x
|
REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
Delaware
|
|
|
87-0700927
|
(State
or other jurisdiction of
incorporation
or organization)
|
|
|
(I.R.S.
Employer Identification No.)
|
Large
accelerated filer ¨
|
Accelerated
filer ¨
|
Non-accelerated
filer ¨
(Do not check if a smaller reporting company)
|
Smaller
reporting company þ
|
ASSETS
|
|||||||
March
31,
|
|||||||
2008
|
December
31,
|
||||||
(Unaudited)
|
2007
|
||||||
CURRENT
ASSETS
|
|||||||
Cash
and cash equivalents
|
$
|
210,002
|
$
|
1,149,140
|
|||
Restricted
cash
|
3,560,138
|
1,367,222
|
|||||
Accounts
receivable, net of allowance for doubtful accounts of $3,456 and
$3,701 as
of March 31, 2008 and December 31, 2007, respectively
|
10,299,845
|
11,401,367
|
|||||
Inventories
|
4,198,644
|
3,293,529
|
|||||
Notes
receivable, net of discount of $91,326 as of March 31,
2008
|
1,857,266
|
47,853
|
|||||
Other
receivables
|
85,138
|
416,454
|
|||||
Deposit
for acquisition
|
12,270,859
|
12,270,859
|
|||||
Prepayments
and prepaid expenses
|
-
|
17,774
|
|||||
Due
from employees
|
35,087
|
9,932
|
|||||
Discontinued
operation
|
13,544,938
|
14,158,890
|
|||||
Total
Current Assets
|
46,061,917
|
44,133,020
|
|||||
LONG-TERM
ASSETS
|
|||||||
Plant
and equipment, net
|
10,499,108
|
10,427,176
|
|||||
Land
use rights, net
|
382,800
|
385,539
|
|||||
Construction
in progress
|
1,376,802
|
1,321,832
|
|||||
Discontinued
operation
|
494,744
|
506,526
|
|||||
Deferred
taxes
|
445,801
|
405,006
|
|||||
Total
Long-Term Assets
|
13,199,255
|
13,046,079
|
|||||
TOTAL
ASSETS
|
$
|
59,261,172
|
$
|
57,179,099
|
LIABILITIES
AND SHAREHOLDERS’ EQUITY
|
|||||||
March
31,
|
|||||||
2008
|
December
31,
|
||||||
(Unaudited)
|
2007
|
||||||
CURRENT
LIABILITIES
|
|||||||
Accounts
payable
|
$
|
6,492,357
|
$
|
6,333,057
|
|||
Other
payables and accrued expenses
|
351,352
|
378,675
|
|||||
Short-term
bank loans
|
21,594,781
|
20,869,862
|
|||||
Customer
deposits
|
271,407
|
483,320
|
|||||
Notes
payable
|
2,250,007
|
1,476,600
|
|||||
Due
to employees
|
57,895
|
310
|
|||||
Due
to related party
|
90,709
|
-
|
|||||
Discontinued
operation
|
13,655,346
|
14,296,572
|
|||||
Total
Current Liabilities
|
44,763,854
|
43,838,396
|
|||||
LONG-TERM
LIABILITIES
|
|||||||
Discontinued
operation
|
2,651
|
2,651
|
|||||
Deferred
taxes
|
296,511
|
296,511
|
|||||
Total
Long-Term Liabilities
|
299,162
|
299,162
|
|||||
TOTAL
LIABILITIES
|
45,063,016
|
44,137,558
|
|||||
CONTINGENCIES
|
|||||||
SHAREHOLDERS’
EQUITY
|
|||||||
Common
stock, $0.001 par value; 100,000,000 shares authorized; 19,961,000
and
19,961,000 shares issued and outstanding at March 31, 2008 and December
31, 2007, respectively
|
19,961
|
19,961
|
|||||
Additional
paid-in capital
|
7,138,105
|
7,138,105
|
|||||
Retained
earnings (the restricted portion is $523,083 at March 31,
2008)
|
6,235,295
|
5,125,120
|
|||||
Accumulated
other comprehensive income
|
804,795
|
758,355
|
|||||
TOTAL
SHAREHOLDERS’ EQUITY
|
14,198,156
|
13,041,541
|
|||||
TOTAL
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$
|
59,261,172
|
$
|
57,179,099
|
Three
Months
Ended
March
31, 2008
|
Three
Months
Ended
March
31, 2007
|
||||||
REVENUES,
NET
|
$
|
9,487,285
|
$
|
5,376,977
|
|||
COST
OF GOODS SOLD
|
(7,305,277
|
)
|
(4,403,741
|
)
|
|||
GROSS
PROFIT
|
2,182,008
|
973,236
|
|||||
General
and administrative
|
279,120
|
141,594
|
|||||
Selling
and marketing
|
215,776
|
80,761
|
|||||
Research
and development
|
46,610
|
11,978
|
|||||
INCOME
FROM CONTINUING OPERATIONS
|
1,640,502
|
738,903
|
|||||
Interest
expense, net
|
(615,540
|
)
|
(134,632
|
)
|
|||
Government
grants
|
23,381
|
-
|
|||||
Forfeiture
of customer deposits
|
-
|
265,789
|
|||||
Other
income, net
|
21,711
|
218
|
|||||
INCOME
FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
1,070,054
|
870,278
|
|||||
INCOME
TAX BENEFIT
|
39,965
|
-
|
|||||
NET
INCOME FROM CONTINUING OPERATIONS
|
1,110,019
|
870,278
|
|||||
DISCONTINUED
OPERATION
|
|||||||
Income
from discontinued operation
|
157
|
70,840
|
|||||
GAIN
FROM DISCONTINUED OPERATION
|
157
|
70,840
|
|||||
NET
INCOME
|
1,110,176
|
941,118
|
|||||
OTHER
COMPREHENSIVE INCOME
|
|||||||
Foreign
currency translation gain
|
46,440
|
91,058
|
Three
Months Ended March 31, 2008
|
Three
Months Ended March 31, 2007
|
||||||
COMPREHENSIVE
INCOME
|
$
|
1,156,616
|
$
|
1,032,176
|
|||
WEIGHTED
AVERAGE SHARES OUTSTANDING BASIC AND DILUTED
|
19,961,000
|
12,000,000
|
|||||
NET
INCOME PER COMMON SHARE, BASIC AND DILUTED
|
$
|
0.06
|
$
|
0.09
|
|
|||||||
Three
Months Ended March 31,
|
|||||||
2008
|
2007
|
||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
|
|||||||
Net
income
|
$
|
1,110,176
|
$
|
941,118
|
|||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
|||||||
Depreciation
and amortization
|
362,750
|
241,791
|
|||||
Deferred
taxes
|
(40,795
|
)
|
-
|
||||
Forfeiture
of customer deposits
|
-
|
(265,789
|
)
|
||||
Changes
in operating assets and liabilities:
|
|||||||
(Increase)
Decrease In:
|
|||||||
Accounts
receivable
|
1,101,521
|
(955,355
|
)
|
||||
Inventories
|
(905,114
|
)
|
699,127
|
||||
Other
receivables
|
331,315
|
(28,332
|
)
|
||||
Due
to employees
|
32,431
|
-
|
|||||
Prepayments
and prepaid expenses
|
17,774
|
96,199
|
|||||
Discontinued
operation
|
(1,166,257
|
)
|
34,333
|
||||
Increase
(Decrease) In:
|
|||||||
Accounts
payable
|
159,300
|
(561,204
|
)
|
||||
Other
payables and accrued liabilities
|
(27,323
|
)
|
53,219
|
||||
Discontinued
operation
|
1,571,810
|
11,433,523
|
|||||
Customer
deposits
|
(211,914
|
)
|
1,035,946
|
||||
Net
cash provided by operating activities
|
2,335,674
|
12,724,576
|
|||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
|
|||||||
Purchases
of plant and equipment
|
(611,471
|
)
|
(181,249
|
)
|
|||
Purchases
of construction in progress
|
(55,351
|
)
|
(160,234
|
)
|
|||
Deposit
for acquisition
|
-
|
646,479
|
|||||
Due
from employees
|
-
|
171,608
|
|||||
Issuances
of notes receivable
|
(1,859,256
|
)
|
(4,902,596
|
)
|
|||
Repayments
of notes receivable
|
49,842
|
347,571
|
|||||
Discontinued
operation
|
11,782
|
17,465
|
|||||
Net
cash used in investing activities
|
(2,464,454
|
)
|
(4,060,956
|
)
|
|||
CASH
FLOWS FROM FINANCING ACTIVITIES:
|
|||||||
Restricted
cash
|
(2,192,916
|
)
|
-
|
||||
Discontinued
operation
|
(432,827
|
)
|
(11,562,911
|
)
|
|||
Proceeds
from short term bank loans
|
9,776,805
|
5,581,834
|
|||||
Repayment
of short term bank loans
|
(9,051,887
|
)
|
(2,920,005
|
)
|
|||
Proceeds
from notes payable
|
1,485,435
|
440,036
|
|||||
Repayment
of notes payable
|
(712,027
|
)
|
(13,621
|
)
|
|||
Repayment
of advances to related parties
|
90,709
|
17,288
|
|||||
Net
cash used in financing activities
|
(1,036,708
|
)
|
(8,457,379
|
)
|
|||
Three
Months Ended March 31,
|
|||||||
2008
|
2007
|
||||||
(DECREASE)
INCREASE IN CASH AND CASH EQUIVALENTS
|
(1,165,488
|
)
|
206,241
|
||||
Effect
of exchange rate changes on cash
|
226,350
|
4,936
|
|||||
Cash
and cash equivalents at beginning of period
|
1,149,140
|
365,567
|
|||||
CASH
AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
210,002
|
$
|
576,744
|
|||
SUPPLEMENTARY
CASH FLOW INFORMATION
|
|||||||
Income
taxes paid
|
$
|
-
|
$
|
226,507
|
|||
Interest
paid
|
$
|
439,961
|
$
|
2,967
|
|||
SUPPLEMENTAL
NON-CASH DISCLOSURES:
|
|||||||
1.
During the three months ended March 31, 2008 and 2007, $380 and $11,946
were transferred from construction in progress to plant and equipment,
respectively.
|
|||||||
2. Customer
deposits of $0 and $265,789 were forfeited in the three months ended
March
31, 2008 and 2007, respectively.
|
(i)
|
Continental
Development Ltd. (100% subsidiary of the
Company)
|
(ii)
|
Zhejiang
Kandi Vehicles Co. Ltd. (“Zhejiang Kandi”) (100% subsidiary of
Continental)
|
(iii)
|
Zhejiang
Yongkong Import and Export Co. Ltd. (“Dingji”) (100%
subsidiary of Zhejiang Kandi)
|
Sales
|
|
|||||
Major
Customers
|
For
the Three Months Ended March 31, 2008
|
For
the Three Months Ended March 31, 2007
|
Accounts
Receivable
|
|||
March
31, 2008
|
December
31, 2007
|
|||||
Company
A
|
31%
|
27%
|
26%
|
40%
|
||
Company
B
|
23%
|
22%
|
20%
|
19%
|
||
Company
C
|
13%
|
19%
|
12%
|
11%
|
||
Company
D
|
12%
|
15%
|
12%
|
8%
|
||
Company
E
|
6%
|
-
|
5%
|
7%
|
Purchases
|
||||||
Major
Suppliers
|
For
the Three Months Ended March 31, 2008
|
For
the Three Months Ended March 31, 2007
|
Accounts
Payable
|
|||
March
31, 2008
|
December
31, 2007
|
|||||
Company
F
|
7%
|
35%
|
7%
|
7%
|
||
Company
G
|
8%
|
9%
|
5%
|
6%
|
||
Company
H
|
4%
|
16%
|
4%
|
5%
|
||
Company
I
|
4%
|
8%
|
4%
|
5%
|
||
Company
J
|
4%
|
-
|
4%
|
4%
|
March
31, 2008
|
December
31, 2007
|
March
31,
2007
|
|||
Period
end RMB : US$ exchange rate
|
7.0222
|
7.3141
|
7.7342
|
||
Average
period RMB : US$ exchange rate
|
7.1682
|
7.5614
|
7.7715
|
March
31,
2008
|
December
31,
2007
|
||||||
(Unaudited)
|
|||||||
Raw
materials
|
$
|
814,327
|
$
|
1,534,448
|
|||
Work-in-progress
|
3,127,152
|
1,402,073
|
|||||
Finished
goods
|
257,165
|
357,008
|
|||||
Total
inventories
|
$
|
4,198,644
|
$
|
3,293,529
|
March
31,
2008
|
December
31,
2007
|
||||||
(Unaudited)
|
|||||||
Notes
receivable from unrelated companies:
|
|||||||
Due
June 27, 2008
|
$
|
-
|
$
|
47,853
|
|||
Due
March 2, 2009
|
640,673
|
-
|
|||||
Due
January 1, 2009
|
184,842
|
-
|
|||||
Due
March 31, 2008 (subsequently settled on its due date)
|
633,825
|
-
|
|||||
Due
March 31, 2008 (subsequently settled on its due date)
|
489,252
|
-
|
|||||
Subtotal
|
1,948,592
|
47,853
|
|||||
Notes
receivable-discount
|
(91,326
|
)
|
-
|
||||
Notes
receivable net
|
$
|
1,857,266
|
$
|
47,853
|
March
31, 2008
|
December
31,
2007
|
||||||
(Unaudited)
|
|||||||
Cost
of land use rights
|
$
|
460,943
|
$
|
460,943
|
|||
Less:
accumulated amortization
|
(78,143
|
)
|
(75,404
|
)
|
|||
Land
use rights, net
|
$
|
382,800
|
$
|
385,539
|
2008
with one year
|
$
|
8,388
|
||
2009
|
11,183
|
|||
2010
|
11,183
|
|||
2011
|
11,183
|
|||
2012
|
11,183
|
|||
Thereafter
|
329,680
|
|||
Total
|
$
|
382,800
|
March
31,
2008
|
December
31,
2007
|
||||||
(Unaudited)
|
|||||||
At
cost:
|
|||||||
Buildings
|
$
|
4,074,937
|
$
|
3,911,944
|
|||
Machinery
and equipment
|
8,930,520
|
8,572,451
|
|||||
Office
equipment
|
101,617
|
93,840
|
|||||
Transportation
|
265,480
|
254,885
|
|||||
Patterns
|
1,814,542
|
1,742,125
|
|||||
15,187,096
|
14,575,245
|
||||||
Less:
Accumulated depreciation
|
|||||||
Buildings
|
(480,618
|
)
|
(428,834
|
)
|
|||
Machinery
and equipment
|
(3,891,058
|
)
|
(3,520,084
|
)
|
|||
Office
equipment
|
(71,989
|
)
|
(64,427
|
)
|
|||
Transportation
|
(58,857
|
)
|
(43,765
|
)
|
|||
Patterns
|
(185,466
|
)
|
(90,959
|
)
|
|||
(4,687,988
|
)
|
(4,148,069
|
)
|
||||
Plant
and equipment, net
|
$
|
10,499,108
|
$
|
10,427,176
|
March
31,
2008
|
December
31,
2007
|
||||||
(Unaudited)
|
|||||||
Loans
from ICBC-Exploration Zone Branch
|
|||||||
Monthly
interest only payments at 7.88% per annum, due April 10, 2008, secured
by
the assets owned by the Company. Also
see Notes 12 and 13. (subsequently repaid on its due date)
|
$
|
712,028
|
$
|
683,611
|
|||
Monthly
interest only payments at 7.88% per annum, due June 5, 2008, secured
by
the assets owned by the Company. Also
see Notes 12 and 13.
|
712,028
|
683,611
|
|||||
Monthly
interest only payments at 8.75% per annum, due September 5, 2008,
secured
by the assets owned by the Company. Also see Notes 12 and
13.
|
427,216
|
410,167
|
|||||
Monthly
interest only payments at 8.75% per annum, due September 5, 2008,
secured
by the assets owned by the Company. Also see Notes 12 and
13.
|
384,495
|
369,150
|
|||||
Monthly
interest only payments at 8.75% per annum, due October 10, 2008,
secured
by the assets owned by the Company. Also see Notes 12 and
13.
|
427,216
|
410,167
|
|||||
Monthly
interest only payments at 8.75% per annum, due October 16, 2008,
secured
by the assets owned by the Company. Also see Notes 12 and
13.
|
541,141
|
519,544
|
|||||
Monthly
interest only payments at 8.75% per annum, due October 23, 2008,
secured
by the assets owned by the Company. Also see Notes 12 and
13.
|
498,419
|
478,528
|
|||||
Monthly
interest only payments at 8.75% per annum, due November 24, 2008,
secured
by the assets owned by the Company. Also see Notes 12 and
13.
|
569,623
|
546,889
|
|||||
Monthly
interest only payments at 8.28% per annum, due September 17, 2008,
secured
by the assets owned by the Company. Also see Notes 12 and
13.
|
640,825
|
-
|
March
31,
2008
|
December
31,
2007
|
||||||
(Unaudited)
|
|||||||
Loans
from Commercial Bank-Jiangnan Branch
|
|||||||
Monthly
interest only payments at 7.58 % per annum, due January 10, 2008,
secured
by the assets owned by the Company. Also see Notes 12 and 13.
(subsequently repaid on its due date)
|
-
|
2,734,444
|
|||||
Monthly
interest only payments at 7.67 % per annum, due May 10, 2008, guaranteed
by the assets owned by the Company. Also see Notes 12 and 13.
(subsequently repaid on its due date)
|
1,424,055
|
1,367,222
|
|||||
Monthly
interest only payments at 8.22% per annum, due January 10, 2009 secured
by
the assets owned by the Company. Also see Notes 12 and 13.
|
2,848,110
|
-
|
|||||
Loans
from ICBC-Jinhua Branch
|
|||||||
Monthly
interest only payments at 6.88% per annum, due January 18, 2008,
secured
by the assets owned by the Company. Also see Notes 12 and 13.
(subsequently repaid on its due date)
|
-
|
189,753
|
|||||
Monthly
interest only payments at 6.58% per annum, due February 1, 2008,
secured
by the assets owned by the Company. Also see Notes 12 and 13.
(subsequently repaid on its due date)
|
-
|
948,766
|
|||||
Monthly
interest only payments at 6.88% per annum, due March 3, 2008, secured
by
the assets owned by the Company. Also see Notes 12 and 13. (subsequently
repaid on its due date)
|
-
|
858,883
|
|||||
Monthly
interest only payments at 7.88% per annum, due March 21, 2008, secured
by
the assets owned by the Company. Also see Notes 12 and 13. (subsequently
repaid on its due date)
|
-
|
1,098,571
|
|||||
Monthly
interest only payments at 7.88% per annum, due April 16, 2008, secured
by
the assets owned by the Company. Also see Notes 12 and 13. (subsequently
repaid on its due date)
|
1,030,000
|
-
|
|||||
Monthly
interest only payments at 7.88% per annum, due May 21, 2008, secured
by
the assets owned by the Company. Also see Notes 12 and 13.
|
700,000
|
-
|
March
31,
2008
|
December
31,
2007
|
||||||
(Unaudited)
|
|||||||
Loans
from Huaxia Bank
|
|||||||
Monthly
interest only payments at 9.86% per annum, due December 24, 2008.
Guaranteed by Yongkang Tangxian Colour Metal Die-casting
Company.
|
2,848,110
|
2,734,444
|
|||||
Monthly
interest only payments at 7.84% per annum, due October 1, 2008. And
secured by the assets owned by the Company. Guaranteed by Nanlong
Group
Co.,Ltd & Zhejiang Mengdeli Electric Company. Also see Notes 12 and
13.
|
2,848,110
|
-
|
|||||
Loans
from China Everybright Bank
|
|||||||
Monthly
interest only payments at 8.22% per annum, due August 9, 2008. And
secured
by the assets owned by the Company. Guaranteed by Nanlong Group Co.,Ltd
& Zhejiang Mengdeli Electric Company. Also see Notes 12 and
13.
|
4,271,377
|
4,101,668
|
|||||
Monthly
interest only payments at 8.96% per annum, due February 18, 2009.
And
secured by the assets owned by the Company. Guaranteed by Nanlong
Group
Co.,Ltd & Zhejiang Mengdeli Electric Company. Also see Notes 12 and
13.
|
712,028
|
-
|
|||||
Loans
from Shanghai Pudong Development Bank
|
|||||||
Monthly
interest only payments at 6.33 % per annum, due February 14, 2008,
secured
by the assets owned by the Company. Also see Notes 12 and 13.
(subsequently repaid on its due date)
|
-
|
2,734,444
|
|||||
Total
|
$
|
21,594,781
|
$
|
20,869,862
|
March
31,
2008
|
December
31,
2007
|
||||||
(Unaudited)
|
|||||||
Notes
payable to unrelated companies:
|
|||||||
Due
April 17, 2008 (subsequently repaid on its due date)
|
$
|
712,028
|
$
|
683,611
|
|||
Due
September 19, 2008
|
1,424,055
|
683,611
|
|||||
Due
November 18, 2008
|
113,924
|
109,378
|
|||||
Total
|
$
|
2,250,007
|
$
|
1,476,600
|
March
31,
2008
|
December
31,
2007
|
||||||
(Unaudited)
|
|||||||
Due
April 17, 2008 (subsequently repaid on its due date)
|
712,028
|
683,611
|
|||||
Due
September 19, 2008
|
1,424,055
|
683,611
|
|||||
Due
November 18, 2008
|
1,424,055
|
-
|
|||||
Total
|
$
|
3,560,138
|
$
|
1,367,222
|
For
the Three Months Ended
March
31,
(Unaudited)
|
|||||||
2008
|
2007
|
||||||
Current:
|
|||||||
Provision
for CIT
|
$
|
-
|
$
|
39,876
|
|||
Deferred:
|
|||||||
Provision
for CIT
|
(39,965
|
)
|
(4,984
|
)
|
|||
Income
tax (benefit) expense
|
$
|
(39,965
|
)
|
$
|
34,892
|
For
the Three Months Ended
March
31,
(Unaudited)
|
|||||||
2008
|
2007
|
||||||
Computed
“expected” expense
|
$
|
267,514
|
$
|
287,129
|
|||
Permanent
difference
|
(58,291
|
)
|
45,503
|
|
|||
Tax
exemption
|
(249,188
|
)
|
(332,695
|
)
|
|||
Income
tax (benefit) expense
|
$
|
(39,965
|
)
|
$
|
-
|
March
31,
2008
|
December
31, 2007
|
||||||
(Unaudited)
|
|||||||
Deferred
tax assets:
|
|||||||
Non-current
portion:
|
|||||||
Depreciation
|
735,306
|
694,512
|
|||||
Valuation
allowance
|
(289,505
|
)
|
(289,506
|
)
|
|||
Subtotal
|
445,801
|
405,006
|
|||||
Total
deferred tax assets
|
445,801
|
405,006
|
|||||
Deferred
tax liabilities:
|
|||||||
Non-current
portion:
|
|||||||
Accumulated
other comprehensive (gain) loss
|
(296,511
|
)
|
(296,511
|
)
|
|||
Subtotal
|
(296,511
|
)
|
(296,511
|
)
|
|||
Total
deferred tax liabilities
|
(296,511
|
)
|
(296,511
|
)
|
|||
Net
deferred tax assets (liabilities)
|
$
|
149,290
|
$
|
108,495
|
(a)
|
In
2006, the Company brought a legal action against Weifang Rongda Automobile
Trading Co., Ltd. for returned goods that were damaged. As the plaintiff,
the Company has claimed for compensation. According to the judge's
report
from the local court in Jinhua, PRC, on December 8, 2006, the
Company prevailed in the lawsuit and Weifang Rongda Automobile
Trading Co., Ltd. was required to pay approximately $26,408 as
compensation to the Company. However, the defendant appealed the
ruling to
a higher level court and the Company has not received the compensation
as
of April 30, 2008. Considering the uncertainties of the legal proceeding,
the Company did not record a contingent gain for this at March 31,
2008.
|
Pro
Forma Combined
(Unaudited)
|
|||||||
REVENUES
|
$
|
9,487,285
|
|||||
GROSS
PROFIT
|
$
|
2,182,008
|
|||||
INCOME
FROM OPERATIONS
|
$
|
1,640,502
|
|||||
NET
INCOME
|
$
|
1,110,176
|
|||||
NET
INCOME PER SHARE
BASIC
AND DILUTED
|
$
|
0.06
|
For
the Three Months Ended March 31, 2008
|
%
of Revenue
|
For
the Three Months Ended March 31, 2007
|
%
of Revenue
|
Change
in Amount
|
Change
in
%
|
||||||||||||||
REVENUES
|
$
|
9,487,285
|
100.0
|
%
|
$
|
5,376,977
|
100.0
|
%
|
$
|
4,110,308
|
76.4
|
%
|
|||||||
COST
OF GOODS SOLD
|
7,305,277
|
77.0
|
%
|
4,403,741
|
81.9
|
%
|
2,901,536
|
65.9
|
%
|
||||||||||
GROSS
PROFIT
|
2,182,008
|
23.0
|
%
|
973,236
|
18.1
|
%
|
1,208,772
|
124.2
|
%
|
||||||||||
Selling
and Marketing
|
215,776
|
2.3
|
%
|
80,761
|
1.5
|
%
|
135,015
|
167.2
|
%
|
||||||||||
General
and Administrative
|
279,120
|
2.9
|
%
|
141,594
|
2.6
|
%
|
137,526
|
97.1
|
%
|
||||||||||
Research
and Development
|
46,610
|
0.5
|
%
|
11,978
|
0.2
|
%
|
34,632
|
289.1
|
%
|
||||||||||
INCOME
FROM CONTINUING OPERATIONS
|
1,640,502
|
17.3
|
%
|
738,903
|
13.7
|
%
|
901,599
|
122.0
|
%
|
||||||||||
Government
Grants
|
23,381
|
0.2
|
%
|
-
|
0.0
|
%
|
23,381
|
100
|
%
|
||||||||||
Interest
Expense, Net
|
(615,540
|
)
|
(6.5
|
%)
|
(134,632
|
)
|
(2.5
|
%)
|
(480,908
|
)
|
357.2
|
%
|
|||||||
Forfeiture
of Customer Deposits
|
-
|
0.0
|
%
|
265,789
|
4.9
|
%
|
(265,789
|
)
|
(100.0
|
%)
|
|||||||||
Other
Income, Net
|
21,711
|
0.2
|
%
|
218
|
0.0
|
%
|
21,493
|
9,859.2
|
%
|
||||||||||
INCOME
FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
|
1,070,054
|
11.3
|
%
|
870,278
|
16.2
|
%
|
199,776
|
23.0
|
%
|
||||||||||
INCOME
TAX BENEFIT
|
39,965
|
0.4
|
%
|
-
|
0.0
|
%
|
39,965
|
100
|
%
|
||||||||||
NET
INCOME FROM CONTINUING OPERATIONS
|
1,110,019
|
11.7
|
%
|
870,278
|
16.2
|
%
|
239,741
|
27.5
|
%
|
||||||||||
INCOME
FROM DISCONTINUED OPERATION
|
157
|
0.0
|
%
|
70,840
|
1.3
|
%
|
(70,683
|
)
|
(99.8
|
%)
|
|||||||||
NET
INCOME
|
$
|
1,110,176
|
11.7
|
%
|
$
|
941,118
|
17.5
|
%
|
$
|
169,058
|
18.0
|
%
|
31.1
|
Certification
pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange
Act of
1934.
|
31.2
|
Certification
pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange
Act of
1934.
|
32.1
|
Certifications
of CEO and CFO Pursuant to 18 U.S.C. § 1350, as Adopted Pursuant to § 906
of the Sarbanes-Oxley Act of 2002.
|
Date:
May 15, 2008
|
By:
|
/s/ Hu Xiaoming |
|
|
|
Hu
Xiaoming
President
and Chief Executive Officer
|
|
|
|||
|
|
|
|
Date:
May 15, 2008
|
By:
|
/s/ Zhu Xiaoying |
|
|
|
Zhu
Xiaoying
Chief
Financial Officer
|
|