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This DOG won't hunt!! eom
02/24/2009 CPSL Closed $1.09 HOD eom
02/24/2009 CPSL Closed $1.09 HOD eom
China Precision Steel, Inc. (CPSL) Corporate Event Announcement Notice
Tuesday February 10, 2009 20:54:18 EST
Feb 10, 2009 (Wall Street Horizon via COMTEX News Network) --
China Precision Steel, Inc. (CPSL)
Expected next earnings release:
Announcement date: 5/14/2009 - During Market
Earnings Quarter: Q3
Announcement Status: Unconfirmed
Expected next investor conference call information:
Conference Call Date: 2/10/2009
Conference Call Time (ET): 9:00 AM
Conference Call URL: http://www.chinaprecisionsteelinc.com/
(C) 2009 Wall Street Horizon, Inc. The Earnings Calendar Company(sm) All rights reserved www.WallStreetHorizon.com
Up nice.eom
CPSL up nice today. eom
Form 10-Q for CHINA PRECISION STEEL, INC.
--------------------------------------------------------------------------------
9-Feb-2009
Quarterly Report
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
Special Note Regarding Forward Looking Statements
This Quarterly Report on Form 10-Q, including the following "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains forward-looking statements that are based on the beliefs of our management, and involve risks and uncertainties, as well as assumptions, that, if they ever materialize or prove incorrect, could cause actual results to differ materially from those expressed or implied by such forward-looking statements. The words "believe," "expect," "anticipate," "project," "targets," "optimistic," "intend," "aim," "will" or similar expressions are intended to identify forward-looking statements. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements regarding new and existing products, technologies and opportunities; statements regarding 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; any statements of belief or intention; any of the factors and risks mentioned in the "Risk Factors" sections of the Quarter Report and our Annual Report on Form 10-K for the year ended June 30, 2008 and subsequent SEC filings, and any statements of assumptions underlying any of the foregoing. All forward-looking statements included in this report are based on information available to us on the date of this report. We assume no obligation and do not intend to update these forward-looking statements, except as required by law.
The following discussion should be read in conjunction with our unaudited consolidated financial statements and the related notes that appear in Part I, Item 1, "Financial Statements," of this Quarterly Report. Our unaudited consolidated financial statements are stated in United States Dollars and are prepared in accordance with United States Generally Accepted Accounting Principles. The following discussion and analysis covers the Company's consolidated financial condition at December 31, 2008 (unaudited) and June 30, 2008, the end of its prior fiscal year, and its unaudited consolidated results of operation for the three and six month periods ended December 31, 2008 and 2007.
Use of Terms
Except as otherwise indicated by the context, all references in this Quarterly Report to
· "Blessford International" are to PSHL's subsidiary Blessford International Limited, a BVI company;
· "Chengtong" are to PSHL's subsidiary Shanghai Chengtong Precision Strip Co., Limited, a PRC company;
· "China" and "PRC" are to the People's Republic of China.
· the "Company," the "Group," "we," "us" or "our" are to China Precision Steel, Inc., a Delaware corporation, and its direct and indirect subsidiaries;
· "Exchange Act" means the Securities Exchange Act of 1934, as amended;
· "PSHL" are to our subsidiary Partner Success Holdings Limited, a BVI company;
· "RMB" are to Renminbi, the legal currency of China;
· "Securities Act" are to the Securities Act of 1933, as amended;
· "Shanghai Blessford" are to Blessford International's subsidiary Shanghai Blessford Alloy Company Limited, a PRC company;
· "Tuorong" are to PSHL's subsidiary Shanghai Tuorong Precision Strip Company Limited, a PRC company;
· "U.S. dollar," "$" and "US$" are to the legal currency of the United States;
(xi) "BVI" are to the British Virgin Islands.
--------------------------------------------------------------------------------
Table of Contents
Overview of the Company's Business
General
We are a niche and high value-added steel processing company principally engaged in the manufacture and sale of high precision cold-rolled steel products, in the provision of heat treatment and in the cutting and slitting of medium and high-carbon hot-rolled steel strips. We use commodity steel to create a high value-added specialty premium steel. Specialty precision steel pertains to the precision of measurements and tolerances of thickness, shape, width, surface finish and other special quality features of highly-engineered end-use applications.
We produce and sell precision ultra-thin and high strength cold-rolled steel products ranging from 7.5 mm to 0.03 mm. We also provide heat treatment and cutting and slitting of medium and high-carbon hot-rolled steel strips not exceeding 7.5 mm thickness. Our process puts hot-rolled de-scaled (pickled) steel coils through a cold-rolling mill, utilizing our patented systems and high technology reduction processing procedures, to make steel coils and sheets in customized thicknesses according to customer specifications. Currently, our specialty precision products are mainly used in the manufacture of automobile parts and components, steel roofing, plane friction discs, appliances, food packaging materials, saw blades, textile needles, and microelectronics.
We conduct our operations principally in China through our wholly-owned operating subsidiaries, Chengtong and Shanghai Blessford, which are wholly owned subsidiaries of our direct subsidiary, PSHL. Most of our sales are made domestically in China; however, we began exporting during fiscal 2007 and our overseas market currently covers Indonesia, Thailand, the Philippines, Nigeria and Ethiopia. We intend to further expand into additional overseas markets in the future, subject to suitable market conditions and favorable regulatory controls.
Corporate History and Structure
We are a Delaware company that became a public company in May 1997, through a reverse merger with SSI Capital Corporation. At that time, we changed our name to OraLabs Holding Corp. and our principal business was the production and sale of consumer products relating to oral care and lip care and the distribution of nutritional supplements through our wholly-owned subsidiary, OraLabs, Inc. In December 2006, we merged with Partner Success Holdings Limited, or PSHL, a British Virgin Islands business company, and subsequently redeemed all of the shares of our outstanding common stock owned by our former President, Gary Schlatter, in exchange for all of the issued shares of OraLabs, Inc. As a result of the merger transaction PSHL and its subsidiary, became our subsidiaries, and our business became the manufacture and sale of high precision cold-rolled steel products. Thereafter, we renamed ourselves China Precision Steel, Inc. to reflect our continuing operations.
Our business is conducted principally through our PRC operating subsidiaries, Shanghai Chengtong Precision Strip Co., Limited, or Chengtong, and Shanghai Blessford Alloy Company Limited, or Shanghai Blessford. Both Chengtong and Shanghai Blessford are Wholly Foreign Owned Enterprises, or WFOEs, under Chinese law.
Our corporate headquarters are located at 18th Floor, Teda Building, 87 Wing Lok Street, Sheung Wan, Hong Kong, and our telephone number is (011) 852-2543-2290. Our agent for service of process in the United States is Corporation Service Company, 2711 Centerville Road, Wilmington, Delaware 19808. Our common stock is listed on The NASDAQ Capital Market under the symbol "CPSL." Although we maintain a website at www.chinaprecisionsteelinc.com, we do not intend that information available on our website be incorporated into this filing.
Recent Developments
We are currently faced with multiple challenges. Excess capacity, low industrial concentration and a lack of access to natural resources have long plagued China's steel sector, and these problems have been exacerbated by the impact of the global financial and economic crisis.
The RMB400 billion economic stimulus package formulated jointly by the Chinese government's National Development and Reform Commission and the Ministry of Industry and Information Technology in November 2008 is now planned to focus mainly on nine pillar industries, which include steel, automobiles, shipbuilding, petrochemicals, light industry, textiles, non-ferrous metals, machinery, and information technology, all with serious production surpluses in the whole industrial system.
--------------------------------------------------------------------------------
Table of Contents
Automobiles and steel sectors have been given priority and are the two main industries out of the nine pillars for which the government is expected to announce specific support packages and further details. On January 14, 2009, China's State Council approved a "rejuvenation plan" to support the steel industry, with the immediate aim to deal with the effects of the global financial and economic crisis and to also ease the industry's long-term structural problems. The steel industry plan includes eliminating obsolete capacity, speeding up innovation, promoting alliances and mergers and cutting export tariffs. The government will also subsidize loans of about RMB15 billion to encourage technological upgrading and product rationalization to better meet demand.
With more specific support details yet to be announced and the global crisis and its impact on China yet to run their full course, we expect to continue to experience weak demands and volatilities in both domestic and international markets for the next six months.
Second Quarter Financial Performance Highlights
During the second fiscal quarter of 2009, the impacts of the global crisis started to show as demand for steel products began to slow down. There were decreases in sales volume in most of our product lines over the three months ended December 31, 2008 as we are faced with multiple challenges and experiencing a difficult time with the global economic downturn. Demand is weak in all of the end segments we sell to, especially the high-carbon cold-rolled steel which are mainly used in auto components manufacturing, due to excess capacity and high inventory levels in the industry. Our two cold-rolling mills were fully utilized in October and November 2008 but the utilization rate has decreased to approximately 60% of actual capacity during December 2008 due to reduced orders on hand.
Due to the nature of our niche segment and high-end products, we were able to keep quality customers and further expand international sales during the quarter, and maintained a healthy gross margin of 19.6%. However, despite an increase in sales volume and revenue period-on-period, we recorded an allowance for bad and doubtful debts in the amount of $3,829,462 due to a dispute with one of our customers over the quality of service rendered by the Company, and had a net loss for the three months ended December 31, 2008.
While we are experiencing a reduction in orders, especially the high-carbon cold-rolled steel coils due to a slowdown in the auto industry, and exports to the South East Asian markets due to the credit crisis of these countries, we continue to negotiate new contracts with potential customers and broaden our customer base. Management continues to take appropriate actions to perform business and credit reviews of customers and suppliers and reduce exposure by avoiding entering into contracts with countries or customers with high credit risks. We strive to optimize our product mix and prioritize higher margin products in the existing business environment with the goal to maintain overall healthy sales volume, margins and cash positions. Management believes that there are high barriers to entry in the Chinese domestic precision cold-rolled steel industry because of the level of technology expertise required for operation. Although we continue to face slowing demands and volatilities in the steel industry, the medium to long term prospects remain highly optimistic and we believe that our unique capabilities and know-how give us a competitive advantage to grow sales and build a globally recognized brand as we continue to carry out R&D and expand to new segments, customers and markets.
The following are some financial highlights for the second quarter of 2009:
· Revenues: Our revenues were approximately $17.6 million for the second quarter of 2009, an increase of 32.9% from the same quarter of last year.
· Gross Margin: Gross margin was 19.6% for the second quarter of 2009, as compared to 35.5% for the same period in 2007.
· Income/(Loss) from operations before tax: Loss from operations before tax was approximately $(2.3) million for the second quarter of 2009, as compared to income from operations before tax of $4.1 million of the same period last year.
--------------------------------------------------------------------------------
Table of Contents
· Net Income/(Loss): Net loss was approximately $2.0 million for the second quarter of 2009, a decrease of 156.6% from the same period of last year.
· Fully diluted loss per share was $0.04 for the second quarter of 2009.
Results of Operations
The following table sets forth key components of our results of operations for
the periods indicated, in millions of U.S. dollars and as a percentage of
revenues.
All amounts, other than percentages, in millions of U.S. dollars
Three Months ended December 31, Six Months ended December 31,
2008 2007 2008 2007
Revenues $ 17,573,959 100.0 % $ 13,228,321 100.0 % $ 42,924,378 100.0 % $ 40,415,556 100.00 %
Cost of sales
(including
depreciation and
amortization) 14,122,622 80.4 % 8,528,852 64.5 % 35,520,383 82.8 % 28,773,987 71.2 %
Gross profit 3,451,337 19.6 % 4,699,469 35.5 % 7,403,995 17.2 % 11,641,569 28.8 %
Selling and
marketing 1,122,532 6.4 % 180,744 1.4 % 1,333,830 3.1 % 281,449 0.7 %
Administrative
expenses 578,105 3.3 % 846,220 6.4 % 1,040,205 2.4 % 1,332,596 3.3 %
Allowance for bad
and doubtful debts 3,829,462 21.8 % 25,782 0.2 % 3,829,462 8.9 % 651,780 1.6 %
Depreciation and
amortization 33,318 0.2 % 15,798 0.1 % 59,521 0.1 % 29,430 0.1 %
Income/(loss) from
operations (2,112,080 ) (12.0 )% 3,630,925 8.1 % 1,140,977 2.7 % 9,346,314 23.1 %
Other income
(expense) 138,998 0.8 % 783,255 5.9 % 259,701 0.6 % 792,410 2.0 %
Interest expense,
Cash (320,777 ) (1.8 )% (316,860 ) (2.4 )% (648,182 ) (1.5 )% (759,001 ) (1.9 )%
Income/(loss) before
income taxes (2,293,859 ) (13.1 )% 4,097,320 31.0 % 752,496 1.8 % 9,379,723 23.2 %
Income taxes (318,878 ) 0.2 % 610,869 4.6 % (148,257 ) 0.3 % 52,566 0.1 %
Net income/(loss) $ (1,974,981 ) (11.0 )% $ 3,486,451 26.4 % $ 900,753 2.1 % $ 9,327,157 23.1 %
Basic
earnings/(loss) per
share $ (0.04 ) $ 0.08 $ 0.02 $ 0.23
Diluted
earnings/(loss) per
share $ (0.04 ) $ 0.08 $ 0.02 $ 0.23
Comparison of Three Months Ended December 31, 2008 and December 31, 2007
Sales Revenues. Sales volume increased by 852 tons, or 6.1%, period-on-period to 14,862 tons for the three months ended December 31, 2008 from 14,010 tons for the three months ended December 31, 2007. As a result, sales revenues increased by $4,345,638, or 32.9%, period-on-period to $17,573,959 for the three months ended December 31, 2008 from $13,228,321 for the three months ended December 31, 2007. The increases in sales and sales revenues are a result of an increase in volume sold during the quarter ended December 31, 2008.
--------------------------------------------------------------------------------
Table of Contents
A break-down of our sales by product line for the three months ended December 31, 2008 and 2007 is as follows:
Three Months Ended December 31,
2008 2007 Period-on-period
Quantity Quantity % of Qty.
Product category (tons) $ Amount % of sales (tons) $ Amount sales Variance
Low carbon
cold-rolled 1,834 2,107,484 12.0 3,442 2,791,741 21.1 (1,608 )
Low carbon hard
rolled (export) 11,755 13,238,537 75.3 4,897 3,503,082 26.5 6,858
High-carbon
cold-rolled 196 168,782 1.0 3,520 4,174,255 31.6 (3,324 )
High-carbon
hot-rolled 861 903,754 5.1 1,171 917,057 6.9 (310 )
Sales of scrap
metal - 1,106,292 6.3 - 251,146 1.9 -
Subcontracting
income 216 49,110 0.3 980 1,591,040 12.0 (764 )
Total 14,862 17,573,959 100.0 14,010 13,228,321 100
Low carbon hard-rolled steel, which is also our exported precision steel products, accounted for 26.5% of sales during the three months ended December 31, 2007. This was $13,238,537, or 75.3%, of the current sales mix at an average selling price of $1,126 per ton for the three months ended December 31, 2008. This was the result of new customers in expanded international markets, including Africa. The low-carbon cold-rolled steel products accounted for 12.0% of the current sales mix at an average selling price of $1,149 per ton for the three months ended December 31, 2008 compared to 21.1% of the sales mix at an average selling price per ton of $811 for the three months ended December 31, 2007. The decrease is a result of reduced orders in this category. High-carbon cold-rolled steel products accounted for 1.0% of the current sales mix at an average selling price of $861 per ton for the three months ended December 31, 2008 compared to 31.6% of the sales mix at an average selling price per ton of $1,186 for the three months ended December 31, 2007. The decrease in this category is largely attributable to the troubled Chinese auto industry with its weak demand and excess capacity, as most of our high-carbon cold-rolled steel products are sold to auto components manufacturers. Subcontracting income decreased to 0.3% of the current sales mix at an average selling price of $227 for the three months ended December 31, 2008 compared to 12% of the sales mix for the three months ended December 31, 2007 at an average selling price of $1,624 as no new substantial orders were received during the quarter.
Three Months Ended
December 31,
Average selling prices 2008 2007 Variance
$ $ $ %
Low-carbon cold-rolled 1,149 811 338 42
Low-carbon hard rolled (export) 1,126 715 411 57
High-carbon cold-rolled 861 1,186 (325 ) (27 )
High-carbon hot-rolled 1,050 783 267 34
Subcontracting income 227 1,624 (1,397 ) (86 )
The average unit selling price per ton generated increased to $1,183 per ton for the three months ended December 31, 2008, compared to the corresponding period in 2007 of $944, representing an increase of $239, or 25.3%, period-on-period. This increase was mainly due to increases in average raw material prices period-on-period and therefore selling prices, as well as changes in average selling prices across the product categories. Sales of low-carbon hard-rolled steel products have increased by 6,858 tons, or 140.0%, period-on-period to 11,755 tons for the three months ended December 31, 2008 compared to 4,897 tons for the three months ended December 31, 2007. While the volume of low-carbon hard-rolled steel substantially increased, the average sales price also increased $411, or 57%, to $1,126 in the three months ended December 31, 2008, as compared to an average selling of $715 in the three months ended December 31, 2007. This product accounted for $13,238,537, or 75.3%, of the total sales mix for the three months ended December 31, 2008 compared to $3,503,082, or 26.5%, of the sales mix for the three months ended December 31, 2007.
--------------------------------------------------------------------------------
Table of Contents
A break-down of our sales by major customer for the three months ended December 31, 2008 and 2007 is as follows:
Three Months Ended December 31
Customers 2008 ($) % to sales 2007 ($) % to sales
Salzgitter Mannesmann International
GMBH 11,257,852 64 * *
Marubeni-Itochu Steel Inc. 1,626,006 9 * *
Shanghai Changshuo Stainless Steel
Processing Co. Ltd. 1,140,227 7 2,370,370 18
Coutinho and Ferrostaal GMBH 351,887 2 * *
Zhangjiagang Gangxing Innovative
Construction Material Co., Ltd. 336,980 2 * *
Shanghai Shengdejia Metal Products
Limited * * 3,181,709 24
Beijing Beimo Aircraft Material
Technology Company Limited * * 85,468 1
Hangzhou Relian Company Limited * * 266,970 2
Shangdong Province Boxing County
Longhua Material Ltd. * * 381,227 3
14,712,952 84 6,285,744 48
Others 2,861,007 16 6,942,577 52
Total 17,573,959 100 13,228,321 100
--------------------------------------------------------------------------------
* Not a major customer for the relevant periods
Sales revenues generated from the top five major customers as a percentage of total sales increased to 84% for the three months ended December 31, 2008 as compared to 48% for the three months ended December 31, 2007. The top five major customers were different period-on-period with the exception of Shanghai Changshuo Stainless Steel Processing Co., Ltd.. The change in customer mix reflects our focus in optimizing product mix to maximize margins and expansion of markets during the course of the period.
Cost of Sales. Cost of sales increased by $5,593,770, or 65.6%, period-on-period to $14,122,622 for the three months ended December 31, 2008 from $8,528,852 for the three months ended December 31, 2007. Cost of sales represented 80.4% of sales revenues for the three months ended December 31, 2008 compared to 64.5% for the three months ended December 31, 2007. Average cost per ton sold increased by $341, or 56.0%, period-on-period to $950 per ton for the three months ended December 31, 2008 from $609 per ton for the three months ended December 31, 2007. Meanwhile, the average selling price per ton increased by $239 per ton, or 25.3%, period-on-period to $1,183 per ton for the three months ended December 31, 2008 from $944 per ton for the three months ended December 31, 2007.
Three Months Ended December 31,
2008 2007 Variance
$ $ $ %
Cost of sales
- Raw materials 11,339,712 6,362,758 4,976,954 78.2
- Direct labor 261,110 167,926 93,184 55.5
- Factory overhead 2,521,800 1,998,168 523,632 26.2
14,122,622 8,528,852 5,593,770 65.6
Cost per unit sold
Total units sold (tons) 14,862 14,010 852 6.1
Average cost per unit sold ($/ton) 950 609 341 56.0
--------------------------------------------------------------------------------
Table of Contents
Management believes that the increase in cost of sales is represented by the combined effect of:
? a significant increase in cost of raw materials per unit sold of $309, or 68.0%, from $454 for the three months ended December 31, 2007, compared to $763 for the three months ended December 31, 2008;
? an increase in factory overhead per unit sold of $27, or 19%, from $143 for three months ended December 31, 2007, compared to $170 for the three months ended December 31, 2008.
The cost of raw materials consumed increased by $4,976,954, or 78.2%, period-on-period to $11,339,712, for the three months ended December 31, 2008 from $6,362,758 for the three months ended December 31, 2007. This increase was due to increases in raw material prices period-on-period.
Manufacturing overhead costs increased by $523,632, or 26.2%, period-on-period to $2,521,800 for the three months ended December 31, 2008, from $1,998,168 for the three months ended December 31, 2007. The increase was mainly attributable to the combined effect of an increase in utilities of $165,380, or 52%, period-on-period to $486,116 for the three months ended December 31, 2008 from $320,736 for the three months ended December 31, 2007, and an increase in depreciation allocated to cost of goods sold of $323,139, or 67%, period-on-period to $806,621 for the three months ended December 31, 2008, from $483,482 for the three months ended December 31, 2007.
Gross Profits and Gross Margin. Our gross profit is equal to the difference between our revenues and our cost of goods sold. Gross profit in absolute terms decreased by $1,248,132, or 27%, period-on-period to $3,451,337 for the three months ended December 31, 2008, from $4,699,469 for the three months ended December 31, 2007, while gross profit margin decreased to 19.6% for the three months ended December 31, 2008, from 35.5% for the three months ended December . . .
This is your frist and only post. Your right Pavis is a scam. JHO
Volume good
CHINA PRECISION STEEL INC( CPSL :NASDAQ)
*Real Time Stock QuoteData is delayed|Source: NYSE ARCA Real-time Stock Prices
Extended Hours Unavailable
Last Trade --- UNCH ()
Change*
Volume
1.25
Last Trade 0.02 (+1.63%)
Change
* 498,913
Volume 12:26:56 PM
CPSL on the move today 80K + already traded.
Looks like someone is buying today 80K + already traded.
Time to buy CPSL.
Just pick up more shares of CPSL.
CHINA PRECISION STEEL INC( CPSL :NASDAQ)
*Real Time Stock QuoteData is delayed|Source: NASDAQ Real-time Last Sale
Extended Hours Unavailable
Last Trade --- UNCH ()
Change*
Volume
1.46
Last Trade 0.12 (+8.95%)
Change
* 237,929
Volume 09:55:26 AM
Trade Time
Watch CPSL it going up in pre market again.
CPSL UP Pre Market
CHINA PRECISION STEEL INC( CPSL :NASDAQ)
*Real Time Stock QuoteData is delayed|Source: NASDAQ Real-time Last Sale
Extended Hours 1.84
Last Trade 0.04 (+2.22%)
Pre-Market Change
* 5,530
Volume 08:30:19 AM
Pre Market
Up nice today. eom
Press Release Source: Danaos Corporation
Danaos Corporation Adds 39th Containership to Its Fleet
Tuesday January 6, 9:00 am ET
ATHENS, GREECE--(MARKET WIRE)--Jan 6, 2009 -- Danaos Corporation (NYSE:DAC - News) announced today January 6, 2009, that it took delivery of one more containership, the Zim Monaco, expanding its operational fleet to a total of 39 containerships aggregating 157,427 TEU.
ADVERTISEMENT
The Zim Monaco has a carrying capacity of 4,253 TEU and was built by Samsung Heavy Industries. It is 260 meters long, 32 meters wide and has a speed of 24.5 knots (about 45 Km/h). The Zim Monaco has already commenced its 12-year time charter at fixed rates immediately upon delivery. This vessel is recorded as the first vessel export in Korea's shipbuilding industry in 2009, and it is the 16th vessel Danaos has received from Samsung Heavy Industries out of the 18 vessels that Danaos has ordered in total at the shipyard.
"We enthusiastically welcome the latest delivery," said Dr. Coustas, Chief Executive Officer of Danaos. "We are proud to have taken delivery of the first 2009 built containership from Samsung Heavy Industries. The vessel has already commenced its 12-year time charter with Zim Line, one of the largest containership liner companies in the world. It is chartered at an accretive fixed charter rate which provides Danaos with an effective hedge against market charter rate volatility. We now own and operate a fleet of 39 containerships which provides Danaos with strong cash flows to further support our growth."
About Danaos Corporation
Danaos Corporation is an international owner of containerships, chartering its vessels to many of the world's largest liner companies. Our current fleet of 39 containerships aggregating 157,427 TEUs ranks Danaos among the largest containership charter owners in the world based on total TEU capacity. Danaos is the largest US listed containership company based on fleet size. Furthermore, the company has a contracted fleet of 30 additional containerships aggregating 226,456 TEU with scheduled deliveries up to 2011. The company's shares trade on the New York Stock Exchange under the symbol "DAC".
Visit our website at www.danaos.com
Contact:
For further information please contact:
Company Contact:
Dimitri Andritsoyiannis
Chief Financial Officer
Danaos Corporation
Athens, Greece
Tel: +30 210 419 6481
E-Mail: cfo@danaos.com
Iraklis Prokopakis
Chief Operating Officer
Danaos Corporation
Athens, Greece
Tel. +30 210 419 6400
E-Mail: coo@danaos.com
Investor Relations and Financial Media:
Nicolas Bornozis
President
Capital Link, Inc.
New York
Tel. 212-661-7566
E-Mail: nbornozis@capitallink.com
--------------------------------------------------------------------------------
Source: Danaos Corporation
Danaos Corporation is a corporation domesticated in the Republic of The Marshall Islands that is referred to in this Annual Report on Form 20-F, together with its subsidiaries, as "Danaos Corporation," "the Company," "we," "us," or "our." This report should be read in conjunction with our consolidated financial statements and the accompanying notes thereto, which are included in Item 18 to this annual report.
We use the term "Panamax" to refer to vessels capable of transiting the Panama Canal and "Post-Panamax" to refer to vessels with a beam of more than 32.31 meters that cannot transit the Panama Canal. We use the term "twenty foot equivalent unit," or "TEU," the international standard measure of containers, in describing the capacity of our containerships. Unless otherwise indicated, all references to currency amounts in this annual report are in U.S. dollars
Danaos Corporation Announces a Share Repurchase Program
ATHENS, GREECE -- (Marketwire) -- 11/25/08 -- Danaos Corporation (NYSE: DAC) announces that its Board of Directors has approved a share repurchase program and authorized the officers of the Company to repurchase, from time to time, up to 1,000,000 shares of the Company's common stock (par value $0.01).
Wow up big today
China Precision Steel, Inc.(NasdaqCM: CPSL)
After Hours: 1.89 0.09 (5.00%)6:17PM EThelp
China Precision Steel, Inc.(NasdaqCM: CPSL)
After Hours: 1.89 0.09 (5.00%)6:17PM EThelp
CPSL up nice again today
CPSL up .09 in pre market. Check in out.
Up .09 in pre market. eom
cpsl looks good jho eom
Time for a break out on CPSL. JHO EOM
Time for a break out on CPSL. JHO EOM
- Securities Registration Statement (simplified form) (S-3)
Date : 12/30/2008 @ 4:34PM
Source : Edgar (US Regulatory)
Stock : (CPSL)
Quote : 1.19 0.0 (0.00%) @ 5:46PM
- Securities Registration Statement (simplified form) (S-3)
As filed with the Securities and Exchange Commission on December 30, 2008
Registration No. 333-
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CHINA PRECISION STEEL, INC.
(Exact name of registrant as specified in its charter)
Delaware 14-1623047
(State or other jurisdiction of incorporation or organization) (I.R.S.
Employer Identification Number)
China Precision Steel, Inc.
18th Floor, Teda Building
87 Wing Lok Street
Sheung Wan, Hong Kong
People’s Republic of China
+852-2543-2290
(Address, including zip code, and telephone number, including area code
of registrant’s principal executive offices)
Wo Hing Li
8th Floor, Teda Building
87 Wing Lok Street
Sheung Wan, Hong Kong
People’s Republic of China
+852-2543-2290
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
Scott C. Kline, Esq.
Pillsbury Winthrop Shaw Pittman LLP
50 Fremont Street
San Francisco, CA 94105-2228
(415) 983-1000
Approximate date of commencement of proposed sale to the public : From time to time after this Registration Statement becomes effective, as determined by market conditions and other factors.
If the only securities being registered on this form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.
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If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box.
x
If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
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If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.
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If this form is a registration statement pursuant to General Instruction 1.D. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box.
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If this form is a post-effective amendment to a registration statement filed pursuant to General Instruction 1.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨ Accelerated filer x
Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ¨
Calculation of Additional Registration Fee (1)
Title of Each Class of Securities to be
Registered (1) Proposed Maximum Aggregate
Offering Price (2) Amount of Registration
Fee (3) (4)
Common Stock, $0.001 par value per share — —
Preferred Stock, $0.001 par value per share — —
Warrants — —
Debt Securities
TOTAL $ 40,000,000 $ 1,572
(1) We are registering hereunder such indeterminate number of shares of Common Stock and Preferred Stock, such indeterminate principal amount of Debt Securities, such indeterminate number of Warrants to purchase Common Stock, Preferred Stock or Debt Securities, as shall have an aggregate initial offering price not to exceed $40,000,000. If any Debt Securities are issued at an original issue discount, then the offering price of such Debt Securities shall be in such greater principal amount as shall result in an aggregate initial offering price not to exceed $40,000,000, less the aggregate dollar amount of all securities previously issued hereunder. Any securities registered hereunder may be sold separately or as units with other securities registered hereunder. The securities registered also include such indeterminate numbers of shares of Common Stock and Preferred Stock, and principal amounts of Debt Securities, as may be issued upon conversion of or exchange for Preferred Stock or Debt Securities that provide for conversion or exchange, upon exercise of Warrants or pursuant to the antidilution provisions of any such securities.
(2) Estimated solely for the purpose of calculating the registration fee pursuant to rule 457(o) under the Securities Act, and exclusive as accrued interest, distributions and dividends, if any.
(3) Not specified as to each class of securities to be registered hereunder pursuant to General Instruction II(D) to Form S-3 under the Securities Act.
(4) Calculated pursuant to Rule 457 under the Securities Act, which permits the registration fee to be calculated on the basis of the maximum aggregate offering price of all securities listed.
The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
Subject to Completion, Dated December 30, 2008
PROSPECTUS
$ 40,000,000
CHINA PRECISION STEEL, INC.
Common Stock
Preferred Stock
Debt Securities
Warrants
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We may offer, issue and sell shares of our common stock, par value $0.001, preferred stock, par value $0.001, debt securities and warrants from time to time, in one or more issuances. This prospectus provides a general description of offerings of these securities that we may undertake. The aggregate public offering price of securities being offered will not exceed $ 40,000,000 .
Each time we sell shares of our common stock, preferred stock, debt securities and warrants pursuant to this prospectus, we will provide the specific terms of such offering in a supplement to this prospectus. The prospectus supplement may also add, update, or change information contained in this prospectus. You should read this prospectus and the accompanying prospectus supplement, together with additional information described under the heading “Where You Can Find More Information” and “Information Incorporated by Reference,” before you make your investment decision.
This prospectus may not be used to offer or sell our common stock, preferred stock, debt securities or warrants to purchase common stock unless accompanied by a prospectus supplement. The information contained or incorporated in this prospectus or in any prospectus supplement is accurate only as of the date of this prospectus, or such prospectus supplement, as applicable, regardless of the time of delivery of this prospectus or any sale of these securities.
Our common stock is listed on the NASDAQ Capital Market under the symbol “CPSL.” On December 26, 2008, the last reported per share sale price of our common stock was $1.22. You are urged to obtain current market quotations of our common stock before purchasing any of the shares being offered for sale pursuant to this prospectus.
We may offer securities through underwriting syndicates managed or co-managed by one or more underwriters, through agents, or directly to purchasers. The prospectus supplement for each offering of securities will describe the plan of distribution for that offering. For general information about the distribution of securities offered, please see “Plan of Distribution” in this prospectus.
Investing in the securities being offered pursuant to this prospectus involves a high degree of risk. You should carefully read and consider the information set forth in the section of this prospectus titled “Risk Factors,” beginning on page 7, when determining whether to purchase any of these shares.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus or any prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus is _____________, 2008
TABLE OF CONTENTS
Page
Prospectus Summary 5
Risk Factors 7
Forward-Looking Statements 7
Use of Proceeds 7
Ratio of Earnings to Fixed Charges 7
Description of Securities 8
Plan of Distribution 13
Legal Matters 14
Experts 14
Where You Can Find More Information 15
Incorporation of Certain Information By Reference 15
INFORMATION CONTAINED IN THIS PROSPECTUS
This prospectus is part of a registration statement we filed with the Securities and Exchange Commission, or the SEC. You should rely only on the information we have provided or incorporated by reference in this prospectus, any prospectus supplement or any free writing prospectus. No person has been authorized to give any information or to make any representation not contained in this prospectus in connection with this offering of common stock, preferred stock, debt securities and warrants and, if given or made, no one may rely on such unauthorized information or representations. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the common stock, preferred stock, debt securities and warrants to which it relates, or an offer to sell or the solicitation of an offer to buy such securities in any jurisdiction in which such offer or solicitation may not be legally made. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create any implication that the information contained herein is correct as of any date subsequent to the date hereof. You should assume that the information in this prospectus or any prospectus supplement is accurate only as of the date on the front of the document and that any information we have incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the time of delivery of this prospectus or any sale of shares of common stock, preferred stock, debt securities or warrants. In this prospectus and any prospectus supplement, unless otherwise indicated, “CPSL,” “the Company,” “we,” “us” and “our” refer to China Precision Steel, Inc. and its subsidiaries.
This prospectus is part of a registration statement that we filed with the Securities and Exchange Commission, or SEC, using a “shelf” registration process. Under this shelf registration process, we may offer shares of common stock, preferred stock, debt securities or warrants described in this prospectus in one or more offerings up to a total dollar amount of $40,000,000. Each time we offer common stock, preferred stock, debt securities or warrants we will provide a prospectus supplement that will contain more specific information about the securities offered. We may also add, update or change in the prospectus supplement any of the information contained in this prospectus. This prospectus, together with applicable prospectus supplements, includes all material information relating to this offering. Please read carefully both this prospectus and any prospectus supplement, together with the additional information described below under “Where You Can Find More Information.” THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE A SALE OF SECURITIES UNLESS IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
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PROSPECTUS SUMMARY
This summary highlights information about us and the securities being offered by this prospectus. This summary is not complete and may not contain all of the information that you should consider prior to investing in our common stock, preferred stock, debt securities or warrants. You should read this prospectus, including all documents incorporated herein by reference, together with additional information described under the heading “Where You Can Find More Information.”
Our Company
We are a Delaware holding company whose China-based operating subsidiaries are primarily engaged in the manufacture and sale of high precision cold-rolled steel products and in the provision of heat treatment and cutting of medium and high carbon hot-rolled steel strips. We are headquartered in Sheung Wan, Hong Kong.
We became a public company in May 1997 through a reverse merger with SSI Capital Corporation. At that time, we changed our name to OraLabs Holding Corp. and our principal business was the production and sale of consumer products relating to oral care and lip care and the distribution of nutritional supplements through our wholly-owned subsidiary, OraLabs, Inc. In December 2006, we merged with Partner Success Holdings Limited, or PSHL, a British Virgin Islands business company which owns Chengtong. In connection with that transaction, we subsequently redeemed all of the shares of our outstanding common stock owned by our former President, Gary Schlatter, in exchange for all of the issued shares of OraLabs, Inc. Thereafter, we renamed ourselves China Precision Steel, Inc. to reflect our continuing operations.
Through our wholly-owned operating subsidiaries, Shanghai Chengtong Precision Strip Company Limited, or Chengtong and Shanghai Blessford Alloy Company Limited, or Shanghai Blessford, we are a niche and high value-added steel processing company. We use commodity steel to create a specialty premium steel intended to yield above-average industry gross margins. Specialty precision steel pertains to the precision of measurements and tolerances of thickness, shape, width, surface finish and other special quality features of highly-engineered end-use applications. We manufacture and sell precision ultra-thin and high strength cold-rolled steel products with thicknesses ranging from 7.5 mm to 0.03 mm. We also provide heat treatment and cutting and slitting of cold-rolled steel strips not exceeding 7.5 mm thickness.
Our process puts hot-rolled de-scaled (pickled) steel coils through a cold-rolling mill, utilizing our patented systems and high technology reduction processing procedures, to make steel coils and sheets in customized thicknesses, according to customer specifications. Currently, our specialty precision products are mainly used in the manufacture of automobile parts and components, steel roofing, plane friction discs, appliances, food packaging materials, saw blades, textile needles and microelectronics.
Most of our sales are made domestically in China, however, over the course of the past two years, we have begun to alter our product mix to meet market demands in our primary market, as well as to expand into overseas markets. During fiscal 2007, we began exporting our cold-rolled steel products to Nigeria, Thailand, Indonesia and the Philippines. We intend to expand into additional overseas markets in the future, subject to suitable market conditions and favorable regulatory controls. We continue to focus on the production of higher margin products, although we have increased production of certain of our lower margin products due to market demand. These changes in our strategy have created increased capital requirements as we have sought to construct additional rolling mills to accommodate our planned growth.
Our market is highly competitive, although we have focused on a niche market that allows us to compete effectively as we continue to grow our business. We face significant competition for raw materials, especially crude steel, and our financial results may be impacted by changes in the market prices for these materials. Given our size, we do not have the ability to influence the prices at which we must purchase raw materials. However, the nature of our products enable us to pass on all or part of the price fluctuations in raw materials to our customers.
As of June 30, 2008, we had an annual production capacity of approximately 120,000 tons.
Our second cold-rolling mill, which has been operating since October 2006 with a production design capacity of 120,000 tons, has an approximately 50% utilization rate as of June 30, 2008, and is expected to reach 80% to 90% capacity by the end of calendar year 2009. We plan to commence construction of our third mill in the last quarter of calendar year 2008, which has an equivalent design capacity.
Each mill takes approximately three to four years to reach full operating capacity. The second and third mills will focus on the production of high carbon, high strength cold-rolled steel products and the production of more complex precision steel products that cannot be manufactured in our first rolling mill. Our first rolling mill, which has an operating capacity of 60,000 to 70,000 tons depending on the thickness of the steel processed, will continue to primarily manufacture low carbon precision cold-rolled steel products.
During the fiscal years ended June 30, 2008, 2007 and 2006, we earned net income before discontinued operations of $18,583,111, $7,472,661, and $7,514,101, respectively. The discontinued operations represent those of OraLabs, Inc. which was spun off from the Company in December of 2006. At June 30, 2008, we had total assets of $165,535,370. Chengtong and Shanghai Blessford currently have approximately 283 employees, including 45 senior management and technical staff members, and leases 20,000 square meters of production facilities in Jiading District, Shanghai, on four acres of property.
Principal Executive Offices
Our corporate headquarters are located at 18 th Floor, Teda Building, 87 Wing Lok Street, Sheung Wan, Hong Kong, and our telephone number is (011) 852-2543-2290. Our agent for service of process in the United States is Corporation Service Company, 2711 Centerville Road, Wilmington, Delaware 19808. Our common stock is listed on The NASDAQ Capital Market under the symbol “CPSL.” Although we maintain a website at www.chinaprecisionsteelinc.com , we do not intend that information available on our website be incorporated into this filing. As used herein, the “Group” refers to the Company, PSHL, BFI, Chengtong and Shanghai Blessford on a consolidated basis.
RISK FACTORS
We operate in a highly competitive environment in which there are numerous factors which can influence our business, financial position or results of operations and which can also cause the market value of our securities to decline. Many of these factors are beyond our control and therefore, are difficult to predict. You should read the section entitled “Risk Factors” in our most recent Annual Report on Form 10-K and our most recent Quarterly Reports on Form 10-Q, which are incorporated herein by reference. That section discusses what we believe to be the principal risks that could affect us, our business or our industry, and which could result in a material adverse impact on our financial results or cause the market price of our common stock to fluctuate or decline. However, there may be additional risks and uncertainties not currently known to us or that we presently deem immaterial that could also affect our business operations and the market value of our securities.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains and incorporates “forward-looking statements” within the meaning of Section 27A of the United States Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the United States Securities Exchange Act of 1934, as amended, or the Exchange Act. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases like “anticipate,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “target,” “expects,” “management believes,” “we believe,” “we intend,” “we may,” “we will,” “we should,” “we seek,” “we plan,” the negative of those terms, and similar words or phrases. We base these forward-looking statements on our expectations, assumptions, estimates and projections about our business and the industry in which we operate as of the date of this prospectus. These forward-looking statements are subject to a number of risks and uncertainties that cannot be predicted, quantified or controlled and that could cause actual results to differ materially from those set forth in, contemplated by, or underlying the forward-looking statements. Statements in this prospectus and in documents incorporated into this prospectus, including those set forth below in “Risk Factors, “describe factors, among others, that could contribute to or cause these differences.
Because the factors discussed in this prospectus or incorporated by reference could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible for us to predict which will arise. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
USE OF PROCEEDS
Except specified otherwise in any prospectus supplement, we expect to use the net proceeds from the sale of the securities offered hereby to finance our growth plans including possible acquisitions and/or to fund the future expansion of our existing manufacturing facilities, as well as for general working capital purposes. Pending these uses, we plan to invest the net proceeds in investment-grade, interest-bearing securities.
RATIO OF EARNINGS TO FIXED CHARGES
The following table shows our consolidated ratio of earnings to fixed charges for the periods indicated:
Three Months
Ended Years Ended June 30,
September 30, 2008 2008 2007 2006 2005 2004
Ratio of earnings to fixed Charges:
Including deposit interest 10.25 16.50 7.93 9.06 14.62 1.84
Excluding deposit interest 10.19 16.26 7.84 9.06 14.62 1.84
We have computed the ratio of earnings to fixed charges set forth above by dividing earnings from continuing operations by fixed charges. For the purpose of determining the ratios, earnings include pre-tax income from continuing operations, extraordinary charges and changes in accounting principles plus fixed charges (excluding capitalized interest). Fixed charges consist of the sum of interest on all indebtedness (including capitalized interest), interest expense on deposits, as applicable, and interest within rental expense, which is estimated to be one-third of rental expense.
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DESCRIPTION OF SECURITIES
The following description, together with the additional information included in any applicable prospectus supplement, summarizes the material terms of our securities that may be offer under this prospectus. For a complete description of the terms of our common stock and preferred stock, please refer to our certificate of incorporation and our amended and restated by-laws, each of which are incorporated by reference into the registration statement which includes this prospectus. The terms of our common and preferred stock may also be affected by the General Corporation Law of Delaware. We will also include in the prospectus supplement, where applicable, information about material United States federal income tax considerations relating to our securities. See “Where You Can Find More Information.”
Common Stock
We are authorized to issue up to 62,000,000 shares of common stock, par value $0.001. As of December 26, 2008, there were 46,562,955 shares of our common stock outstanding held by approximately 879 stockholders, and no preferred shares issued and outstanding. Holders of our common stock are entitled to one vote for each share held on all matters submitted to a vote of stockholders and do not have cumulative voting rights. Accordingly, holders of a majority of the shares of common stock entitled to vote in any election of directors may elect all of the directors standing for election. Holders of our common stock are entitled to receive proportionately any dividends as may be declared by our board of directors. Upon our liquidation, dissolution or winding up, the holders of our common stock are entitled to receive proportionately our net assets available for distribution after the payment of all debts and other liabilities. Holders of our common stock have no preemptive, subscription, redemption or conversion rights. Our common stock is traded on The NASDAQ Capital Market under the symbol “CPSL.”
All of our issued and outstanding shares of common stock are duly authorized, validly issued, fully paid and nonassessable. The rights, preferences and privileges of holders of our common stock are subject to and may be adversely affected by, the rights of the holders of shares of any series of preferred stock which we may, subject to stockholder approval, authorize, designate and issue in the future. To the extent that additional shares of our common stock are issued, the relative interests of existing stockholders will be diluted.
Preferred Stock
We are authorized to issue up to 8,000,000 shares of preferred shares, par value $0.001, issuable in series. No shares of preferred stock are currently outstanding. Our board of directors is authorized, subject to limits imposed by relevant Delaware laws, to issue shares of preferred stock in one or more classes or series within a class upon authority of the board without further stockholder approval. Any preferred stock issued in the future may rank senior to the common stock with respect to the payment of dividends or amounts upon liquidation, dissolution or winding up of us, or both. In addition, any such shares of preferred stock may have class or series voting rights.
If we offer a specific series of preferred stock under this prospectus, we will describe the terms of the preferred stock in the prospectus supplement for such offering and will file a copy of the certificate establishing the terms of the preferred stock with the SEC. To the extent required, this description will include:
• the title and stated value;
• the number of shares offered, the liquidation preference per share and the purchase price;
• the dividend rate(s), period(s) and/or payment date(s), or method(s) of calculation for such dividends;
• whether dividends will be cumulative or non-cumulative and, if cumulative, the date from which dividends will accumulate;
• the procedures for any auction and remarketing, if any;
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• the provisions for a sinking fund, if any;
• the provisions for redemption, if applicable;
• any listing of the preferred stock on any securities exchange or market;
• whether the preferred stock will be convertible into our common stock, and, if applicable, the conversion price (or how it will be calculated) and conversion period;
• whether the preferred stock will be exchangeable into debt securities, and, if applicable, the exchange price (or how it will be calculated) and exchange period;
• voting rights, if any, of the preferred stock;
• a discussion of any material and/or special U.S. federal income tax considerations applicable to the preferred stock;
• the relative ranking and preferences of the preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of the affairs of China Precision Steel, Inc.; and
• any material limitations on issuance of any class or series of preferred stock ranking senior to or on a parity with the series of preferred stock as to dividend rights and rights upon liquidation, dissolution or winding up of China Precision Steel, Inc.
Debt Securities
We may issue senior or subordinated debt securities. The senior debt securities and, in the case of debt securities in bearer form, any coupons to these securities, will constitute part of our senior debt and, except as otherwise provided in the applicable prospectus supplement, will rank on a parity with all of our other unsecured and unsubordinated debt. The subordinated debt securities and any coupons will constitute part of our subordinated debt and will be subordinate and junior in right of payment to all of our “senior indebtedness” (as defined herein). If this prospectus is being delivered in connection with a series of subordinated debt securities, the accompanying prospectus supplement or the information we incorporate in this prospectus by reference will indicate the approximate amount of senior indebtedness outstanding as of the end of the most recent fiscal quarter. If issued, there will be one indenture for senior debt securities and one for subordinated debt securities.
Payments
We may issue debt securities from time to time in one or more series. The provisions of each indenture may allow us to “reopen” a previous issue of a series of debt securities and issue additional debt securities of that issue. The debt securities may be denominated and payable in U.S. dollars.
Debt securities may bear interest at a fixed rate or a floating rate, which, in either case, may be zero, or at a rate that varies during the lifetime of the debt security. Debt securities may be sold at a substantial discount below their stated principal amount, bearing no interest or interest at a rate which at the time of issuance is below market rates. The applicable prospectus supplement will describe the federal income tax consequences and special considerations applicable to any such debt securities.
Terms Specified in Prospectus Supplement
The prospectus supplement will contain, where applicable, the following terms of and other information relating to any offered debt securities:
• classification as senior or subordinated debt securities and the specific designation;
• aggregate principal amount, purchase price and denomination;
• currency in which the debt securities are denominated and/or in which principal, and premium, if any, and/or interest, if any, is payable;
• date of maturity;
• the interest rate or rates or the method by which the interest rate or rates will be determined, if any;
• the interest payment dates, if any;
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• the place or places for payment of the principal of and any premium and/or interest on the debt securities;
• any repayment, redemption, prepayment or sinking fund provisions, including any redemption notice provisions;
• whether we will issue the debt securities in registered form or bearer form or both and, if we are offering debt securities in bearer form, any restrictions applicable to the exchange of one form for another and to the offer, sale and delivery of those debt securities in bearer form;
• whether we will issue the debt securities in definitive form and under what terms and conditions;
• the terms on which holders of the debt securities may convert or exchange these securities into or for common or preferred stock or other securities of ours offered hereby, into or for common or preferred stock or other securities of an entity affiliated with us or debt or equity or other securities of an entity not affiliated with us, or for the cash value of our stock or any of the above securities, the terms on which conversion or exchange may occur, including whether conversion or exchange is mandatory, at the option of the holder or at our option, the period during which conversion or exchange may occur, the initial conversion or exchange price or rate and the circumstances or manner in which the amount of common or preferred stock or other securities issuable upon conversion or exchange may be adjusted;
• information as to the methods for determining the amount of principal or interest payable on any date and/or the currencies, securities or baskets of securities, commodities or indices to which the amount payable on that date is linked;
• any agents for the debt securities, including trustees, depositories, authenticating or paying agents, transfer agents or registrars;
• the depository for global certificated securities, if any; and
• any other specific terms of the debt securities, including any additional events of default or covenants, and any terms required by or advisable under applicable laws or regulations.
Registration and Transfer of Debt Securities
Holders may present debt securities for exchange, and holders of registered debt securities may present these securities for transfer, in the manner, at the places and subject to the restrictions stated in the debt securities and described in the applicable prospectus supplement. We will provide these services without charge except for any tax or other governmental charge payable in connection with these services and subject to any limitations provided in the applicable indenture.
Subordination Provisions
The prospectus supplement relating to any offering of subordinated debt securities will describe the specific subordination provisions. However, unless otherwise noted in the prospectus supplement, subordinated debt securities will be subordinate and junior in right of payment to all of our senior indebtedness, to the extent and in the manner set forth in the subordinated indenture. The indenture for any subordinated debt securities will define the applicable “senior indebtedness.” Senior indebtedness shall continue to be senior indebtedness and be entitled to the benefits of the subordination provisions irrespective of any amendment, modification or waiver of any term of such senior indebtedness.
The applicable prospectus supplement will describe the circumstances under which we may withhold payment of principal of, or any premium or interest on, any subordinated debt securities. In such event, any payment or distribution under the subordinated debt securities, whether in cash, securities or other property, which would otherwise (but for the subordination provisions) be payable or deliverable in respect of the subordinated debt securities, will be paid or delivered directly to the holders of senior indebtedness or their representatives or trustees in accordance with the priorities then existing among such holders as calculated by us until all senior indebtedness has been paid in full. If any payment or distribution under the subordinated debt securities is received by the trustee of any subordinated debt securities in contravention of any of the terms of the subordinated indenture and before all the senior indebtedness has been paid in full, such payment or distribution will be received in trust for the benefit of, and paid over or delivered to, the holders of the senior indebtedness or their representatives or trustees at the time outstanding in accordance with the priorities then existing among such holders as calculated by us for application to the payment of all senior indebtedness remaining unpaid to the extent necessary to pay all such senior indebtedness in full.
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Covenants
The applicable prospectus supplement will contain, where applicable, the following information about any senior debt securities issued under it:
• the terms and conditions of any restrictions on our ability to create, assume, incur or guarantee any indebtedness for borrowed money that is secured by a pledge, lien or other encumbrance; and
• the terms and conditions of any restrictions on our ability to merge or consolidate with any other person or to sell, lease or convey all or substantially all of our assets to any other person.
Events of Default
The indenture for any senior debt securities will provide holders of the securities with the terms of remedies if we fail to perform specific obligations, such as making payments on the debt securities or other indebtedness, or if we become bankrupt. Holders should review these provisions and understand which of our actions trigger an event of default and which actions do not. The indenture may provide for the issuance of debt securities in one or more series and whether an event of default has occurred may be determined on a series by series basis. The events of default will be defined under the indenture and described in the prospectus supplement.
The prospectus supplement will contain:
• the terms and conditions, if any, by which the securities holders may declare the principal of all debt securities of each affected series and interest accrued thereon to be due and payable immediately; and
• the terms and conditions, if any, under which all of the principal of all debt securities and interest accrued thereon shall be immediately due and payable.
The prospectus supplement will also contain a description of the method by which the holders of the outstanding debt securities may annul past declarations of acceleration of, or waive past defaults of, the debt securities.
The indenture will contain a provision entitling the trustee, subject to the duty of the trustee during a default to act with the required standard of care, to be indemnified by the holders of debt securities issued under the indenture before proceeding to exercise any trust or power at the request of holders.
The prospectus supplement will contain a description of the method by which the holders of outstanding debt securities may direct the time, method and place of conducting any proceeding for any remedy available to the applicable trustee, or exercising any trust or power conferred on the trustee.
The indenture will provide that no individual holder of debt securities may institute any action against us under the indenture, except actions for payment of overdue principal and interest. The prospectus supplement will contain a description of the circumstances under which a holder may exercise this right.
The indenture will contain a covenant that we will file annually with the trustee a certificate of no default or a certificate specifying any default that exists.
Discharge
The prospectus supplement will contain a description of our ability to eliminate most or all of our obligations on any series of debt securities prior to maturity provided we comply with the provisions described in the prospectus supplement.
We will also have the ability to discharge all of our obligations, other than as to transfers and exchanges, under any series of debt securities at any time, which we refer to as “defeasance.” We may be released with respect to any outstanding series of debt securities from the obligations imposed by any covenants limiting liens and consolidations, mergers, and asset sales, and elect not to comply with those sections without creating an event of default. Discharge under those procedures is called “covenant defeasance.” The conditions we must satisfy to exercise covenant defeasance with respect to a series of debt securities will be described in the applicable prospectus supplement.
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Modification of the Indenture
The prospectus supplement will contain a description of our ability and the terms and conditions under which, with the applicable trustee, we may enter into supplemental indentures which make certain changes that do not adversely affect in any material respect the interests of the holders of any series without the consent of the holders of debt securities issued under a particular indenture.
The prospectus supplement will contain a description of the method by which we and the applicable trustee, with the consent of the holders of outstanding debt securities, may add any provisions to, or change in any manner or eliminate any of the provisions of, the applicable indenture or modify in any manner the rights of the holders of those debt securities. The prospectus supplement will also describe the circumstances under which we may not exercise on this right without the consent of each holder that would be affected by such change.
We may not amend a supplemental indenture relating to subordinated debt securities to alter the subordination of any outstanding subordinated debt securities without the written consent of each potentially adversely affected holder of subordinated and senior indebtedness then outstanding.
Warrants
We may issue warrants to purchase preferred stock or common stock. We may offer warrants separately or together with one or more additional warrants, shares of preferred stock or common stock, or any combination of those securities in the form of units, as described in the applicable prospectus supplement. If we issue warrants as part of a unit, the prospectus supplement will specify whether those warrants may be separated from the other securities in the unit prior to the warrants' expiration date. We may issue the warrants under warrant agreements to be entered into between us and a bank or trust company, as warrant agent, all as described in the prospectus supplement. If we issue the warrants under warrant agreements, the warrant agent will act solely as our agent in connection with the warrants and will not assume any obligation or relationship of agency or trust for or with any holders or beneficial owners of warrants. We will describe the particular terms of any warrants that we offer in the prospectus supplement relating to those warrants.
The applicable prospectus supplement will contain, where applicable, the following terms of, and other information relating to, the warrants:
• the specific designation and aggregate number of, and the price at which we will issue, the warrants;
• the currency or currency units in which the offering price, if any, and the exercise price are payable;
• the designation, amount and terms of the securities purchasable upon exercise of the warrants;
• if applicable, the exercise price for shares of our common stock and the number of shares of common stock to be received upon exercise of the warrants;
• if applicable, the exercise price for shares of our preferred stock, the number of shares of preferred stock to be received upon exercise, and a description of that series of our preferred stock;
• if applicable, the exercise price for our debt securities, the amount of debt securities to be received upon exercise, and a description of that series of debt securities;
• the date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you may not continuously exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants;
• whether the warrants will be issued in fully registered form or bearer form, in definitive or global form or in any combination of these forms, although, in any case, the form of a warrant included in a unit will correspond to the form of the unit and of any security included in that unit;
• any applicable material U.S. federal income tax consequences;
the identity of the warrant agent for the warrants and of any other depositaries, execution or paying agents, transfer agents, registrars or other agents;
• the proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any securities exchange;
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• if applicable, the date from and after which the warrants and the common stock, preferred stock and/or debt securities will be separately transferable;
• if applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
• information with respect to book-entry procedures, if any;
• the anti-dilution provisions of the warrants, if any;
• any redemption or call provisions;
• whether the warrants are to be sold separately or with other securities as parts of units; and
• any additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the warrants.
Anti-takeover Effects of Our Certificate of Incorporation and By-laws
Our Certificate of Incorporation and By-laws , as well as Delaware corporate law, contain provisions that could delay or prevent a change of control or changes in our management that a stockholder might consider favorable and may prevent you from receiving a takeover premium for your shares. These provisions include, for example: (i) our certificate of incorporation provides that only our Chairman or any three (3) board members may call a special meeting of stockholders; (ii) our Certificate of Incorporation cannot be amended unless our board of directors recommends the amendment; (iii) our stockholders cannot increase the size of our board of directors to more than nine (9) without the approval of the board of directors; (iv) our board of directors is authorized to issue up to 8,000,000 preferred shares without a stockholder vote; and (v) our stockholders may not remove members from our board of directors except for cause.
We are a Delaware corporation subject to the provisions of Section 203 of the Delaware General Corporation Law, an anti-takeover law. Generally, this statute prohibits a publicly-held Delaware corporation from engaging in a business combination with an interested stockholder (generally, persons who beneficially own 15% or more of our outstanding voting stock), for a period of three years after the date of the transaction in which such person became an interested stockholder, unless the business combination is approved in a prescribed manner. A business combination includes a merger, asset sale or other transaction resulting in a financial benefit to the stockholder. We anticipate that the provisions of Section 203 may encourage parties interested in acquiring us to negotiate in advance with our board of directors, because the stockholder approval requirement would be avoided if a majority of the directors then in office approve either the business combination or the transaction that results in the stockholder becoming an interested stockholder. These provisions apply even if the offer may be considered beneficial by some of our stockholders.
Transfer Agent and Registrar
The transfer agent and registrar for our securities is Corporate Stock Transfer, Inc., 3200 Cherry Creek Drive South, Suite 430, Denver, Colorado 80209, and its telephone number is (303) 282-4800.
PLAN OF DISTRIBUTION
We may sell the common stock, preferred stock, debt securities and warrants from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or a combination of these methods. We may sell the securities (1) through underwriters or dealers, (2) through agents and/or (3) directly to one or more purchasers. We may distribute the common stock from time to time in one or more transactions:
· at a fixed price or prices, which may be changed;
· at market prices prevailing at the time of sale;
· at prices related to such prevailing market prices; or
· at negotiated prices.
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We may solicit directly offers to purchase the common stock, preferred stock, debt securities and warrants being offered by this prospectus. We may also designate agents to solicit offers to purchase the securities from time to time. We will name in a prospectus supplement any agent involved in the offer or sale of our securities.
If we utilize a dealer in the sale of the common stock, preferred stock, debt securities and warrants being offered by this prospectus, we will sell these securities to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the time of resale.
If we utilize an underwriter in the sale of the securities being offered by this prospectus, we will execute an underwriting agreement with the underwriter at the time of sale and we will provide the name of any underwriter in the prospectus supplement that the underwriter will use to make resales of the common stock, preferred stock, debt securities and warrants to the public. In connection with the sale of the securities, we, or the purchasers of securities for whom the underwriter may act as agent, may compensate the underwriter in the form of underwriting discounts or commissions. The underwriter may sell the common stock, preferred stock, debt securities and warrants to or through dealers, and the underwriter may compensate those dealers in the form of discounts, concessions or commissions.
We will provide in the applicable prospectus supplement any compensation we pay to underwriters, dealers or agents in connection with the offering of the securities, and any discounts, concessions or commissions allowed by underwriters to participating dealers. Underwriters, dealers and agents participating in the distribution of the securities may be deemed to be underwriters within the meaning of the Securities Act of 1933 and any discounts and commissions received by them and any profit realized by them on resale of the securities may be deemed to be underwriting discounts and commissions. We may enter into agreements to indemnify underwriters, dealers and agents against civil liabilities, including liabilities under the Securities Act, or to contribute to payments they may be required to make in respect thereof. The underwriters, dealers and agents may engage in other transactions with us, or perform services for us, in the ordinary course of business.
Any underwriter may engage in over-allotment, stabilizing and syndicate short covering transactions and penalty bids in accordance with Regulation M of the Exchange Act. Over-allotment involves sales in excess of the offering size, which creates a short position. Stabilizing transactions involve bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. Syndicate short covering transactions involve purchases of securities in the open market after the distribution has been completed in order to cover syndicate short positions. Penalty bids permit the underwriters to reclaim selling concessions from dealers when the securities originally sold by such dealers are purchased in covering transactions to cover syndicate short positions. These transactions may cause the price of the securities sold in an offering to be higher than it would otherwise be. These transactions, if commenced, may be discontinued by the underwriters at any time.
Our common stock currently is traded on the NASDAQ Capital Market. Any shares of our common stock sold pursuant to a prospectus supplement also will be traded on the NASDAQ Capital Market or on an exchange on which our common stock offered is then listed, subject (if applicable) to official notice of issuance.
We are not obligated to maintain our listing on the NASDAQ Capital Market. Any underwriters to whom we sell our securities for public offering and sale may make a market in the securities that they purchase, but the underwriters will not be obligated to do so and may discontinue any market making at any time without notice.
The anticipated date of delivery of the securities offered hereby will be set forth in the applicable prospectus supplement relating to each offering.
LEGAL MATTERS
The validity of the issuance of the securities being offered by this prospectus will be passed upon by Pillsbury Winthrop Shaw Pittman LLP, San Francisco, California.
EXPERTS
The consolidated financial statements of China Precision Steel, Inc. for the years ended June 30, 2008 and June 30, 2007, appearing in our Annual Report on Form 10-K for those years, have been audited by Moore Stephens, an Independent Registered Public Accounting Firm and by Murrell, Hall, McIntosh & Co., PLLP, an Independent Registered Public Accounting Firm, respectively, as set forth in their reports included therein and are incorporated herein by reference in reliance upon such report given on the authority of such firm as experts in accounting and auditing.
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other information with the SEC under the Securities Exchange Act of 1934. Such reports and other information may be inspected and copied at the SEC’s Public Reference Room at 100 F Street, N.E., Room 1580, Washington, DC 20549. Please call the SEC at 1-800-SEC-0330 for further information on the Public Reference Room. The SEC also maintains an Internet site that contains reports, proxy statements and other information about issuers, like us, who file electronically with the SEC. The address of the SEC’s web site is http://www.sec.gov .
We have filed a registration statement on Form S-3 with the SEC to register the resale of shares of common stock, preferred stock and warrants offered pursuant to this prospectus. This prospectus is part of that registration statement and, as permitted by the SEC’s rules, does not contain all of the information included in the registration statement. For further information about us, the shares and our common stock, preferred stock and warrants, you may refer to the registration statement and its exhibits and schedules as well as the documents described herein or incorporated herein by reference. You can review and copy these documents at the public reference facilities maintained by the SEC or on the SEC’s website as described above.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to “incorporate by reference” into this prospectus the information that we have filed with the SEC, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is an important part of this prospectus, and the information that we file later with the SEC will automatically update and supercede the information contained in this prospectus. We incorporate by reference the following documents that we have filed with the SEC pursuant to Section 13(a) or 15(d) of the Exchange Act: (i) our Annual Report on Form 10-K for the fiscal year ended June 30, 2008, as amended; (ii) our Quarterly Report on Form 10-Q for the first fiscal quarter ended September 30, 2008; (iii) our Current Report on Form 8-K filed on November 12, 2008; and (iv) all of our filings pursuant to the Exchange Act after the date of filing of the initial registration statement and prior to the effectiveness of the registration statement.
This prospectus may contain information that updates, modifies or is contrary to information in one or more of the documents incorporated by reference in this prospectus. Reports we file with the SEC after the date of this prospectus may also contain information that updates, modifies or is contrary to information in this prospectus or in documents incorporated by reference in this prospectus. All documents that we file after the date of this prospectus pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior to the termination of this offering, shall be deemed to be incorporated by reference into this prospectus. Investors should review these reports as they may disclose a change in our business, prospects, financial condition or other affairs after the date of this prospectus.
You should rely only upon the information incorporated by reference or provided in this prospectus or any prospectus supplement. We have not authorized anyone else to provide you with any other information. You should not assume that the information in this prospectus or any prospectus supplement is accurate as of any date other than the date on the front page of those documents.
Upon the written or oral request of any person, including a beneficial owner, to whom this prospectus is delivered, we will provide, at no cost, a copy of any or all of the information that is incorporated by reference in this prospectus but not delivered with this prospectus. Requests for such documents should be directed to: China Precision Steel, Inc., 8th Floor, Teda Building, 87 Wing Lok Street, Sheung Wan, Hong Kong, People’s Republic of China, Attn: Investor Relations (telephone +852-2543-8223).
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PROSPECTUS
$ 40,000,000
CHINA PRECISION STEEL, INC.
Common Stock
Preferred Stock
Warrants
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PROSPECTUS
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_________________, 2008
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses to be paid by us in connection with the sale of the shares of common stock, preferred stock and warrants being registered hereby. All amounts are estimates, except for the SEC registration fee.
SEC registration fee $ 1,572
Accounting fees and expenses *
Legal fees and expenses *
Transfer agent and registrar fees and expenses *
Miscellaneous expenses *
Total *
* To be filed by amendment.
Item 15. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware permits a corporation, under specified circumstances, to indemnify its directors, officers, employees or agents against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlements actually and reasonably incurred by them in connection with any action, suit or proceeding brought by third parties by reason of the fact that they were or are directors, officers, employees or agents of the corporation, if such directors, officers, employees or agents acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reason to believe their conduct was unlawful. In a derivative action, i.e., one by or in the right of the corporation, indemnification may be made only for expenses actually or reasonably incurred by directors, officers, employees or agents in connection with the defense or settlement of an action or suit, and only with respect to a matter as to which they have acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made if such person shall have been adjudged liable to the corporation, unless and only to the extent that the court in which the action or suit was brought shall determine upon application that the defendant directors, officers, employees or agents are fairly and reasonably entitled to indemnity for such expenses despite such adjudication of liability.
Our certificate of incorporation states that our directors will not have personal liability for monetary damages for any breach of fiduciary duty as a director, except to the extent that the Delaware General Corporation Law prohibits the elimination or limitation of liability of directors for breaches of fiduciary duty. We also carry liability insurance covering each of our directors and officers.
Our bylaws require us to indemnify our former and current directors and officers of the Company against expenses incurred in any action brought against those persons as a result of their role with the Company, to the fullest extent permitted by law. Our board of directors has the discretion to indemnify other persons acting in their capacity as authorized representatives of the Company to the same extent. Similarly, we may, in some circumstances, advance to a person potentially eligible for indemnification the expenses incurred in defending such an action.
Insofar as indemnification by us for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling the company pursuant to provisions of our articles of incorporation and bylaws, or otherwise, we have been advised that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. In the event that a claim for indemnification by such director, officer or controlling person of us in the successful defense of any action, suit or proceeding is asserted by such director, officer or controlling person in connection with the securities being offered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by us is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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The majority of our directors and all of our executive officers reside outside the United States. In addition, our principal executive office is located in Hong Kong. Outside the United States, it may be difficult for investors to enforce judgments obtained against the Company, our director or our officers in actions brought in the United States, including actions predicated upon the civil liability provisions of U.S. federal securities laws.
At the present time, there is no pending litigation or proceeding involving a director, officer, employee or other agent of ours in which indemnification would be required or permitted. We are not aware of any threatened litigation or proceeding, which may result in a claim for such indemnification.
Item 16. Exhibits.
The following exhibits are filed herewith and as a part of this registration statement:
EXHIBIT NO.
DESCRIPTION
3.1 Amended and Restated Articles of Incorporation (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 3.1)
3.2 Second Amended and Restated Bylaws (incorporated herein by reference to the Company’s Form 10-KSB, dated March 31, 1999, Exhibit 3.1.II)
4.1 Specimen Certificate for Common Stock (incorporated herein by reference to the Company’s Form 10-Q for the quarterly period ended December 31, 2006, dated February 13, 2007, Exhibit 3.1)
4.2 Form of Warrant (incorporated herein by reference to the Company’s Form 8-K, dated February 16, 2007, Exhibit 4.1)
4.3 Warrant, dated February 22, 2007, to Belmont Capital Group Limited (incorporated herein by reference to the Company’s Form 8-K, dated February 16, 2007, Exhibit 4.2)
4.4 Warrant, dated February 22, 2007, to CCG Elite Investor Relations (incorporated herein by reference to the Company’s Form 8-K, dated February 16, 2007, Exhibit 4.3)
5.1* Opinion of Pillsbury Winthrop Shaw Pittman LLP
10.1 Redemption Agreement, dated December 28, 2006 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.1)
10.2 Tax Indemnity Agreement, dated December 28, 2006 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.2)
10.3 2006 Long Term Incentive Plan (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.3)
10.4 2006 Director Stock Plan, dated March 1, 2006 (incorporated herein by reference to the Company’s Definitive Proxy Statement, dated November 27, 2006, Annex 3)
10.5 Equipment Mortgage Agreement between Chengtong and Raiffeisen Zentralbank Österreich AG, dated January 12, 2005 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.4)
10.6 Mortgage Agreement on Immovables between Shanghai Tuorong Precision Strip Company Limited and Raisffesien Zentralbank Öesterreich AG, dated January 12, 2005 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.5)
10.7 Letter of Offer between Chengtong and Raiffeisen Zentralbank Österreich AG, dated October 14, 2004 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.6)
10.8 Amendment No. 1 to Letter of Offer between Chengtong and Raiffeisen Zentralbank Österreich AG, dated December 28, 2004 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.7)
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10.9 Amendment No. 2 to Letter of Offer between Chengtong and Raiffeisen Zentralbank Österreich AG, dated May 10, 2005 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.8)
10.10 Amendment No. 3 to Letter of Offer between Chengtong and Raiffeisen Zentralbank Österreich AG, dated July 26, 2005 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.9)
10.11 Debt Reduction Agreement, dated February 13, 2007, by and among the Company, Wo Hing Li and Partner Success Holdings Limited (incorporated herein by reference to the Company’s Form 8-K, dated February 13, 2007, Exhibit 10.1)
10.12 Deed of Release, dated February 13, 2007, from Wo Hing Li, in favor of the Company, Partner Success Holdings Limited and Shanghai Chengtong Precision Strip Co., Ltd. (incorporated herein by reference to the Company’s Form 8-K, dated February 13, 2007, Exhibit 10.2)
10.13 Amendment to the Debt Reduction Agreement, dated February 20, 2007, by and among the Company, Wo Hing Li and Partner Success Holdings Limited (incorporated herein by reference to the Company’s Form 8-K, dated February 16, 2007, Exhibit 10.4)
10.14 Form of Stock Purchase Agreement, by and among the Company and the Investors, dated February 16, 2007 (incorporated herein by reference to the Company’s Form 8-K, dated February 16, 2007, Exhibit 10.1)
10.15 Form of Limited Standstill Agreement (incorporated herein by reference to the Company’s Form 8-K, dated February 16, 2007, Exhibit 10.2)
10.16 Form of Subscription Agreement, dated November 1, 2007 (incorporated herein by reference to the Company’s Form 8-K filed on November 1, 2007, Exhibit 10.1)
10.17 Form of Placement Agency Agreement, dated October 31, 2007 (incorporated herein by reference to the Company’s Form 8-K filed on November 1, 2007, Exhibit 10.2)
21 Subsidiaries of the Registrant (incorporated herein by reference to the Company’s Annual Report on Form 10-K filed on September 15, 2008, Exhibit 21)
22 Published report regarding matters submitted to vote of security holders (Incorporated herein by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2006, dated February 13, 2007, Exhibit 99.1)
23.1* Consent of Pillsbury Winthrop Shaw Pittman LLP (included in Exhibit 5.1).
23.2* Consent of Murrell, Hall, McIntosh & Co., PLLP, Independent Registered Public Accounting Firm
23.3* Consent of Moore Stephens , Independent Registered Public Accounting Firm
24.1* Power of Attorney (included on the signature page hereto).
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
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(ii) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the SEC pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement; and
(iii) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement, provided, however , that subsections (i), (ii) and (iii) above do not apply if the information required to be included in a post-effective amendment by those subsections is contained in reports filed with or furnished to the SEC by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
(i) each prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and
(ii) each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii) or (x) for the purpose of providing the information required by Section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date.
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;
(ii) Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
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(iii) The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv) Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
(6) That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(7) To file, if applicable, an application for the purpose of determining the eligibility of the trustee to act under subsection (a) of Section 310 of the Trust Indenture Act of 1939 in accordance with the rules and regulations prescribed by the SEC under Section 305(b)(2) of the Trust Indenture Act of 1939.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Hong Kong, China, on this 30 th day of December, 2008.
CHINA PRECISION STEEL, INC.
By: /s/ Wo Hing Li
Wo Hing Li, President and Chief Executive Officer
(Principal Executive Officer)
By: /s/ Leada Tak Tai Li
Leada Tak Tai Li, Chief Financial Officer
(Principal Financial and Accounting Officer)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature to this Registration Statement on Form S-3 appears below hereby constitutes and appoints Wo Hing Li and Leada Tak Tai Li, and each or any of them, his or her true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement , and to sign any registration statement for the same offering covered by this Registration Statement that is to be effective on filing pursuant to Rule 462(b) promulgated under the Securities Act of 1933, and all post-effective amendments thereto, and to file the same, with all exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or his substitute or their substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form S-3 has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
Chief Executive Officer, President
/s/ Wo Hing Li and Director (Principal Executive Officer) December 30, 2008
Wo Hing Li
Chief Financial Officer, Secretary and Treasurer
/s/ Leada Tak Tai Li (Principal Financial and Accounting Officer) December 30, 2008
Leada Tak Tai Li
/s/ Hai Sheng Chen General Manager, Director December 30, 2008
Hai Sheng Chen
/s/ Che Kin Lui Director December 30, 2008
Che Kin Lui
/s/ David Peter Wong Director December 30, 2008
David Peter Wong
/s/ Tung Kuen Tsui Director December 30, 2008
Tung Kuen Tsui
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EXHIBIT INDEX
EXHIBIT NO.
DESCRIPTION
3.1 Amended and Restated Articles of Incorporation (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 3.1)
3.2 Second Amended and Restated Bylaws (incorporated herein by reference to the Company’s Form 10-KSB, dated March 31, 1999, Exhibit 3.1.II)
4.1 Specimen Certificate for Common Stock (incorporated herein by reference to the Company’s Form 10-Q for the quarterly period ended December 31, 2006, dated February 13, 2007, Exhibit 3.1)
4.2 Form of Warrant (incorporated herein by reference to the Company’s Form 8-K, dated February 16, 2007, Exhibit 4.1)
4.3 Warrant, dated February 22, 2007, to Belmont Capital Group Limited (incorporated herein by reference to the Company’s Form 8-K, dated February 16, 2007, Exhibit 4.2)
4.4 Warrant, dated February 22, 2007, to CCG Elite Investor Relations (incorporated herein by reference to the Company’s Form 8-K, dated February 16, 2007, Exhibit 4.3)
5.1* Opinion of Pillsbury Winthrop Shaw Pittman LLP
10.1 Redemption Agreement, dated December 28, 2006 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.1)
10.2 Tax Indemnity Agreement, dated December 28, 2006 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.2)
10.3 2006 Long Term Incentive Plan (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.3)
10.4 2006 Director Stock Plan, dated March 1, 2006 (incorporated herein by reference to the Company’s Definitive Proxy Statement, dated November 27, 2006, Annex 3)
10.5 Equipment Mortgage Agreement between Chengtong and Raiffeisen Zentralbank Österreich AG, dated January 12, 2005 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.4)
10.6 Mortgage Agreement on Immovables between Shanghai Tuorong Precision Strip Company Limited and Raisffesien Zentralbank Öesterreich AG, dated January 12, 2005 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.5)
10.7 Letter of Offer between Chengtong and Raiffeisen Zentralbank Österreich AG, dated October 14, 2004 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.6)
10.8 Amendment No. 1 to Letter of Offer between Chengtong and Raiffeisen Zentralbank Österreich AG, dated December 28, 2004 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.7)
10.9 Amendment No. 2 to Letter of Offer between Chengtong and Raiffeisen Zentralbank Österreich AG, dated May 10, 2005 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.8)
--------------------------------------------------------------------------------
10.10 Amendment No. 3 to Letter of Offer between Chengtong and Raiffeisen Zentralbank Österreich AG, dated July 26, 2005 (incorporated herein by reference to the Company’s Form 8-K, dated January 4, 2007, Exhibit 10.9)
10.11 Debt Reduction Agreement, dated February 13, 2007, by and among the Company, Wo Hing Li and Partner Success Holdings Limited (incorporated herein by reference to the Company’s Form 8-K, dated February 13, 2007, Exhibit 10.1)
10.12 Deed of Release, dated February 13, 2007, from Wo Hing Li, in favor of the Company, Partner Success Holdings Limited and Shanghai Chengtong Precision Strip Co., Ltd. (incorporated herein by reference to the Company’s Form 8-K, dated February 13, 2007, Exhibit 10.2)
10.13 Amendment to the Debt Reduction Agreement, dated February 20, 2007, by and among the Company, Wo Hing Li and Partner Success Holdings Limited (incorporated herein by reference to the Company’s Form 8-K, dated February 16, 2007, Exhibit 10.4)
10.14 Form of Stock Purchase Agreement, by and among the Company and the Investors, dated February 16, 2007 (incorporated herein by reference to the Company’s Form 8-K, dated February 16, 2007, Exhibit 10.1)
10.15 Form of Limited Standstill Agreement (incorporated herein by reference to the Company’s Form 8-K, dated February 16, 2007, Exhibit 10.2)
10.16 Form of Subscription Agreement, dated November 1, 2007 (incorporated herein by reference to the Company’s Form 8-K filed on November 1, 2007, Exhibit 10.1)
10.17 Form of Placement Agency Agreement, dated October 31, 2007 (incorporated herein by reference to the Company’s Form 8-K filed on November 1, 2007, Exhibit 10.2)
21 Subsidiaries of the Registrant (incorporated herein by reference to the Company’s Annual Report on Form 10-K filed on September 15, 2008, Exhibit 21)
22 Published report regarding matters submitted to vote of security holders (Incorporated herein by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended December 31, 2006, dated February 13, 2007, Exhibit 99.1)
23.1* Consent of Pillsbury Winthrop Shaw Pittman LLP (included in Exhibit 5.1).
23.2* Consent of Murrell, Hall, McIntosh & Co., PLLP, Independent Registered Public Accounting Firm
23.3* Consent of Moore Stephens, Independent Registered Public Accounting Firm
24.1* Power of Attorney (included on the signature page hereto).
--------------------------------------------------------------------------------
* Filed herewith
--------------------------------------------------------------------------------
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China Precision Steel files for $40 mln mixed shelf
Tue Dec 30, 2008 4:50pm EST
WASHINGTON, Dec 30 (Reuters) - China Precision Steel Inc (CPSL.O) on Tuesday filed with regulators to periodically sell up to $40 million in common and preferred stock, warrants, and debt securities.
The company said in a filing with the U.S. Securities and Exchange Commission that it will use the proceeds from the offering to finance its growth plans and for general working capital purposes.
Under a shelf registration, a company may sell securities in one or more separate offerings with the size, price and terms to be determined at the time of sale. (Reporting by Karey Wutkowski)
Up some today. eom
Could be ready for a jump. eom
Enterra Energy Trust Announces Third Quarter 2008 Financial and Operating Results
Date : 11/14/2008 @ 8:00AM
Source : MarketWire
Stock : Enterra Energy Trust (ENT)
Quote : 0.5001 -0.001 (-0.20%) @ 11:34AM
Enterra Energy Trust Announces Third Quarter 2008 Financial and Operating Results
CALGARY, ALBERTA -- (Marketwire) -- 11/14/08 -- Enterra Energy Trust ("Enterra" or the "Trust") announces its financial and operating results for the three and nine months ended September 30, 2008.
"We made tremendous progress on reducing our debt during the quarter," commented Blaine Boerchers, Enterra's Chief Financial Officer. "We were successful in keeping our production steady and achieved 100 percent drilling success during the quarter. The improvement in our financial strength during 2008 will provide us with more financial flexibility to manage through the current volatile economic and financial market conditions."
Q3 2008 Significant Accomplishments
- Reduction of total bank debt in the quarter by $31.3 million to $102.8 million, for a total decrease of $69.2 million since the beginning of 2008
- Funds from operations for the quarter were $27.9 million and $83.7 million for nine months
- Average production of 10,117 boe per day, better than previous target
- Drilled seven liquids-rich gas wells in Oklahoma with 100 percent success
In the third quarter 2008, Enterra reported net income of $14.9 million ($0.23 per unit), compared to a net loss of $47.7 million ($0.78 per unit) in the same period last year. The Trust's funds from operations totalled $27.9 million during the quarter, which is an increase of 29 percent over the same period last year. The increase in funds from operations is primarily the result of higher commodity prices realized.
Capital expenditures during the quarter were $13.7 million. Enterra participated in the drilling of seven (1.6 net) wells in Oklahoma. The wells were liquids-rich natural gas wells which were 100 percent successful. All seven wells have been completed and are in the early dewatering stages.
The Trust recorded a provision for non-recoverable receivables for the full amount owed by SemGroup L.P. of $9.1 million with a corresponding decrease to net income ($6.7 million net of tax). Management believes that some portion of the $9.1 million may be recoverable; however, that amount cannot be determined at this time and therefore an allowance for the full amount has been recorded.
In light of current market uncertainty, Enterra's management and board of directors have decided not to reintroduce any distribution payments for the balance of 2008. Instead, it was determined that the best use of excess cash flow available to the Trust will be towards further debt reduction. Enterra's priority remains the maintenance of the maximum financial flexibility possible, while also continuing to reinvest conservatively to preserve and grow the underlying value of the Trust's assets. Enterra intends to announce specific strategies and targets for 2009 by the end of November.
Third Quarter Summary----------------------------------------------------------------------------
Three months ended
September 30
2008 2007 Change
----------------------------------------------------------------------------
Average sales volume (boe/day) 10,117 12,798 (21%)
----------------------------------------------------------------------------
Revenues(1) (in thousands) $ 68,026 $ 57,677 18%
----------------------------------------------------------------------------
Funds from operations(2)
(in thousands) $ 27,865 $ 21,592 29%
----------------------------------------------------------------------------
Net Income (loss) per unit $ 0.23 $ (0.78) N/A
----------------------------------------------------------------------------
Average sales price realized per boe $ 73.09 $ 48.99 49%
----------------------------------------------------------------------------
Royalties per boe $ 19.19 $ 8.00 140%
----------------------------------------------------------------------------
Production expense per boe $ 16.64 $ 13.90 20%
----------------------------------------------------------------------------
Transportation expense per boe $ 0.28 $ 0.27 4%
----------------------------------------------------------------------------
Operating netback(2) per boe $ 36.98 $ 26.82 38%
----------------------------------------------------------------------------
G&A expense per boe $ 3.79 $ 3.79 -
----------------------------------------------------------------------------
Cash interest expense per boe $ 3.82 $ 4.86 (21%)
----------------------------------------------------------------------------
Other cash costs (0.57) (0.17) N/A
----------------------------------------------------------------------------
Cash flow netback(2) per boe $ 29.94 $ 18.34 61%
----------------------------------------------------------------------------
(1) Excludes unrealized mark to market gain or loss.(2) Funds from operations, operating netback and cash flow netback are
non-GAAP financial measures. Refer to "Non- GAAP Terms" in the Trust's
Management's Discussion and Analysis ("MD&A").
Revised 2008 Outlook
- Enterra continues to target 100 percent replacement of reserves produced in 2008. However, low commodity prices at year end compared with pricing levels seen during much of 2008 may lead to a lower reserve life across Enterra's portfolio and make this target challenging to achieve.
- Average daily production target for 2008 is in the range of 9,700 - 10,300 boe per day (an increase of 500 boe per day from previous guidance), with a year end exit rate of between 9,600 - 10,100 boe per day (an increase of 600 boe per day from previous guidance).
- 2008 capital program is revised upward from previously announced $38 million budget to $43 million.
- During the fourth quarter of 2008, the Trust anticipates drilling 15 wells (7.2 net), in addition to the 26 (9.5 net) wells drilled year-to-date.
- Objective to achieve a bank debt level of between $95 million and $100 million drawn on $135 million senior credit facility by year end.
The Trust's complete unaudited consolidated financial statements, accompanying notes and MD&A for the quarter are available on Enterra's website at www.enterraenergy.com, on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml.
Enterra will host a conference call and webcast Tuesday, November 18, 2008 at 9:00 a.m. MT (11:00 a.m. ET) to discuss the Trust's third quarter 2008 results. To access the call, please dial 866-225-6564 or 416-641-6119. A live audio webcast of the conference call will be available on the home page of Enterra's website at www.enterraenergy.com. A replay of the conference call will be available until 11:59 p.m. MT, November 25, 2008. The replay may be accessed on Enterra's website in the Investor Relations section, or by dialing 800-408-3053 or 416-695-5800, followed by passcode 3274574#.
About Enterra Energy Trust
Enterra is an exploration and production oil and gas trust based in Calgary, Alberta, Canada with its United States operations office located in Oklahoma City, Oklahoma. Enterra's trust units are listed on the Toronto Stock Exchange (ENT.UN) and the New York Stock Exchange (ENT). The Trust portfolio of oil and gas properties is geographically diversified with producing properties located principally in Alberta, British Columbia, Saskatchewan and Oklahoma. Production is comprised of approximately 63 percent natural gas and 37 percent crude oil and natural gas liquids. Enterra has compiled a multi-year drilling inventory for its properties.
Barrels of Oil Equivalent
Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Forward-Looking Statements
Certain information in this press release constitutes forward-looking statements under applicable securities law. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may," "should," "anticipate," "expects," "seeks" and similar expressions. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with oil and gas production; marketing and transportation; loss of markets; volatility of commodity prices; currency and interest rate fluctuations; imprecision of reserve estimates; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions or dispositions; inability to access sufficient capital from internal and external sources; changes in legislation, including but not limited to income tax, environmental laws and regulatory matters. Readers are cautioned that the foregoing list of factors is not exhaustive.
Readers are cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
Additional information on these and other factors that could affect Enterra's operations or financial results are included in Enterra's reports on file with Canadian and U.S. securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), the SEC's website (www.sec.gov), Enterra's website (www.enterraenergy.com) or by contacting Enterra. Furthermore, the forward looking statements contained in this news release are made as of the date of this news release, and Enterra does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.
Contacts:
Enterra Energy Trust
Kristin Mason
Investor Relations Coordinator
(403) 263-0262 or Toll Free 1-877-263-0262
Email: info@enterraenergy.com
Website: www.enterraenergy.com
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- Report of Foreign Issuer (6-K)
Date : 11/18/2008 @ 4:42PM
Source : Edgar (US Regulatory)
Stock : (ENT)
Quote : 0.5001 -0.001 (-0.20%) @ 11:34AM
- Report of Foreign Issuer (6-K)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934
For the month of November 2008
Commission File Number: 0-32115
Enterra Energy Trust
(Translation of registrant's name into English)
2600, 500-4 th Avenue S.W.
Calgary, Alberta T2P 2V6
Canada
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F Form 40-F ___X__
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes _____ No X
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes _____ No X
Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes _____ No X
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b):
The documents attached as Exhibit 99.1 to this 6-K shall be incorporated by reference into the Registration Statements under the Securities Act of 1933 on Form F-10 Registration Statement (No. 333-129601), the registration statement on Form S-8 (No. 333-120996) and the Registration Statements on Form F-3 (Nos. 333-113609 and 333-115318).
The Issuer is filing material documents not previously filed.
--------------------------------------------------------------------------------
TABLE OF CONTENTS
The following documents are filed as part of this Form 6-K:
Exhibit
Description
99.1
News Release
--------------------------------------------------------------------------------
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: November 18, 2008
Enterra Energy Trust
By: /s/ Blaine Boercher
Name:
Blaine Boerchers
Title:
Chief Financial Officer
--------------------------------------------------------------------------------
EXHIBIT INDEX
Exhibit
Description
99.1
News Release
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Enterra Energy Trust Provides Operational and Financial Guidance for 2009
Date : 11/18/2008 @ 8:00AM
Source : MarketWire
Stock : Enterra Energy Trust (ENT)
Quote : 0.5001 -0.001 (-0.20%) @ 11:34AM
Enterra Energy Trust Provides Operational and Financial Guidance for 2009
CALGARY, ALBERTA -- (Marketwire) -- 11/18/08 -- Enterra Energy Trust ("Enterra" or the "Trust") has developed its operational and financial guidance for 2009.
Planning for the year ahead has been challenging given the volatile state of commodity and currency markets. However, for the 2009 budget and operational approach, Enterra's management team adopted pricing assumptions of US$70 per bbl WTI oil, US$7 per mmbtu NYMEX natural gas and CAD$7 per GJ AECO natural gas, with an exchange rate of US$0.85 to CAD$1.00. These parameters are similar to the current forward prices and rates available at this time, although these market-based expectations are also very volatile.
Enterra's capital expenditure budget for 2009 has been set at approximately $60 million. This will be focused towards maintaining or slightly growing daily production levels, compared with Q3 production of approximately 10,100 boe per day. Enterra is again targeting a 100 percent replacement of reserve volumes in 2009.
Based on the 2009 budget, cash flows are anticipated to be adequate to fund a $60 million capital budget, but will not be sufficient to provide for either significant debt reduction or for sustainable distributions. Debt reduction will continue to be Enterra's second priority after its capital expenditure program. Consequently, the Trust does not foresee the resumption of distribution payments to unitholders during the upcoming year.
Enterra will maintain the same focus and discipline in its operations. The conservative goals established for 2009 are based on a fiscally prudent planning approach. The Enterra team is committed to effective implementation of its business plan which aims to preserve and build value in the Trust, while living within its financial means.
About Enterra Energy Trust
Enterra is an exploration and production oil and gas trust based in Calgary, Alberta, Canada with its United States operations office located in Oklahoma City, Oklahoma. Enterra's trust units are listed on the Toronto Stock Exchange (TSX: ENT.UN) and the New York Stock Exchange (NYSE: ENT). The Trust portfolio of oil and gas properties is geographically diversified with producing properties located principally in Alberta, British Columbia, Saskatchewan and Oklahoma. Production is comprised of approximately 63 percent natural gas and 37 percent crude oil and natural gas liquids. Enterra has compiled a multi-year drilling inventory for its properties.
Barrels of Oil Equivalent
Barrels of oil equivalent ("boe") may be misleading, particularly if used in isolation. A boe conversion ratio of six thousand cubic feet of natural gas to one barrel of oil is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead.
Forward-Looking Statements
Certain information in this press release constitutes forward-looking statements under applicable securities law. Any statements that are contained in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may," "should," "anticipate," "expects," "seeks" and similar expressions. Forward-looking statements necessarily involve known and unknown risks, including, without limitation, risks associated with oil and gas production; marketing and transportation; loss of markets; volatility of commodity prices; currency and interest rate fluctuations; imprecision of reserve estimates; environmental risks; competition; incorrect assessment of the value of acquisitions; failure to realize the anticipated benefits of acquisitions or dispositions; inability to access sufficient capital from internal and external sources; changes in legislation, including but not limited to income tax, environmental laws and regulatory matters. Readers are cautioned that the foregoing list of factors is not exhaustive.
Readers are cautioned not to place undue reliance on forward-looking statements as there can be no assurance that the plans, intentions or expectations upon which they are placed will occur. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
Additional information on these and other factors that could affect Enterra's operations or financial results are included in Enterra's reports on file with Canadian and U.S. securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com), the SEC's website (www.sec.gov), Enterra's website (www.enterraenergy.com) or by contacting Enterra. Furthermore, the forward looking statements contained in this news release are made as of the date of this news release, and Enterra does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by securities law.
Contacts:
Enterra Energy Trust
Kristin Mason
Investor Relations Coordinator
(403) 263-0262 or 1-877-263-0262
Email: info@enterraenergy.com
Website: www.enterraenergy.com
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Time to buy CPSL. JHO EOM
Net Revenue. Net revenue was $74,051,000 for the three months ended September 30, 2008, compared to $40,536,000 for the three months ended September 30, 2007, an increase of $33,515,000, or 83%. The tonnage sales of cleaned coal increased approximately 111,000 MT, or 23%, from approximately 492,000 MT for the three months ended September 30, 2007 to approximately 603,000 MT for the three months ended September 30, 2008. The selling price of cleaned coal increased approximately $32 or 35%, from approximately $91 (after adjusting for RMB appreciation against USD over this period) per ton for the three months ended September 30, 2007 to approximately $123 per ton for the three months ended September 30, 2008. The increase in the tonnage sales and selling price of cleaned coal were the primary reasons for the increase in our net revenue. The increase in tonnage sales was primarily due to increased orders of cleaned coal from existing and new customers for the three months ended September 30, 2008 as a result of the increase in the general demand for high-grade coking coal in China, which was largely driven by the demand of steel production, which is a key component of rail systems, bridges, ports, airports, construction projects and car production spearheading China's economic growth and the increased demand for steel directly causes the increased demand for the cleaned high-grade metallurgical coking coal, which we sell. There was a significant surge in the price of raw coal and cleaned coal in the third quarter of 2008 due to increase in demand.
Our cash balance was $39,429,000 as of September 30, 2008. We believe that our cash will be adequate to satisfy our anticipated cash requirements for fiscal 2008, including payment of the principal and interest on the notes, requirements to maintain current operations, complete projects already underway and achieve stated objectives or plans, commitment for capital or other expenditure and other reasonably likely future needs. Cash requirements for our long-term business needs, including the funding of capital expenditure and debt service for outstanding financings, are expected to be financed by a combination of internally generated funds, the proceeds from the sale of our securities, borrowings and other external financing sources, etc., although adequate financing may not be available to us on acceptable terms when we need it. Our opinion concerning our liquidity is based on current information. If the current information proves to be inaccurate, or if circumstances change, we may not be able to meet our cash needs
Gross Profit. Gross profit was $10,190,000 for the three months ended September 30, 2008, compared to $6,655,000 for the three months ended September 30, 2007, an increase of $3,535,000, or 53%. Gross profit margins for the three months ended September 30, 2008 and 2007 were 14% and 16%, respectively. Such decrease in gross profit margins was primarily due to an increase in average purchase price of raw coal across the three months ended September 30, 2008, which was not entirely offset by the increase in cleaned coal price during this period.