2009, an increase of 102%.
Operating Expenses: Operating expenses, including selling expenses and general and administrative expenses were $883,625 for the quarter ended March 31, 2010 as compared to $423,925 for the comparable period in 2009, an increase of $459,700, or 108%.
--------------------------------------------------------------------------------
Interest Expense: Interest expense for the quarter ended March 31, 2010 was $61,537 compared to interest expense of $18,972 for the comparable period in 2009, an increase of 42,565, or 224%.
Net Income: Net Income for the quarter ended March 31, 2010 was $2,566,913 compared to $1,295,717 for the quarter ended March 31, 2009, an increase of $1,271,196, or 98%.
Liquidity and Capital Resources
During the first quarter ended March 31, 2010, the Company had a net decrease in cash of $2,286,981 as compared to a net increase of $578,058 for the first quarter ended March 31, 2009. The Company's principal sources and uses of funds were as follows:
? Cash used in operating activities. The Company used $3,688,376 in cash for operating activities for the first quarter ended March 31, 2010, as compared to $6,437,147 in the first quarter ended March 31, 2009. The decrease in cash used for operating activities is primarily attributed to decrease in accounts receivable while net income increased from $1,295,717 for the quarter ended March 31, 2009 to $2,566,912 for the current quarter.
? Cash used in investing activities. The Company used $935,339 in cash for investing activities for the first quarter ended March 31, 2010, as compared to $350,148 in the first quarter ended March 31, 2009. The increase in cash used for operating activities is primarily attributed to increase in purchase of machinery and equipment during the current quarter.
? Cash provided by financing activities. The Company generated $2,337,131 from financing activities for the first quarter ended March 31, 2010, as compared to $7,365,589 in the first quarter ended March 31, 2009. All such financing activity generation was as a result of net proceeds from short-term borrowings from banks and related parties.
There was no significant impact on the Company's operations as a result of inflation for the first quarter ended March 31, 2010.
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as "special purpose entities" (SPEs).
Critical Accounting Policies
Use of estimates
The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management makes its estimates based on historical experience and various other assumptions and information that are available and believed to be reasonable at the time the estimates are made. Therefore, actual results could differ from those estimates under different assumptions and conditions.
--------------------------------------------------------------------------------
Long-lived assets
The Company applies the provisions of FASB ASC Topic 360 (ASC 360), "Property, Plant, and Equipment" which addresses financial accounting and reporting for the impairment or disposal of long-lived assets. The Company periodically evaluates the carrying value of long-lived assets to be held and used in accordance with ASC 360, at least on an annual basis. ASC 360 requires the impairment losses to be recorded on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets' carrying amounts. In that event, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the long-lived assets. Loss on long-lived assets to be disposed of is determined in a similar manner, except that fair market values are reduced for the cost of disposal.
Financial assets and liabilities measured at fair value
FASB ASC 820, "Fair Value Measurements" (formerly SFAS No. 157) defines fair value for certain financial and nonfinancial assets and liabilities that are recorded at fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This guidance applies to other accounting pronouncements that require or permit fair value measurements. On February 12, 2008, the FASB finalized FASB Staff Position (FSP) No. 157-2, Effective Date of FASB Statement No. 157 (ASC 820). This Staff Position delays the effective date of SFAS No. 157 (ASC 820) for nonfinancial assets and liabilities to fiscal years beginning after November 15, 2008 and interim periods within those fiscal years, except for those items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The adoption of SFAS No. 157 (ASC 820) had no effect on the Company's financial position or results of operations.
Revenue recognition
The Company's revenue recognition policies are in compliance with the SEC Staff Accounting Bulletin No. 104 ("SAB 104"). The Company recognizes product revenue when the following fundamental criteria are met: (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred, (iii) our price to the customer is fixed or determinable and (iv) collection of the resulting accounts receivable is reasonably assured. The Company recognizes revenue for product sales upon transfer of title to the customer. Customer purchase orders and/or contracts are generally used to determine the existence of an arrangement. Shipping documents and the completion of any customer acceptance requirements, when applicable, are used to verify product delivery or that services have been rendered. The Company assesses whether a price is fixed or determinable based upon the payment terms associated with the transaction and whether the sales price is subject to refund or adjustment.
The Company's revenue is recognized net of value-added tax (VAT), reductions to revenue for estimated product returns, and sales discounts based on volume achieved in the same period that the related revenue is recorded. The estimates are based on historical sales returns, analysis of credit memo data, and other factors known at the time. For the three months ended March 31, 2010 and 2009, sales discounts were $374,976 and $223,812, respectively.
Income taxes
The Company accounts for income taxes in accordance with FASB ASC Topic 740, "Income Taxes." ASC 740 requires a company to use the asset and liability method of accounting for income taxes, whereby deferred tax assets are recognized for deductible temporary differences, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion, or all of, the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the "more likely than not" test, no tax benefit is recorded. The adoption had no effect on the Company's consolidated financial statements.
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Foreign currency translation and comprehensive income
U.S. GAAP requires that recognized revenue, expenses, gains and losses be included in net income. Certain statements, however, require entities to report specific changes in assets and liabilities, such as gain or loss on foreign currency translation, as a separate component of the equity section of the balance sheet. Such items, along with net income, are components of comprehensive income. The functional currency of the Company is Renminbi ("RMB"). The unit of RMB is in Yuan. Translation gains are classified as an item of other comprehensive income in the stockholders' equity section of the consolidated balance sheet.
Recent Accounting Pronouncements
In July 2009, the FASB's ASC became the single, official source of authoritative, non-governmental GAAP in the United States. The historical GAAP hierarchy was eliminated and the ASC became the only level of authoritative GAAP, other than guidance issued by the Securities and Exchange Commission (the "SEC"). This guidance is effective for interim and annual periods ending after September 15, 2009. The Company adopted the provisions of this guidance for the year ended December 31, 2009. The Company's accounting policies were not affected by the conversion to the ASC. However, references to specific accounting standards have been changed to refer to the appropriate section of the ASC.
In December 2007, the FASB issued guidance now incorporated in ASC Topic 810 "Consolidation" (formerly SFAS No. 160). The guidance clarifies the accounting for noncontrolling interests and establishes accounting and reporting standards for the noncontrolling interest in a subsidiary, including classification as a component of stockholders' equity. The Company does not believe this pronouncement will impact its consolidated financial statements.
In March 2008, the FASB issued guidance now incorporated in ASC Topic 815 "Derivatives and Hedging" (formerly SFAS No. 161). The guidance is intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand how and why an entity uses derivative instruments and the instruments' effects on an entity's financial position, financial performance and cash flows. The guidance is effective for financial statements issued for fiscal years and interim periods beginning after November 15, 2008 with early application encouraged. This pronouncement is related to disclosure and did not have a material impact on the Company's consolidated financial statements.
In December 2008, the FASB issued guidance now incorporated in ASC Topic 860 "Transfers and Servicing" (formerly FASB Staff Position ("FSP") SFAS 140-4 and FASB Interpretation ("FIN") 46R). The guidance increases disclosure requirements for public companies and is effective for reporting periods (interim and annual) that end after December 15, 2008. The guidance requires public entities to provide additional disclosures about transferors' continuing involvements with transferred financial assets. It also requires public enterprises, including sponsors that have a variable interest in a variable interest entity, to provide additional disclosures about their involvement with variable interest entities. This pronouncement is related to disclosure only and did not have a material impact on the Company's consolidated financial statements.
In April 2009, the FASB issued guidance now incorporated in ASC Topic 825 "Financial Instruments" (formerly FSP SFAS 107-1). The guidance requires that the fair value disclosures required for financial instruments be included in interim financial statements. In addition, the guidance requires public companies to disclose the method and significant assumptions used to estimate the fair value of those financial instruments and to discuss any changes of method or assumptions, if any, during the reporting period. The guidance was effective for the Company's year ended December 31, 2009. This pronouncement is related to disclosure only and did not have a material impact on the Company's consolidated financial statements.
In May 2009, the FASB issued guidance now incorporated in ASC Topic 855 "Subsequent Events" (formerly SFAS No. 165). This guidance establishes general standards of accounting for and disclosures of events that occur after the balance sheet date but before the consolidated financial statements are issued or are available to be issued. Among other items, the guidance requires the disclosure of the date through which an entity has evaluated subsequent events and the basis for that date. It is effective for interim and annual periods ending after June 15, 2009. There was no material impact upon the adoption of this standard on the Company's financial statements.
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In June 2009, the FASB issued guidance now incorporated in ASC Topic 810 "Consolidation" (formerly SFAS No. 167) amending the consolidation guidance applicable to variable interest entities and the definition of a variable interest entity, and requiring enhanced disclosures to provide more information about a company's involvement in a variable interest entity. This guidance also requires ongoing assessments of whether an enterprise is the primary beneficiary of a variable interest entity. The Company does not believe this pronouncement will impact its financial statements.
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