Results of Operations
The following
table sets forth information from our statements of operations for the years
ended December 31, 2008 and 2007, in dollars:
|
|
|
|
|
|
|
|
|
|
|
|
|
The Year Ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
75,765,428
|
|
$
|
34,177,415
|
|
|
|
|
Cost of
sales
|
|
$
|
58,431,799
|
|
$
|
27,829,973
|
|
|
|
|
Gross profit
|
|
$
|
17,333,629
|
|
$
|
6,347,440
|
|
|
|
|
Operating
expenses
|
|
$
|
2,849,292
|
|
$
|
724,935
|
|
|
|
|
Operating
income
|
|
$
|
14,484,337
|
|
$
|
5,622,507
|
|
|
|
|
Other income
|
|
$
|
73,856
|
|
$
|
197,253
|
|
|
|
|
Interest
expense
|
|
$
|
(687,659
|
)
|
$
|
(152,684
|
)
|
|
|
|
Net income
|
|
$
|
13,687,490
|
|
$
|
5,272,570
|
|
|
|
|
Comprehensive
income
|
|
$
|
14,595,559
|
|
$
|
5,755,501
|
|
|
|
|
YearEnded
December 31, 2008 Compared to Year Ended December 31, 2007
Net sales
During the
year ended December 31, 2008, we had net sales of $75.8 million, as compared
with net sales of $34.2 million during the year ended December 31, 2007, an
increase of approximately $41.6 million, or 122% due to our increased and
expanded sales both in volume and of new variety of products to our existing
and new customers
Cost of sales & gross margin
During the
year ended December 31, 2008, we had cost of sales of $58.4 million, as
compared with cost of sales of $27.8 million during the same period in 2007, an
increase of approximately $30.6 million, or 110%, reflecting the increase in
net sales. The gross profit rose to $17.3million 2007, or a 173% increase
during the year ended December 31, 2008 compared with $6.3 million during the
year ended December 31, 2007. Our gross margin increased from 18.6% during the
year ended December 31, 2007 to 22.9% during the year ended December 31, 2008.
The increase was mainly attributed to the significant increase of revenue
generated from higher margin products for automotive application.
Operating Expenses
Our operating
expenses were $2,849,292 during the
year ended December 31, 2008, compared with $724,935 during the year ended
December 31, 2007, an increase of $2,124,357 or approximately 293%. The
increase in operating expenses was principally due to the increased
depreciation expenses and payroll expenses. Selling expenses increased from
$131,772 during the year ended December 31, 2007 to $322,650 during the year
ended December 31, 2008 as we increased our efforts to obtain more customers.
General and administrative expenses increased from $403,834 during the year
ended December 31, 2007 to $1,747,648
the year ended December 31, 2008, reflecting the increased salary
expense, depreciation expense and other expenses pertinent to the reverse
merger and listing in the US. Research and development expenses were increased
during the year ended December 31, 2007 to the year ended December 31, 2008
reflecting our increased efforts in new product development by adding more researchers and increasing raw material
usage. As a result, our operating income increased to $14,484,337 during the
year ended December 31, 2008 from $5,622,507 during the year ended December 31,
2007.
22
Interest Expense
Interest
expense increased $534,975 from $152,684 during the year ended December 31,
2007 to $687,659 for the year ended December 31, 2008. The increase interest
expense resulted from the increase in our loans and notes payable during 2008,
as we borrowed to fund the rapid growth in our sales and the development of our
manufacturing facility.
Net Income
As a result of
the factors described above, we had net income of $13,687,490 during the year ended December 31, 2008,
compared with $5,272,570 during the year ended December 31, 2007.
Comprehensive Income
As a result of
a currency translation adjustment, our comprehensive income was $14,595,559
during the year ended December 31, 2008, compared with $5,755,501 during the
year ended December 31, 2007. The change is due to the significant currency
exchange fluctuation.
Liquidity and Capital Resources
As of December
31, 2008, we had $3,869,035 in cash and cash equivalents, compared to only
$87,455 on December 31, 2007. There was a net increase in cash and cash
equivalent of $3,781,580 for the year ended December 31, 2008. The net increase
in cash and cash equivalents for the period was mainly due to the increase in
our loans and notes payables.
Operations
For the year
ended December 31, 2008, cash used in operations was $4,874,185 as opposed to $1,914,643 generated in
operating activities for the year ended December 31, 2007. Decrease in our cash
liquidity is mainly due to our significant increased amounts in advance to
suppliers, inventory, account receivable and other receivables and decrease in
tax payable and account payable.
Investments
Cash used in
investing activities was $11,926,327 for the year ended December 31, 2008 as
compared to only $4,249,292 for the year ended December 31, 2007. We have
invested heavily in purchases of new production equipments, which accounted for
majority of the cash used in investing activities in 2008.
Financing
For the year
ended December 31, 2008, we have financed a total amount of $ 20,509,249 as
compared to $1,890,656 provided by financing activities for the year ended
December 31, 2007. Increase in cash provided by financing activities is due to
the increased funding from short term loans and related party loan in order to
fulfill increased sales orders from our customers.
The primary
sources of cash in 2008 were from financing activities. For the year ended
December 31, 2008, we have financed a total amount of $ 20,509,249. The Company
expects to complete an assets acquisition with an affiliated company by the end
of 2009. The company expects the funds for this investing activity will come
from outside financing.
23
Based on past
performance and current expectations, we believe our cash and cash equivalents
and cash generated from operations will satisfy our working capital needs,
capital expenditures (other than the Xinda High-Tech arrangement) and other
liquidity requirements associated with our operations for at least the next 12
months.
The majority
of the Companys revenues and expenses were denominated primarily in Renminbi
(RMB), the currency of the Peoples Republic of China. There is no assurance
that exchange rates between the RMB and the U.S. Dollar will remain stable. The
Company does not engage in currency hedging. Inflation has not had a material
impact on the Companys business.
Off-Balance
Sheet Arrangements
Neither us,
nor any of our subsidiaries has any off-balance sheet arrangements that have or
are reasonably likely to have a current or future effect on their financial
condition or results of operations.
|
|
Item 7A.
|
Quantitative and Qualitative Disclosures
About Market Risk
|
Not applicable.
|
|
Item 8.
|
Financial Statements and Supplementary Data
|
Our
consolidated financial statements for the year ended December 31, 2008 and 2007
are attached hereto.
24
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC)
FINANCIAL STATEMENTS
DECEMBER 31, 2008 & 2007
F-1
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC)
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
Report of
Independent Registered Public Accounting Firm
|
|
F-3
|
|
|
|
Consolidated
Balance Sheets at December 31, 2008 and 2007
|
|
F-4
|
|
|
|
Consolidated
Statements of income and other comprehensive income for the years ended
December 31, 2008 and 2007
|
|
F-5
|
|
|
|
Consolidated
Statements of Changes in Stockholders Equity for the years ended December
31, 2008 and 2007
|
|
F-6
|
|
|
|
Consolidated
Statements of Cash Flows for the years ended December 31, 2008 and 2007
|
|
F-7
|
|
|
|
Notes to
Consolidated Financial Statements
|
|
F-8F-25
|
F-2
REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
The Board of
Directors and Shareholders of
China XD Plastics Company Ltd
(Formerly NB Telecom, Inc)
We have
audited the accompanying consolidated balance sheets of China XD Plastics
Company Ltd (formerly NB Telecom, Inc) as of December 31, 2008 and 2007 and the
related consolidated statements of income and other comprehensive income,
changes in stockholders equity, and cash flows for the years ended December 31, 2008 and 2007. China XD
Plastics Company Ltds management is responsible for these consolidated
financial statements. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted
our audits in accordance with standards established by the Public Company
Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. The Company is not required to have, nor were we engaged
to perform, an audit of its internal control over financial reporting. Our
audits included consideration of internal control over financial reporting as a
basis for designing audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the effectiveness of the
Companys internal control over financial reporting. Accordingly, we express no
such opinion. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of China XD Plastics Company
Ltd as of December 31, 2008 and 2007 and the results of its operations, changes
in stockholders equity, and cash flows for the years ended December 31,
2008 and 2007 in conformity with accounting principles generally accepted in the
United States of America.
|
|
/s/Bagell Josephs, Levine & Company, LLC
|
|
|
|
Bagell
Josephs, Levine & Company, LLC
|
Marlton, New
Jersey
|
March 9, 2009
|
F-3
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2008 AND 2007
|
|
|
|
|
|
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
3,869,035
|
|
$
|
87,455
|
|
Restricted Cash
|
|
|
3,664,346
|
|
|
5,428,673
|
|
Notes Receivable
|
|
|
303,437
|
|
|
|
|
Accounts receivable - net of allowance for
bad debts of $99,669 and $93,219, respectively
|
|
|
11,234,507
|
|
|
5,117,840
|
|
Other receivables
|
|
|
21,917
|
|
|
6,360
|
|
Inventories
|
|
|
12,438,782
|
|
|
5,587,862
|
|
Prepaid expenses
|
|
|
|
|
|
21,393
|
|
Due from related parties
|
|
|
|
|
|
105,537
|
|
Advance to employees
|
|
|
92,329
|
|
|
122,298
|
|
Advances to suppliers
|
|
|
13,131,074
|
|
|
1,746,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
44,755,427
|
|
|
18,223,481
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
|
19,332,712
|
|
|
7,533,619
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other assets:
|
|
|
|
|
|
|
|
Deferred charges
|
|
|
378,073
|
|
|
|
|
Intangible assets, net
|
|
|
247,681
|
|
|
236,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total other assets
|
|
|
625,754
|
|
|
236,867
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets
|
|
$
|
64,713,893
|
|
$
|
25,993,967
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
Short term loan
|
|
$
|
20,520,337
|
|
$
|
1,370,877
|
|
Bank acceptance note payable
|
|
|
8,061,561
|
|
|
12,886,245
|
|
Accounts payable
|
|
|
113,232
|
|
|
647,436
|
|
Other payable
|
|
|
106,232
|
|
|
31,860
|
|
Accrued expenses
|
|
|
820,625
|
|
|
43,940
|
|
Tax payable
|
|
|
17,777
|
|
|
1,454,745
|
|
Due to related party
|
|
|
7,542,950
|
|
|
|
|
Deferred revenue
|
|
|
3,469,796
|
|
|
93,040
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
40,652,510
|
|
|
16,528,143
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A Preferred Stock, $0.0001 par
value, 10,000,000 shares authorized, 1,000,000 shares issued and outstanding
as of December 31, 2008 and 2007, respectively
|
|
|
100
|
|
|
100
|
|
Series B Preferred Stock, $0.0001 par
value, 10,000,000 shares authorized, 1,000,000 shares issued and outstanding
as of December 31, 2008 and 2007, respectively
|
|
|
100
|
|
|
100
|
|
Common Stock, $0.0001 par value,
100,000,000 shares authorized, 805,802 and 405,402 shares issued and
outstanding as of December 31, 2008 & December 31, 2007, respectively
|
|
|
81
|
|
|
41
|
|
Additional Paid-in-Capital
|
|
|
2,482,786
|
|
|
2,482,826
|
|
Retained earnings
|
|
|
20,051,142
|
|
|
6,363,652
|
|
Accumulated other comprehensive income
|
|
|
1,527,174
|
|
|
619,105
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Stockholders equity
|
|
|
24,061,383
|
|
|
9,465,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities And Stockholders
Equity
|
|
$
|
64,713,893
|
|
$
|
25,993,967
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part
of these consolidated financial
statements
F-4
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
|
|
|
|
|
|
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
$
|
75,765,428
|
|
$
|
34,177,415
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
(58,431,799
|
)
|
|
(27,829,973
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
17,333,629
|
|
|
6,347,442
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Expenses
|
|
|
|
|
|
|
|
Reseach and development expenses
|
|
|
778,994
|
|
|
189,329
|
|
Selling expenses
|
|
|
322,650
|
|
|
131,772
|
|
General and Administrative expenses
|
|
|
1,747,648
|
|
|
403,834
|
|
|
|
|
|
|
|
|
|
Total Operating Expenses
|
|
|
2,849,292
|
|
|
724,935
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Income
|
|
|
14,484,337
|
|
|
5,622,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (expenses)
|
|
|
|
|
|
|
|
Interest Income (expenses)
|
|
|
(687,659
|
)
|
|
(152,684
|
)
|
Other Income
|
|
|
28,283
|
|
|
10,434
|
|
Other expense
|
|
|
(102,139
|
)
|
|
(207,687
|
)
|
|
|
|
|
|
|
|
|
Total Other expense
|
|
|
(761,515
|
)
|
|
(349,937
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
13,722,822
|
|
|
5,272,570
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
35,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
$
|
13,687,490
|
|
$
|
5,272,570
|
|
|
|
|
|
|
|
|
|
Other Comprehensive Income
|
|
|
|
|
|
|
|
Foreign Currency Translation Adjustment
|
|
|
908,069
|
|
|
482,931
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Income
|
|
$
|
14,595,559
|
|
$
|
5,755,501
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted Income per common share
|
|
|
|
|
|
|
|
Basic
|
|
$
|
33.02
|
|
$
|
12.99
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
$
|
0.35
|
|
$
|
0.14
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common share outstanding
|
|
|
|
|
|
|
|
Basic
|
|
|
414,569
|
|
|
405,802
|
|
|
|
|
|
|
|
|
|
Diluted
|
|
|
38,608,641
|
|
|
38,599,874
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part
of these consolidated financial statements
F-5
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
Other
Comprehensive
Income
|
|
|
|
|
|
Preferred
Stock A, Par value $ 0.0001
|
|
Preferred
Stock B, Par value $ 0.0001
|
|
Commen
Stock, Par value $ 0.0001
|
|
Additional
Paid-in-Capital
|
|
Retained
|
|
|
|
|
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
Shares
|
|
Amount
|
|
|
Earnings
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2006
|
|
|
1,000,000
|
|
|
100
|
|
|
1,000,000
|
|
|
100
|
|
|
405,802
|
|
|
41
|
|
|
2,482,826
|
|
|
1,091,082
|
|
|
136,174
|
|
$
|
3,710,323
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,272,570
|
|
|
|
|
|
5,272,570
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
482,931
|
|
$
|
482,932
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2007
|
|
|
1,000,000
|
|
$
|
100
|
|
|
1,000,000
|
|
$
|
100
|
|
|
405,802
|
|
$
|
41
|
|
$
|
2,482,826
|
|
$
|
6,363,652
|
|
$
|
619,105
|
|
$
|
9,465,824
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition of net asset of NB Telecom
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
400,000
|
|
|
40
|
|
|
(40
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,687,490
|
|
|
|
|
|
13,687,490
|
|
Net income for the year
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
908,069
|
|
$
|
908,069
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2008
|
|
|
1,000,000
|
|
$
|
100
|
|
|
1,000,000
|
|
$
|
100
|
|
|
805,802
|
|
$
|
81
|
|
$
|
2,482,786
|
|
$
|
20,051,142
|
|
$
|
1,527,174
|
|
$
|
24,061,383
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part
of these consolidated financial statements
F-6
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
|
|
|
|
|
|
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
Net income
|
|
$
|
13,687,490
|
|
$
|
5,272,570
|
|
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
|
|
|
|
|
|
|
|
Depreciation & amortization
|
|
|
967,105
|
|
|
280,925
|
|
Bad debt expense
|
|
|
|
|
|
89,424
|
|
Gain on disposal of fixed assets
|
|
|
|
|
|
(3,774
|
)
|
Changes in assets and liabilities:
|
|
|
|
|
|
|
|
(Increase) decrease in -Restricted cash
|
|
|
2,101,449
|
|
|
(559,438
|
)
|
Accounts receivable and other receivables
|
|
|
(5,677,947
|
)
|
|
(183,301
|
)
|
Tax Receivable
|
|
|
|
|
|
4,255
|
|
Inventories
|
|
|
(6,347,868
|
)
|
|
(987,411
|
)
|
Prepaid expenses
|
|
|
22,462
|
|
|
|
|
Notes receivables
|
|
|
(293,656
|
)
|
|
|
|
Advance to employees
|
|
|
37,740
|
|
|
297,060
|
|
Advances to suppliers
|
|
|
(11,061,383
|
)
|
|
(1,577,433
|
)
|
Deferred charge
|
|
|
(371,266
|
)
|
|
|
|
Increase (decrease) in -
|
|
|
|
|
|
|
|
Accounts payable and other payable
|
|
|
(497,713
|
)
|
|
(2,187,580
|
)
|
Accrued expenses
|
|
|
759,716
|
|
|
21,778
|
|
Tax payable
|
|
|
(1,509,948
|
)
|
|
1,454,745
|
|
Deferred revenue
|
|
|
3,309,634
|
|
|
(7,176
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by (used in) operating
activities
|
|
|
(4,874,185
|
)
|
|
1,914,643
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
Purchase of fixed assets
|
|
|
(12,037,135
|
)
|
|
(4,393,949
|
)
|
Proceeds from sale of fixed assets
|
|
|
|
|
|
144,657
|
|
Collection on due from related party
|
|
|
110,808
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(11,926,327
|
)
|
|
(4,249,292
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
Proceeds (Repayment) from Short Term Loan
|
|
|
18,711,534
|
|
|
(1,315,063
|
)
|
Proceeds from bank acceptance notes
payable
|
|
|
20,582,687
|
|
|
1,354,858
|
|
Repayment of bank acceptance notes
payable
|
|
|
(26,196,147
|
)
|
|
|
|
Proceeds from related party Loan
|
|
|
7,411,175
|
|
|
1,850,861
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing
activities
|
|
|
20,509,249
|
|
|
1,890,656
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and
cash equivalents
|
|
|
72,843
|
|
|
202,956
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase(decrease) in cash and cash
equivalents
|
|
|
3,781,580
|
|
|
(241,037
|
)
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, beginning of year
|
|
|
87,455
|
|
|
328,492
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of year
|
|
$
|
3,869,035
|
|
$
|
87,455
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow
information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest paid
|
|
$
|
700,260
|
|
$
|
212,926
|
|
|
|
|
|
|
|
|
|
Income taxes paid
|
|
$
|
7,600
|
|
$
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part
of these consolidated financial statements
F-7
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 1. ORGANIZATION AND
BASIS OF PRESENTATION
China XD
Plastics Company Ltd. (China XD Plastics or the Company), formerly known as
NB Telecom, Inc., was originally incorporated as NB Payphones Ltd. under the
laws of the state of Pennsylvania on November 16, 1999. On December 27, 2005,
we migrated our state of organization to the state of Nevada and effective
March 23, 2006, the name changed to NB Telecom, Inc.
On December 24, 2008, the Company acquired all of the outstanding
capital stock of Favor Sea Limited, a British Virgin Islands corporation,
through China XD Plastics Company Limited, a Nevada corporation (the Merger
Sub) wholly owned by the Company. Favor Sea Limited is a holding company whose
only asset, held through a subsidiary, is 100% of the registered capital of
Harbin Xinda Macromolecule Material Co., Ltd. (Xinda), a limited liability
company organized under the laws of the Peoples Republic of China (China or
PRC). Xinda is engaged in the development, manufacture and marketing of
modified plastics, primarily for use in the automotive industry. Xindas
offices and manufacturing facilities are located in China.
In connection with the acquisition, the following transactions took
place:
|
|
|
|
|
The Merger Sub issued 10 shares of the common stock of the Merger Sub
which constituted no more than 10% ownership interest in the Merger Sub and
1,000,000 shares of convertible Series A preferred stock of the Company to
the shareholders of Favor Sea Limited, and also 1,000,000 shares of Series B
preferred stock to XD Engineering Plastics Company Limited, a British Virgin
Islands corporation, the principal shareholder of Favor Sea Limited (XD),
in exchange for all of the outstanding stock of Favor Sea Limited (the Share
Exchange or Merger). The 10 shares of the common stock of the Merger Sub
were converted into approximately 50,367,778 shares of the common stock of
the Company prior to and approximately 405,802 post a reverse stock split of
124.1 for 1 pursuant to Nevada Revised Statutes Section 78.207 for both the
total number of authorized shares of common stock and the total number of
issued and outstanding shares of common stock (Reverse Split), and the
1,000,000 shares of convertible Series A preferred stock of the Company shall
convert approximately at a rate of 1:38.2 into 38,194,072 shares of the
common stock of the Company after the completion of the Merger so that
eventually the shareholders of Favor Sea Limited own approximately 99% of the
common stock of the Company.
|
|
|
|
|
|
The record date for the Reverse Split is set for December 31, 2008.
The record holders of the Companys common stock on the date of December 31,
2008 shall be subject to a 124.1:1 reverse split with fractional shares to be
rounded up to one hundred round lot, with the round-up shares to be deducted
from certain designated shareholders by the Company.
|
F-8
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 1. ORGANIZATION AND
BASIS OF PRESENTATION
(Continued)
|
|
|
|
|
In connection with the acquisition of Favor Sea, former officers and
directors of the Company resigned and executive officers of Favor Sea were
appointed as the Companys new officers and directors.
|
|
|
|
|
|
As part of the Merger, the Companys name is changed from NB
Telecom, Inc. to the Merger Subs name China XD Plastics Company Limited.
|
As a result of these transactions, the shareholders of Favor Sea now
own majority of the equity in the Company. In addition, persons affiliated with
Xinda will control the Board of Directors of the Company ten days after the
notice pursuant to Rule 14f-1 is mailed to the shareholders of record.
The acquisition has been accounted for as a reverse merger under the
purchase method of accounting since there has been a change of control.
Accordingly, Favor Sea and its subsidiaries are treated as the continuing
entities for accounting purposes.
Favor Sea
Limited was incorporated under the laws of the British Virgin Islands on May 2,
2008.
On August 11,
2008, Favor Sea acquired 100% interest of Hong Kong Engineering Plastics
Company Limited (HK Engineering Plastics), a Limited Liability Company
organized under the laws of the Hong Kong Special Administration Region on May
27, 2008.
HK Engineering
Plastics, in turn, owns 100% interest of Harbin Xinda Macromolecule Material
Co., Ltd (Harbin Xinda), a company incorporated in the Peoples Republic of
China on September 23, 2004.
The Company,
now through its indirectly owned subsidiary, Harbin Xinda is primarily engaged
in the business of research development, manufacture, distribution of modified
and engineering plastic pellets used in automotive parts through its
manufacturing facility and its wholly owned research laboratory, Harbin Xinda
Macromolecule Research Institute (the Research Institute), a separate entity
established in 2007.
The Companys
consolidated financial statements have been prepared in accordance with
generally accepted accounting principles in the United States of America (US
GAAP).
F-9
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of consolidation
The
consolidated financial statements of the Company include the accounts of the
Company, Favor Sea, HK Plastics Engineering, Harbin Xinda and the Research
Institute. All significant inter-company balances and transactions are
eliminated in consolidation.
Use of estimates
In preparing
the financial statements in conformity with accounting principles generally
accepted in the United States of America, management makes estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets and liabilities at the dates of the financial
statements, as well as the reported amounts of revenues and expenses during the
reporting year. Significant estimates, required by management, include the
recoverability of long-lived assets and the valuation of inventories. Actual
results could differ from those estimates.
Cash and cash equivalents
For purposes
of the statement of cash flow, the Company considers all highly liquid
investments with an original maturity of three months or less to be cash
equivalents.
Accounts
receivable
Accounts receivables
consist primarily of receivables resulting from sales of products, and are
stated at net realizable value. This value includes an appropriate allowance
for estimated uncollectible accounts. The allowance is calculated based upon
the evaluation and the level of past due accounts and the relationship with and
the economic status of the customers.
Inventory
Inventory is
composed of raw materials, packing materials, work in process and finished
goods. Inventory is valued at the lower of cost or market with cost determined
by the weighted average method. Management periodically compares the cost of
inventory with the market value and an allowance is made for writing down the
inventory to its market value, if lower than cost. No allowance for inventory is
considered necessary for the years ended December 31, 2008 and 2007.
F-10
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Property and equipment
Property and
equipment are stated at cost. The cost of an asset comprises its purchase price
and any directly attributable costs of bringing the asset to its present
working condition and locations for its intended use. Depreciation is
calculated using the straight-line method over the following useful lives:
|
|
|
|
|
Buildings
and improvements
|
|
39 years
|
|
Machinery,
equipment and automobiles
|
|
5-10 years
|
Expenditures
for maintenance and repairs are charged to expense as incurred. Additions,
renewals and betterments are capitalized.
Advance to suppliers
Advance to
suppliers represent the payments made and recorded in advance for goods and
services received. The Company makes advances to raw materials purchased from certain
agents overseas, which account for 60% of raw materials needed. In order to
maintain a long-term relationship with the vendors, the Company frequently
needs to make advances from one and half month to three months ahead.
The advances to suppliers were $13,131,074 as of December 31, 2008 and
$1,746,063 as of December 31, 2007.
Impairment of long-lived assets
Long-lived
assets, which include property, plant and equipment and intangible assets, are
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. Recoverability of
long-lived assets to be held and used is measured by a comparison of the
carrying amount of an asset to the estimated undiscounted future cash flows
expected to be generated by the assets. If the carrying amount of an asset
exceeds its estimated undiscounted future cash flows, an impairment charge is
recognized by the amount by which the carrying amount of the asset exceeds the
fair value of the assets. Fair value is generally determined using the assets
expected future discounted cash flows or market value, if readily determinable.
No impairment loss is recorded for the years ended December 31, 2008 and 2007.
F-11
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Income taxes
The Company accounts
for income tax under the provisions of SFAS No.109 Accounting for Income
Taxes, which requires recognition of deferred tax assets and liabilities for
the expected
future tax consequences of the events that have been included in the financial
statements or tax returns. Deferred income taxes are recognized for all
significant temporary differences between tax and financial statements bases of
assets and liabilities. Valuation allowances are established against net
deferred tax assets when it is more likely than not that some portion or all of
the deferred tax asset will not be realized. There are no deferred tax amounts
recognized at ended December 31, 2008 and 2007.
Revenue recognition
The Companys
revenue recognition policies are in compliance with Staff Accounting Bulletin
(SAB) 104. Sales revenue is recognized at the date of shipment to customers
when a formal arrangement exists, the price is fixed or determinable, the
delivery is completed, no other significant obligations of the Company exists
and collectability is reasonably assured. Payments received before all of the
relevant criteria for revenue recognition are satisfied are recorded as
deferred revenue.
Research and development
expenses
Research and
development expenses are costs associated with developing the Companys
intellectual property. Research and development costs are expensed as incurred.
The costs of equipments that are acquired or constructed for research and
development activities and have alternative future uses are classified as plant
and equipment and depreciated over their estimated useful lives. The research and development expense for the
years ended December 31, 2008 and 2007 was
$778,994 and $189,329, respectively.
Earnings per share
The Company
computes earnings per share (EPS) in accordance with Statement of Financial
Accounting Standards No. 128, Earnings per Share (SFAS No. 128), and SEC
Staff Accounting Bulletin No. 98 (SAB 98). SFAS No. 128 requires
companies with complex capital structures to present basic and diluted EPS.
Basic EPS is measured as net income divided by the weighted average common
shares outstanding for the period. Diluted EPS is similar to basic EPS but
presents the dilutive effect on a per share basis of potential common shares
(e.g., convertible securities, options and warrants) as if they had been
converted at the beginning of the periods presented, or issuance date, if
later. Potential common shares that have an anti-dilutive effect (i.e., those
that increase income per share or decrease loss per share) are excluded from
the calculation of diluted EPS.
F-12
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Concentration of credit risk
Financial
instruments that potentially subject the Company to concentration of credit
risk consist primarily of accounts receivable and other receivables. The
Company does not require collateral or other security to support these
receivables. The Company conducts periodic reviews of its clients financial
condition and customer payment practices to minimize collection risk on
accounts receivable.
Risks and uncertainties
The Companys
operations in the PRC are subject to special considerations and significant
risks not typically associated with companies in North America and Western
Europe. These include risks associated with, among others, the political,
economic and legal environment and foreign currency exchange. The Companys
results may be adversely affected by changes in the political and social
conditions in the PRC, and by changes in governmental policies with respect to
laws and regulations, anti-inflationary measures, currency conversion,
remittances abroad, and rates and methods of taxation, among other things.
Fair value of financial instruments
The carrying
amounts of certain financial instruments, including cash and cash equivalents,
accounts receivable, other receivables, accounts payable, accrued expenses,
taxes payable, notes payable and other loans payable approximate fair value due
to the short-term nature of these items. The carrying amounts of short-term
loans from bank approximate the fair value based on the Companys expected
borrowing rate for debt with similar remaining maturities and comparable risk.
Foreign currency translation
The Companys
functional currency is the Renminbi (RMB). For financial reporting purposes,
RMB has been translated into United States dollars (USD) as the reporting currency.
Assets and liabilities are translated at the exchange rate in effect at the
balance sheet date. Revenues and expenses are translated at the average rate of
exchange prevailing during the reporting period. Translation adjustments
arising from the use of different exchange rates from period to period are
included as a component of stockholders equity as Accumulated other
comprehensive income. Gains and losses resulting from foreign currency translations are included in accumulated
other comprehensive income. There is no significant fluctuation in exchange
rate for the conversion of RMB to USD after the balance sheet date.
F-13
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent accounting pronouncements
In December 2007, Statement
of Financial Accounting Standards No. 141(R),
Business Combinations,
was issued. SFAS No. 141R replaces SFAS No. 141,
Business Combinations.
SFAS 141R retains the fundamental
requirements in SFAS 141 that the acquisition method of accounting (which SFAS
141 called the
purchase method)
be used for all business combinations and
for an acquirer to be identified for each business combination. SFAS 141R
requires an acquirer to recognize the assets acquired, the liabilities assumed,
and any non-controlling interest in the acquiree at the acquisition date,
measured at their fair values as of that date, with limited exceptions. This
replaces SFAS 141s cost-allocation process, which required the cost of
acquisition to be allocated to the individual assets acquired and liabilities
assumed based on their estimated fair values. SFAS 141R also requires the acquirer
in a business combination achieved in stages (sometimes referred to as a step
acquisition) to recognize the identifiable assets and liabilities, as well as
the non-controlling interest in the acquiree, at the full amounts of their fair
values (or other amounts determined in accordance with SFAS 141R). SFAS 141R
applies prospectively to business combinations for which the acquisition date
is on or after the beginning of the first annual reporting period beginning on
or after December 15, 2007 An entity may not apply it before that date. SFAS
141 (R) will significantly affect the accounting for future business
combinations and we will determine the accounting as new combinations occur.
In December
2007, the FASB issued SFAS No. 160,Noncontrolling Interests in Consolidated
Financial Statements - an amendment of Accounting Research Bulletin No. 51
(SFAS 160), which establishes accounting and reporting standards for
ownership interests in subsidiaries held by parties other than the parent, the
amount of consolidated net income attributable to the parent and to the
non-controlling interest, changes in a parents ownership interest and the
valuation of retained non-controlling equity investments when a subsidiary is
deconsolidated. The Statement also establishes reporting requirements that
provide sufficient disclosures that clearly identify and distinguish between
the interests of the parent and the interests of the non-controlling owners.
SFAS 160 is effective for fiscal years beginning after December 15, 2007. We do not believe the adoption of
SFAS No. 160 will have a material impact on our consolidated financial
statements.
In February 2008, the FASB
issued Staff Position No. 157-2 (FSP 157-2), which delays the
effective date of FAS 157 one year for all nonfinancial assets and
nonfinancial liabilities, except those recognized or disclosed at fair value in
the financial statements on a recurring basis. FSP 157-2 is effective for
us beginning January 1, 2009. We do not believe the adoption of FSP 157-2
will have a material impact on our consolidated financial statements.
F-14
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
In March 2008, the FASB
issued Statement of Financial Accounting Standards (SFAS) No. 161,
Disclosures about Derivative Instruments and Hedging Activities, an amendment
of FASB Statement No. 133, which requires additional disclosures about the
objectives of the derivative instruments and hedging activities, the method of
accounting for such instruments under SFAS No. 133 and its related
interpretations, and a tabular disclosure of the effects of such instruments
and related hedged items on our financial position, financial performance, and
cash flows. SFAS No. 161 is effective beginning January 1, 2009. We
are currently assessing the potential impact that adoption of SFAS No. 161
may have on our financial statements.
In April 2008, the FASB issued
FASB Staff Position FAS 142-3, Determination of Useful Life of Intangible
Assets (FSP 142-3). FSP 142-3 amends the factors that should be
considered in developing the renewal or extension assumptions used to determine
the useful life of a recognized intangible asset under FAS 142, Goodwill
and Other Intangible Assets. FSP 142-3 also requires expanded disclosure
regarding the determination of intangible asset useful lives. FSP 142-3 is
effective for fiscal years beginning after December 15, 2008. Earlier
adoption is not permitted. We do not believe the adoption of FSP 142-3
will have a material impact on our consolidated financial statements.
Note 3. RE
STRICTED CASH
For the year
ended December 31, 2008 and 2007, the Company had
restricted cash of $3,664,346 and
$5,428,673 respectively. The Companys lenders require the Company to maintain with the lending banks a cash
balance of a minimum 40% -50% of the balance of the bank acceptance notes
payable (see Note 12) and 10% of the short-term loan (see Note 11) as
collateral for the companys obligations to the lenders.
Note 4. ACCOUNT
RECEIVABLE
Accounts
receivables consist of trade receivables resulting from sales of products
during the normal course of business. Account receivables for the year
ended December 31, 2008 and 2007amounted to $ 11,234,507and $5,117,840,
respectively.
The Company
collaborates directly with its end users on new product development, product
certifications and post-sales support. Sales contracts are usually signed
directly between the Company and its end users. Due to nature of this industry,
the Company also regularly uses a third party agent to sell its products to
various end users. This arrangement can greatly ensure timely collections of
its accounts receivables. As of December 31, 2008, this agent accounted for
majority of the total account receivable outstanding. The Company believes that
all of the accounts receivable outstanding with this customer are collectible.
F-15
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 4. ACCOUNT
RECEIVABLE (Continued)
The allowance
for uncollectible amounts for the year ended December 31, 2008 was $99,669, and $93,219 for the year ended
December 31, 2008 and 2007, respectively.
Note. 5 INVENTORY
The inventory
consists of the following:
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
December 31, 2008
|
|
December 31, 2007
|
|
|
|
|
|
|
|
Raw materials
|
|
$
|
708,768
|
|
$
|
665,270
|
|
Packing supplies
|
|
|
5,344
|
|
|
16,131
|
|
Work-in-process
|
|
|
213,362
|
|
|
53,428
|
|
Finished goods
|
|
|
11,511,308
|
|
|
4,853,033
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
12,438,782
|
|
$
|
5,587,862
|
|
|
|
|
|
|
|
|
|
No allowance
for inventory was made for the year ended December 31, 2008.
Note 6. PROPERTY, PLANT AND EQUIPMENT, NET
The detail of
property, plant and equipment is as follows:
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
December
31, 2008
|
|
December
31, 2007
|
|
|
|
|
|
|
|
Machinery & equipment
|
|
$
|
17,007,972
|
|
$
|
5,920,295
|
|
Automobiles
|
|
|
142,674
|
|
|
52,679
|
|
Plant & Buildings
|
|
|
2,373,619
|
|
|
2,220,000
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
19,524,264
|
|
|
8,192,974
|
|
|
|
|
|
|
|
|
|
Less: accumulated depreciation
|
|
|
(1,684,241
|
)
|
|
(659,355
|
)
|
|
|
|
|
|
|
|
|
Construction in progress
|
|
|
1,492,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net
|
|
$
|
19,332,712
|
|
$
|
7,533,619
|
|
|
|
|
|
|
|
|
|
Depreciation
expense for years ended December 31, 2008 and 2007 was $961,627 and $275,922, respectively.
F-16
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 7. INTANGIBLE ASSET
Intangible
asset consists of land use right only. All land in the Peoples Republic of
China is government owned and cannot be sold to any individual or company.
Instead, the government grants the user a Land use right (the Right) to use
the land. The Company has the right to use the land for 48 years and amortized
the Right on a straight-line basis over 48 years. The land use right was
originally acquired in May 2005 for the amount of $226,281.
Net intangible assets at
December 31, 2008 and December 31, 2007 were as follows:
|
|
|
|
|
|
|
|
|
|
As of
|
|
|
|
December 31, 2008
|
|
December 31, 2007
|
|
|
|
|
|
|
|
Land use right
|
|
$
|
267,663
|
|
$
|
250,340
|
|
Less: Accumulated amortizati
|
|
|
(19,982
|
)
|
|
(13,473
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
247,681
|
|
$
|
236,867
|
|
|
|
|
|
|
|
|
|
Amortization
expense for the years ended December 31, 2008 and 2007 amounted to $5,478 and $5,003, respectively.
Note 8. EMPLOYEE ADVANCE
Employee
advance represent cash advances to employees to purchase raw materials or equipment and other supplies for
normal business purposes. Employee advance for the year ended December 31, 2008
and 2007amounted to $ 92,329 and $122,298, respectively.
Note 9. DEFERRED CHARGES
Deferred
charges are related to the employee fringe for the automobiles purchased by the
company on behalf of the senior management members. The beneficiaries signed
employment contracts with the Company and they are obliged to work for the
Company for a service period of 7 to 10 years. Once they serve the full
contract term, the vehicles are for them to keep. If they leave before the
service contract expire, they are required to reimburse the full price if the
vehicle at the time of the purchase. The company amortizes the payment of the
automobile expenses based on the services performed by those employees.
F-17
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 10. RELATED PARTY TRANSACTIONS
Amounts due to
(from) directors/affiliates are as follows:
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
December
31, 2008
|
|
December
31, 2007
|
|
|
|
|
|
|
|
Xinda High-Tech Co., Ltd.
|
|
$
|
6,975,195
|
|
$
|
|
|
Piao Qiuyao
|
|
|
214,951
|
|
|
|
|
Ma Qingwei
|
|
|
20,520
|
|
|
(19,172
|
)
|
Han Jie
|
|
|
332,283
|
|
|
(86,365
|
)
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
7,542,950
|
|
$
|
(105,537
|
)
|
|
|
|
|
|
|
|
|
The Company
also has sales and purchases to and from its affiliated companies. The details
are as follows:
|
|
|
|
|
|
|
|
|
|
For
the years ended
|
|
|
|
December
31, 2008
|
|
December
31, 2007
|
|
|
|
|
|
|
|
Purchase from
|
|
|
|
|
|
|
|
Harbin Xinda Hi-tech Co, Ltd
|
|
$
|
869,491
|
|
$
|
|
|
Heilongjiang Xinda Hyundai Engineering Plastics Co, Ltd.
|
|
$
|
223,455
|
|
$
|
440,554
|
|
Sales to
|
|
|
|
|
|
|
|
Harbin Xinda Hi-tech Co., Ltd
|
|
$
|
60,008
|
|
$
|
163,072
|
|
Harbin Xinda
Hi-Tech Co. Ltd and Heilongjiang Xinda Hyundai Engineering Plastics Co. Ltd.
are affiliate companies owned by the relative of the Mr. Han Jie, who was the
major shareholder of Harbin Xinda before the ownership transferred to HK
Engineering Plastics.
Ms Piao,
Qiuyao owns 100% of Favor Sea Limited indirectly via XD Engineering Plastic
Company Ltd, the sole shareholder of Favor Sea Limited which was incorporated
in British Virgin Island. Harbin Xinda Hi-Tech Co. Ltd and Heilongjiang Xinda
Hyundai Engineering Plastics Co. Ltd. are affiliate companies owned by the
relative of the Mr. Han Jie, who was the major shareholder of Harbin Xinda
before the ownership transferred to HK Engineering Plastics.
After the
reverse acquisition, Mr. Ma Qingwei is the Chief Operating Officer of China XD
Plastics Company and Mr. Han Jie is the Chief Executive Officer and Chief
Financial Officer of the Company.
F-18
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 10. RELATED PARTY TRANSACTIONS
(Continued)
On September
20, 2008, Harbin Xinda Macromolecule Material Co., Ltd ( Harbin Xinda,
Buyer) signed an agreement (Agreement) with Harbin Xinda High-Tech Co.,
Ltd. (Xinda High-Tech, Seller), an affiliated company owned by the relative
of Mr. Han Jie to acquire all of the assets of Xinda High-Tech, including plant
buildings, land use rights, machinery and equipment for a total amount of
RMB240,000,000 (approximately US$35,136,006 at date of signing),. Harbin Xinda
was required to make two installment payments of the full purchase price,
RMB50, 000,000 by the end of December 31, 2008 and remaining RMB190, 000,000 by
the end of September 30, 2009 if all assets purchased are transferred to the
Company. Through this purchase, Harbin Xinda is expected to significantly
increase its production ability.
Before the
above purchase agreement was signed, the Company rented the buildings and
equipment for its operation. The total rent expense was $119,945 for the year
ended December 31, 2008.
F-19
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 11. SHORT TERM LOANS
The short-term
loans include the following:
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
Decem
ber 31, 2008
|
|
December
31, 2007
|
|
|
|
|
|
|
|
a) Loan payable to Harbin Commerical Bank one year term from 12/04/07
to 12/03/08, a fixed interest rate of 0.79% per month,
|
|
$
|
|
|
$
|
1,370,877
|
|
|
|
|
|
|
|
|
|
b) Loan payable to Harbin Bank Five-month term from 12/02/08 to
04/28/09, a fixed interest rate of 0.546% per month
|
|
|
4,397,215
|
|
|
|
|
|
|
|
|
|
|
|
|
c)Loan payable to Harbin Bank one year term from 12/09/2008 to
12/08/2009 a fixed interest rate of 0.605% per month
|
|
|
1,465,738
|
|
|
|
|
|
|
|
|
|
|
|
|
d) Loan payable to Harbin Bank one year term from 2/25/2008 to
2/21/2009, a fixed interest rate of 0.809% per month
|
|
|
4,397,215
|
|
|
|
|
|
|
|
|
|
|
|
|
e) Loan payable to Bank of Communications one year term from
12/26/2008
to 12/21/2009 bears interest 10% above the prime rate set by Central bank of
China
|
|
|
4,397,215
|
|
|
|
|
|
|
|
|
|
|
|
|
f) Loan payable to Anhui Yiyang Metal Materials Co.,Ltd. one year
term from 11/1/2008 to 10/31/2009 interest to be accrued starting from 1/1/2009
at 30% above the prime rate set by Central bank of China
|
|
|
5,862,953
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
20,520,337
|
|
$
|
1,370,877
|
|
|
|
|
|
|
|
|
|
F-20
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 11. SHORT TERM LOANS (Continued)
The
five-month-term short loan of $4,397,215 between Harbin Xinda and Harbin Bank
for the period of December 2, 2008 to April 28, 2009 is guaranteed by Harbin
Xinda as well as two individuals and two other companies. Harbin Xinda pledged
its accounts receivable in the amount of $6,397,655 due from Changchun Jinheng
Auto Engineering &Plastics Company Limited as the collateral. The loan will be
primarily used to purchase raw materials for production. Also, cash in the
amount of $439,722 was restricted in the bank to secure the loan.
The
one-year-term short loan of $1,465,738 between Harbin Hi-Tech and Harbin Bank
for the period of December 9, 2008 to December 8, 2009 was guaranteed by Harbin
Xinda Hi-tech by pledging its assets in the amount of $3,899,480 as the
collateral to secure the loan.
The
one-year-term short loan of $4,397,215 between Harbin Xinda and Harbin Bank for
the period of February 25, 2008 to February 21, 2009 was guaranteed by Harbin
Xinda and Harbin Xinda Hi-tech. Harbin Xinda and Harbin Xinda Hi-Tech pledged
its equipments and machinery in the amount of $10,077,801 and $1,993,404,
respectively, as the collateral to secure the loan.
The one-year-term
short loan of $4,397,215 between Harbin Xinda Hi-tech and Bank of
Communications for the period of December 26, 2008 to December 21, 2009 was
guaranteed by Harbin Hi-tech. Harbin Hi-tech pledged the land and buildings as
the collateral.
Interest expense
for the above short term loans totaled $687,695 and $212,936 for years ended
December 31, 2008 and 2007, respectively.
Note12. BANK ACCEPTANCE NOTES PAYABLE
As of December
31, 2008, the Company has bank acceptance notes payable in the amount of $8,061,561.
The notes are guaranteed to be paid by the banks and usually for a short-term
period of 3 to 6 months. The Company is required to maintain cash deposits at a
minimum 40%-50% of the total balance of the notes payable with the banks, in
order to ensure future credit availability.
F-21
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 13. INCOME TAXES
(a)
Corporation income tax (CIT)
The Company is
governed by the Income Tax Law of the Peoples Republic of China concerning the
private-run enterprises, which are generally subject to tax at a new statutory
rate of 25% on income reported in the statutory financial statements after
appropriate tax adjustments.
On March 16, 2007, the National Peoples Congress of China approved the
Corporate Income Tax Law of the Peoples Republic of China (the New CIT Law),
which is effective from January 1, 2008. Under the new law, the corporate
income tax rate applicable to all Companies, including both domestic and
foreign-invested companies, will be 25%, replacing the old tax rate of 33%.
However, pending the detailed implementation rulings from the tax authorities,
we believe that some of the tax concession granted to eligible companies prior
to the new CIT laws will be grand fathered.
The Company is
located in a special economic development zone and is recognized as a high
technology company by the Chinese government. Therefore, it is entitled to a
full exemption of special 15% CIT for two years from January 1, 2006 through
December 31, 2007 and 50% reduction in CIT for three years at a favorable tax
rate of 7.5% from January 1, 2008 to December 31, 2010. The income tax expense
of $35,332 for year ended December 31, 2008 is attributed to the net income of
$271,571 derived from Harbin Xinda. The majority of the net income for the
period was from the Research Institute, which is a separate entity and whose
income is exempt from the income tax under the current law of China.
The following
table reconciles the statutory rates to the Companys effective tax rate for
the years ended December 31, 2008 and 2007:
|
|
|
|
|
|
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
China Income Tax
|
|
|
25.00
|
%
|
|
33.00
|
%
|
Tax exemption
|
|
|
(24.74
|
)%
|
|
(33
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total provision for income tax
|
|
|
0.26
|
%
|
|
0.00
|
%
|
F-22
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 13. INCOME TAXES (Continued)
(b) Value added tax (VAT)
Enterprises or
individuals who sell commodities, engage in repair and maintenance or import or
export goods in the PRC are subject to a value added tax in accordance with the
PRC laws. The value added tax standard rate is 17% of the gross sales price. A
credit is available whereby VAT paid on the purchases of semi-finished products
or raw materials used in the production of the Companys finished products can
be used to offset the VAT due on the sales of the finished products.
Note 14. STOCKHOLDERS EQUITY
Prior to the
reverse merger, the Company had 49,632,222 shares of common stock issued and
outstanding at $.0001 per share. In connection with the reverse merger
consummated on December 24, 2008, all of these outstanding shares were subject
to a 124.1 to 1 reverse split for all record holders of the Companys
common stock on the date of December 31, 2008. The number of the post
reverse-split of the original common stock outstanding was rounded up to
400,000 shares.
In
consideration for the Merger, the Company, through the Merger Sub,
issued 10 shares of the common stock of the Merger Sub and 1,000,000
shares of convertible Series A preferred stock of the Company to the
shareholders of Favor Sea Limited, and also 1,000,000 shares of Series B
preferred stock to XD Engineering Plastics Company Limited, the principal
shareholder of Favor Sea. The 10 shares of the common stock of the Merger Sub
were converted into approximately 50,367,778 shares of the common stock of the Company
prior to and approximately 405,802 post a reverse stock split of 124.1 for 1.
The equity account of Favor Sea, prior to the merger date, has been
retroactively restated so that the ending outstanding share balance as of the
merger date is equal to the number of post reverse-split shares received in the
merger.
Thus, as of
December 31, 2008 and 2007, there were 805,802 and 405,802 post reverse-split
shares of common stock issued and outstanding, respectively. There were
also 1,000,000 share of Series A preferred stock (convertible into 38,194,702
share of post reverse-split common stock) and 1,000,000 share of Series B
preferred stock issued and outstanding.
F-23
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 1
5. MAJOR CUSTOMERS
AND SUPPLIERS
Two major
customers accounted for approximately 9.5% of the net revenue for the year
ended December 31, 2008, with each customer individually accounting for 5.28%,
and 4.23%, respectively.
Four major
customers accounted for 25.33% of the net revenue for the year ended December
31, 2007, with each customer individually accounted for 8.68%, 6.31%, 5.66%,
and 4.68%, respectively. At December 31, 2007, the total receivable balance due
from these four customers was $821,616, representing 15.77% of total accounts
receivable.
Two major
vendors provided approximately 84% of the Companys purchases of raw materials
for the period ended December 31, 2008, with each vendor individually
accounting
for 58% and
26%, respectively. The advance to one of the vendors was in the amount of
$12,060,537 at December 31, 2008.
One vendor
provided 86.23% of the Companys purchase of raw materials for the year ended
December 31, 2007. The Companys advance to this vendor was $1,735,924 at
December 31, 2007, accounting for 99.42% of total advances to suppliers.
Note 16. WEIGHTED AVERAGE NUMBER OF SHARES
In December 2008, the Company entered into a reverse merger
transaction. The Company computes the weighted-average number of common shares
outstanding in accordance with FAS 141(R). FAS 141(R) states that in
calculating the weighted average shares when a reverse merger takes place in
the middle of the year, the number of common shares outstanding from the
beginning of that period to the acquisition date shall be computed on the basis
of the weighted-average number of common shares of the legal acquiree
(accounting acquirer) outstanding during the period multiplied by the exchange
ratio established in the merger agreement. The number of common shares
outstanding from the acquisition date to the end of that period shall be the
actual number of common shares of the legal acquirer (the accounting acquiree)
outstanding during that period.
F-24
CHINA XD PLASTICS COMPANY LTD
(FORMERLY NB TELECOM, INC.)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
FOR THE YEARS ENDED DECEMBER 31, 2008 AND 2007
Note 1
7. COMMITMENTS AND
CONTINGENCY
a) Renewal of
short term loan with Anhui Yiyang Metal Materials Co., Ltd.
On October 31,
2008, the Company renewed the contract with Anhui Yiyang Metal Materials Co.,
Ltd., an unaffiliated partner for the amount of RMB70,000,000 (equivalent to
US$10,232,721 at date of signing). The term is from November 1, 2008 to October
31, 2009, with interest rate at 30% above the prime rate for one year loan
published by the Central bank of China. The Company is required to pay interest
expenses starting from January 1, 2009. As of December 31, 2008, the Company
repaid RMB30,000,000 (equivalent to US$4,397,215).
b) Asset
Acquisition Agreement with High-Tech
According to
the agreement signed between Harbin Xinda and Xinda High-Tech (see note 10),
Xinda is obligated to pay the second installment payment for RMB 190,000,000 by
the end of September 30, 2009 if all the assets are transferred to the Company.
Note 18. SUBSEQUENT EVENTS
On
February 23, 2009, the Company amended the agreement with Xinda Hi-tech and
extends the deadline for the second payment for the asset acquisition to
December 31, 2009.
F-25
|
|
Item 9.
|
Changes In and Disagreements With
Accountants On Accounting and Financial Disclosure.
|
On
December 31, 2008, the Company changed its principal independent accountants.
On such date, Robison, Hill & Co. was dismissed from serving as the
Companys principal independent accountants and the Company retained Bagell
Josephs Levine & Company, LLC as its principal independent accountants. The
decision to change accountants was approved by the Companys Board of Directors
on December 31, 2008.
The dismissal
of Robison, Hill & Co.
Robison, Hill & Co. was the independent registered public accounting firm
for the Company from December 31, 2004 to December 31, 2008. None of Robinson,
Hill & Co.s reports on the Companys financial statements from December
31, 2004 to December 31, 2008, (a) contained an adverse opinion or disclaimer
of opinion, (b) was modified as to uncertainty other than mentioned below,
audit scope, or accounting principles, or (c) contained any disagreements on
any matters of accounting principles or practices, financial statement
disclosure, or auditing scope or procedures, which disagreements, if not
resolved to the satisfaction of Robison, Hill & Co., would have caused it
to make reference to the subject matter of the disagreements in connection with
its reports. None of the reportable events set forth in Item 304(a)(1)(ii) of
Regulation S-K occurred during the period in which Robison, Hill & Co.
served as the Companys principal independent accountants.
In
accordance with Item 304(a)(3), the Company has provided Robison, Hill &
Co. with a copy of this disclosure and has requested that Robison, Hill &
Co. furnish it with a letter addressed to the U.S. Securities and Exchange
Commission stating whether it agrees with the above statements, and if not,
stating the respects in which it does not agree. A copy of the letter from
Robison, Hill & Co. addressed to the Securities and Exchange Commission
dated December 31, 2008 is filed as Exhibit 16.1 to this 8-K Report.
The Engagement
of Bagell Josephs Levine & Company, LLC
Prior to
December 31, 2008, the date that Bagell Josephs Levine & Company, LLC was
retained as the principal independent accountants of the Company:
(1) The
Company did not consult Bagell Josephs Levine & Company, LLC regarding
either the application of accounting principles to a specified transaction,
either completed or proposed, or the type of audit opinion that might be
rendered on Companys financial statements;
(2) Neither a
written report nor oral advice was provided to the Company by Bagell Josephs
Levine & Company, LLC that they concluded was an important factor
considered by the Company in reaching a decision as to the accounting, auditing
or financial reporting issue; and
(3) The Company
did not consult Bagell Josephs Levine & Company, LLC regarding any matter
that was either the subject of a disagreement (as defined in Item
304(a)(1)(iv) of Regulation S-K and the related instructions) or any of the
reportable events set forth in Item 304(a)(1)(iv) of Regulation S-K.
25
ITEM
9A. CONTROLS AND PROCEDURES
(a)
Evaluation of Disclosure Controls and Procedures
The Companys management has
evaluated, under the supervision and with the participation of the Companys Chief
Executive Officer and Chief Financial Officer, the effectiveness of the design and
operations of the Companys disclosure controls and procedures (as defined in
Securities Exchange Act Rule 13a-15(e)), as of the end of the period covered by this
annual report. Based on that evaluation, the Companys Chief Executive Officer and
Chief Financial Officer have concluded that the evaluation of the effectiveness of our
disclosure controls and procedures was completed; our disclosure controls and procedures
were not effective.
(b)
Managements Annual Report on Internal Control over Financial Reporting
The
Companys management is responsible for establishing and maintaining an adequate
system of internal control over financial reporting. Internal control over financial
reporting is a process designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles. A companys internal
control over financial reporting includes those policies and procedures that (i) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the company; (ii) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (iii) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
Because
of its inherent limitations, a system of internal control over financial reporting can
provide only reasonable assurance and may not prevent or detect misstatements. Therefore,
even those systems determined to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation. Further, because of changes
in conditions, effectiveness of internal control over financial reporting may vary over
time.
A
significant deficiency is a control deficiency, or combination of control deficiencies,
that adversely affects the companys ability to initiate, authorize, record, process,
or report external financial data reliably in accordance with generally accepted
accounting principles such that there is more than a remote likelihood that a misstatement
of the companys annual or interim financial statements that is more than
inconsequential will not be prevented or detected. An internal control material weakness
is a significant deficiency, or combination of significant deficiencies, that results in
more than a remote likelihood that a material misstatement of the annual or interim
financial statements will not be prevented or detected.
We
have evaluated the effectiveness of our internal control over financial reporting as of
December 31, 2008. This evaluation was performed using the Internal Control
Evaluation Framework developed by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). Based on such evaluation, management identified
deficiencies that were determined to be a material weakness.
A
material weakness is a deficiency, or a combination of deficiencies, in internal control
over financial reporting, such that there is a reasonable possibility that a material
misstatement of the companys annual or interim financial statements will not be
prevented or detected on a timely basis. Because of the material weakness described below,
management concluded that our internal control over financial reporting was not effective
as of December 31, 2008.
The
specific material weakness and significant deficiency identified by the Companys
management as of December 31, 2008 is described as follows:
26
Material
Weakness
Inadequate
US GAAP expertise The current staff in the accounting department is inexperienced
in US GAAP and they were primarily engaged in ensuring compliance with PRC accounting and
reporting requirement for our operating subsidiaries was not required to meet or apply
U.S. GAAP requirements. They need substantial training to meet the higher demands of being
a U.S. public company. The accounting skills and understanding necessary to fulfill the
requirements of US GAAP-based reporting, including the skills of subsidiary financial
statements consolidation, are inadequate.
The
Company did not have sufficient and skilled accounting personnel with an appropriate level
of technical accounting knowledge and experience in the application of generally accepted
accounting principles accepted in the United States of America commensurate with the
Companys financial reporting requirements, which resulted in a number of internal
control deficiencies that were identified as being significant. The Companys
management believes that the number and nature of these significant deficiencies, when
aggregated, was determined to be a material weakness.
Significant
Deficiency
The
Company is lacking qualified resources to perform the internal audit functions properly.
In addition, the scope and effectiveness of the Companys internal audit function are
yet to be developed. We are committed to establishing the internal audit functions but due
to limited qualified resources in the region, we were not able to hire sufficient internal
audit resources before the end of 2008. However, internally we have started the process to
recruit more senior qualified people in order to improve our internal control procedures.
Externally, we also seek qualified consultant to assist the Company in improving the
Companys internal control system based on COSO Framework. We also will increase our
efforts to hire the qualified resources.
Remediation
Initiative
Prior
to December 31, 2008, we engaged external qualified consultant in the US to serve as our
accountant. She is mainly engaged to perform our financial statements consolidation and to
prepare our financial statements. In addition, we are seeking accountants experienced in
several key areas of accounting, including persons with experience in Chinese and U.S.
GAAP, U.S. GAAP consolidation requirements, and SEC financial reporting requirements. In
addition, we plan to allocate additional resources to train our existing accounting staff
and continue this effort in the future.
Conclusion
Despite
of the material weakness and deficiencies reported above, the Companys management
believes that its consolidated financial statements included in this report fairly present
in all material respects the Companys financial condition, results of operations and
cash flows for the periods presented and that this report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report.
(c)
Changes in Internal Control over Financial Reporting
Except
as described above, there were no changes in its internal controls over financial
reporting in connection with its fourth quarter evaluation that would materially affected,
or are reasonably likely to materially affect, its internal control over financial
reporting.
|
|
Item 9B.
|
Other Information
|
None.
27
PART III
|
|
Item 10.
|
Directors, Executive Officers and Corporate
Governance.
|
Directors
and Executive Officers
Each
director is elected for until the next annual meeting of shareholders and their
successor is elected and qualified.
The
following is a list of the names and ages of our directors and executive
officers:
|
|
|
|
|
Name
|
|
Age
|
|
Positions with the Company
|
|
|
|
|
|
|
|
|
|
|
Jie Han
|
|
43
|
|
Chairman,
Chief Executive Officer and Chief Financial Officer
|
|
|
|
|
|
Qingwei Ma
|
|
34
|
|
Director,
Chief Operating Officer
|
|
|
|
|
|
Junjie Ma
|
|
33
|
|
Director,
Head of Research Institute
|
All directors
hold office until the next annual meeting of our shareholders and until their
successors have been elected and qualify. Officers serve at the pleasure of the
Board of Directors.
Jie Han.
Mr. Han
co-founded Xinda in 2004, and has been employed by Xinda since that time. In
January 2008 Mr. Han was appointed Chairman and Chief Executive Officer of
Xinda. Prior to organizing Xinda High-tech, which was founded in 2003, Mr. Han
had been associated with the Harbin Xinda Nylon Factory, which he founded in
1985. With 24 years of experiences in the industry, Mr. Jie Han is an expert in
the management and financial works dealing with the manufacture and distribution
of modified plastic products. Mr. Han currently serves as an executive director
of China Plastic Processing Industry Association and is also a director of the
Heilongjiang Industry and Commerce Association. In addition, Mr. Han serves as
a deputy to the Harbin Municipal Peoples Congress.
Qingwei Ma.
Mr. Ma
has been employed as General Manager of Xinda since it was founded in 2004. In
2008 he was promoted to Chief Operating Officer. Prior to joining Xinda, Mr. Ma
was employed for six years by Harbin Xinda Nylon Factory as Manager of Quality
Assurance, then as Manager of Research and Development, and finally as
Production Manager. In 1997 Mr. Ma was awarded a bachelors degree by the
Northern China Technology University, where he specialized in the chemical engineering
of high polymers. Mr. Ma has 11 years of experiences in the industry. He also
published two articles in Chinas key journals in the areas of modified plastic
industry. In 2001 Mr. Ma was selected as Harbin Quality Work Advanced
Enterprise and Advanced Worker; in 2004 he was awarded the Heilongjiang First
Professional Manager Qualification Certificate. One of his inventions,
compound nano modified materials dedicated to the automobile bumper won the
Science and Technology Progress Awards issued by Harbin Municipality.
Junjie Ma.
Mr. Ma
graduated from Beijing University of Science and Technology, majored in Polymer
materials and engineering. He was a technician of Harbin Longjiang Electrical
Plant from 1997 to 2004 and was a supervisor and manager of Harbin Xinda
Macromolecule Material Inc. from 2004 to 2007. Since 2008, he was elected to be
Head of Research Institute of Harbin Xinda Macromolecule Material Co., Ltd. Mr.
Junjie Ma is a polymer materials engineers and has developed more than 120
plastic additives, modified plastics for automobiles and engineering plastics
among which 50 products have been approved by auto enterprises. A number of
products have been awarded as the National Torch Program projects, Spark
Projects and Harbin City Important New Products project.
28
The
Board of Directors has not established audit, nominating and compensation
committees. The Board is of the opinion that such committees are not necessary
since the Company only has three directors.
Code of Ethics
We do not
currently have a Code of Ethics applicable to our principal executive,
financial or accounting officer, and are in the process of adopting such a
code.
Section 16 (a) Beneficial Ownership Reporting
Compliance
Pursuant
to Section 16(a) of the Securities Exchange Act of 1934 and the rules issued
thereunder, our directors and executive officers and any persons holding more
than 10% of our common stock are required to file with the SEC reports of their
initial ownership of our common stock and any changes in ownership of such
common stock. Copies of such reports are required to be furnished to us. We are
not aware of any instances in fiscal year ended December 31, 2008 when an
executive officer, director or any owner of more than 10% of the outstanding
shares of our common stock failed to comply with the reporting requirements of
Section 16(a) of the Securities Exchange Act of 1934.
|
|
Item 11.
|
Executive Compensation
|
The
following table is a summary of the compensation paid to our executive officers
for the two years ending December 31, 2008 and 2007.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUMMARY COMPENSATION TABLE
|
|
Name and Principal
Position
|
|
Year
|
|
Salary
|
|
Bonus
|
|
Stock
Awards
|
|
Option
Awards
|
|
Nonequity
Incentive Plan Compensation
|
|
Nonqualified
Deferred Compensation Earnings
|
|
All
Other Compensation
|
|
Total
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jie Han Chief Executive
Officer
|
|
|
2008
|
|
$
|
[103,63
|
]
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
[103,632
|
]
|
|
|
|
2007
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
Qingwei Ma Chief Operating
Officer
|
|
|
2008
|
|
$
|
[21,578
|
]
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
[21,578
|
]
|
|
|
|
2007
|
|
$
|
5,782
|
|
$
|
0
|
|
$
|
0
|
|
$
|
0
|
|
|
0
|
|
$
|
0
|
|
$
|
0
|
|
$
|
5782
|
|
29
Outstanding
Equity Awards at Fiscal Year-End Table
The following
is a summary of all options, unvested stock and equity incentive plans for our
Executive Officers for the year ending December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OUTSTANDING
EQUITY AWARDS AT FISCAL YEAR-END
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
Awards
|
|
|
|
|
|
|
|
Stock
Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Name
|
|
Number of Securities
Underlying Unexercised Options Exercisable
|
|
Number of Securities
Underlying Un-Exercised Options Un-Exercisable
|
|
Equity Incentive Plan
Awards: Number of Securities Underlying Unexercised Unearned Options
|
|
Option Exercise Price
|
|
Option Expiration Date
|
|
Number of Shares or Units
of Stock That Have Not Vested
|
|
Market Value of Shares or
Units of Stock That Have Not Vested
|
|
Equity Incentive Plan
Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested
|
|
Equity Incentive Plan
Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That
Have Not Vested
|
Jie Han
|
|
0
|
|
0
|
|
0
|
|
N/A
|
|
N/A
|
|
0
|
|
0
|
|
0
|
|
0
|
Qingwei Ma
|
|
0
|
|
0
|
|
0
|
|
N/A
|
|
N/A
|
|
0
|
|
0
|
|
0
|
|
0
|
Compensation
of Directors
The
following is a summary of the compensation paid to our Directors for the period
ending December 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DIRECTOR COMPENSATION
|
|
Name
|
|
Fees
Earned or Paid in Cash
|
|
Stock
Awards
|
|
Option
Awards
|
|
Non-Equity
Incentive Plan Compensation
|
|
Nonqualified
Deferred Compensation Earnings
|
|
All
Other Compensation
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Jie Han
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
Qingwei Ma
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
Junjie Ma
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
|
0
|
Employment
Agreements
All
of our officers and directors serve on an at-will basis.
30
|
|
Item 12.
|
Security Ownership of Certain Beneficial
Owners and Management and Related Stockholder Matters.
|
The following
table lists, as of March 23], 2009, the number of shares of common stock
beneficially owned by (i) each person or entity known to the Company to be the
beneficial owner of more than 5% of the outstanding common stock; (ii) each
officer and director of the Company, and (iii) all officers and directors as a
group. Information relating to beneficial ownership of common stock by our
principal stockholders and management is based upon information furnished by
each person using beneficial ownership concepts under the rules of the
Securities and Exchange Commission. Under these rules, a person is deemed to be
a beneficial owner of a security if that person has or shares voting power,
which includes the power to vote or direct the voting of the security, or
investment power, which includes the power to vote or direct the voting of the
security. The person is also deemed to be a beneficial owner of any security of
which that person has a right to acquire beneficial ownership within 60 days.
Under the Securities and Exchange Commission rules, more than one person may be
deemed to be a beneficial owner of the same securities, and a person may be
deemed to be a beneficial owner of securities as to which he or she may not
have any pecuniary beneficial interest. Except as noted below, each person has
sole voting and investment power.
The
Certificate of Change to effectuating the 124.1 to 1 reverse split of the
issued and outstanding shares of common stock, while correspondingly reducing
the Companys authorized capital, was filed with the Secretary of State of
Nevada on January 6, 2009. As of such date, the Company had 110,000,000 shares
of stock authorized, of which 100,000,000 shares of common stock were
authorized, issued and outstanding and 10,000,000 shares of preferred stock
were authorized, of which 1,000,000 shares of Series A Preferred Stock were
issued and outstanding and 1,000,000 shares of Series B Preferred Stock were
issued and outstanding.
There are no
options or warrants convertible into shares of Common Stock. There are
1,000,000 shares of convertible Series A preferred stock of the Company
convertible approximately 1:38.2 into 38,194,072 shares of Common Stock of the
Company.
31
|
|
|
|
|
|
|
|
Name and Address of
Beneficial Owner
(1)
|
|
Amount and Nature
of Beneficial
Ownership
(2)
|
|
Percentage
of Class
|
|
|
|
|
|
|
|
Jie Han
|
|
|
0
|
|
|
|
|
Qingwei Ma
|
|
|
0
|
|
|
|
|
Junjie Ma
|
|
|
0
|
|
|
|
|
All officers
and directors
|
|
|
|
|
|
|
|
as a group
(3 persons)
|
|
|
0
|
|
|
|
|
XD.
Engineering Plastics Company Limited
|
|
|
405,864
|
|
|
50.36
|
% (3)
|
P.O. Box
957, Offshore Incorporations Centre
|
|
|
|
|
|
|
|
Road Town,
Tortola, British Virgin Islands
|
|
|
|
|
|
|
|
|
|
(1)
|
Except as
otherwise noted, each shareholders address is No. 9 Qinling Road, Yingbin
Road Centralized Industrial Park, Harbin Development Zone, Heilongjiang,
China 150078.
|
|
|
(2)
|
Except as
otherwise noted, all shares are owned of record and beneficially.
|
|
|
(3)
|
XD is the
holder of 1,000,000 shares of convertible Series A preferred stock of the
Company convertible approximately 1:38.2 into 38,194,072 shares of Common
Stock of the Company. XD also is the holder of 1,000,000 shares of Series B
Preferred Stock which has voting power equivalent to 40% of the total voting
power of the Company.
|
|
|
Item 13.
|
Certain Relationships and Related
Transactions, and Director Independence
|
Related Party Transactions
Jie
Han, our Chief Executive Officer, is affiliated with two companies that have
engaged in transactions with Xinda during the past two years. Mr. Han has used
these two companies as a source of raw materials and equipment financing for
Xinda, in order to reduce Xindas working capital expenses.
Harbin
Xinda High-Tech Co., Ltd. (Xinda High-Tech) was founded by incumbent president
of Xinda, Mr. Jie Han, in July 2003. Xinda Hegh-Tech is mainly engaged in
production of electrical wire and wire harness and transactions of plastic
materials. Mr. Jie Han transferred 89.29% shares he held in Xinda High-Tech to
his wife Mrs. Limei Sun. However, High-Tech does not manufacture modified
plastics in competition with Xinda. Xinda has engaged in transactions with
Xinda High-Tech since 2007. The relationship has three aspects: an Asset
Purchase Agreement, a lease contract and certain raw material purchases.
On
September 20, 2008, Xinda signed the Asset Purchase Agreement with Xinda
High-Tech that was discussed in the Business section of this Report. The
Asset Purchase Agreement provides that Xinda will purchase from Xinda High-Tech
six buildings, 19 assembly lines, and the related land use right. The buildings
were recently built by Xinda High-Tech; the assembly lines were recently
purchased by Xinda High-Tech, and have never been used.
32
Xinda
High-Tech made the purchase for the benefit of Xinda because Xinda High-Tech is
eligible to receive low-cost government financing that is not available to
Xinda.
At
the beginning of 2008, Mr. Han decided that Xinda should lease the plant and
facilities of Xinda High-Techs newly-built automotive modified plastics
production base. The parties entered into a lease contract for premises located
at No. 9, Dalian North Road, Haping Road Centralized Industrial Park, Harbin
Development Zone, Heilongjiang Province, China, with an area of 23,893.53
square meters. The lease term was from May 1, 2008 to April 30, 2011. The lease
payment was 2 million RMB per year.
In
September 2008, as a result of the adjustment of Chinese industrial policy, the
influence of international financial situation and the credit squeeze policy of
the financial institutions, Xinda High-Techs lending bank requires Xinda
High-Tech to pay all the due loans by the end of 2009. If Xinda High-Tech
defaults, the bank will consider foreclosure based on the negotiation results
of the parties. Considering Xindas overall business interest, Mr. Han decided
that Xinda should purchase from Xinda High-Tech all assets related to the
production of automotive modified plastics.
The
purchase price paid by Xinda to Xinda High-Tech will be 240 million RMB
(currently, USD$35,139,092). Payment of 50 million RMB by Xinda is due at the
end of December 2008; the remaining 190 million is due at the end of September
2009. If Xinda is unable to make the payment scheduled for the end of 2008, the
parties expect that the due date will be extended. However, Xinda will be
responsible for any accumulated interests related to such past due payments.
Xina High-Tech also agreed not to engage in the relevant production and sales
in competition of Xindas major business.
Xinda
High-Tech paid 265 million RMB (USD$38 million) to purchase the equipments and
facilities for the production of automotive modified plastics. The purchase
price of Xinda is RMB 240 million, which is 10% lower that the assets original
history cost. By using acquisition to expand production capacity, Xinda has
realized its sales plan two years earlier than constructing the plant itself.
The acquisition also saves the costs increased by price inflation. Due to the
increased value of Chinas property and land usage, the assets have great
potential of increasing in value.
During
the year ended December 31, 2008, Xinda purchased raw materials from Xinda
High-Tech for a purchase price of $869,491. Such raw materials are used to test
the new equipments Xinda High-Tech recently purchased. The purchase price
represents the cost incurred by Xinda High-Tech for the goods.
On
February 21, 2009, Xinda entered into an amendment to that certain Asset
Purchase Agreement (Purchase Agreement) by and between Xinda and Xinda
High-Tech., dated September 20, 2008. The amendment provides that the payment
date under the Purchase Agreement has been extended to on or before December
31, 2009.
33
Heilongjiang
Xinda Hyundai Engineering Plastics Co, Ltd (Heilongjiang Xinda Hyundai.
Heilongjiang Xinda Hyundai Engineering Plastics Co, Ltd. is a company owned 25%
by Hyundai Engineering Plastics Co, Ltd, and 75% by Xinda High-Tech. Since its
organization, Heilongjiang Xinda Hyundai has no operations other than the sale
of small amounts of raw materials for the plastics. In October of 2008, the
Board approved the resolution to liquidate the company. Under this
circumstance, Heilongjiang Xinda Hyundai agreed to sell its raw materials to
Xinda at their purchase prices. During 2007 Xinda paid $440,554 to Hyundai
Engineering Plastics Co, Ltd. for these raw materials, $ 223,455 in the year
2008 to the same company. The purchase prices represent the cost incurred by
Hyundai Engineering Plastics Co, Ltd. for the raw materials.
As of December
31, 2008, the Company has borrowed a total amount of $332,283 from Mr. Jie Han
and $214,951 from Ms. Qiuyao Piao.. The loans are intended to be interest free
and due upon demand .Other than the aforesaid relationships and transactions,
none of our officers or directors has engaged in any transaction during the
past fiscal year or the current fiscal year that had a transaction value in
excess of $60,000.
|
|
Item 14.
|
Principal Accountant Fees and Services
|
For
the fiscal years ended December 31, 2008 and December 31, 2007, Bagell Josephs,
Levine & Company, LLC and Robison, Hill & Co., respectively, have
billed us the following fees for services rendered in connection with the audit
and other services in respect to these years:
|
|
|
|
|
|
|
|
|
|
2008
|
|
2007
|
|
|
|
|
|
|
|
Audit Fees (1)
|
|
$
|
95,000
|
|
$
|
13,855
|
|
|
|
|
|
|
|
|
|
Tax Fees (2)
|
|
$
|
|
|
$
|
145
|
|
|
|
|
|
|
|
|
|
All Other Fees (3)
|
|
$
|
2,500
|
|
$
|
0
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
97,500
|
|
$
|
14,000
|
]
|
|
|
(1)
|
Services rendered for the
audit of our annual financial statements included in our report on Form 10-K
and the reviews of the financial statements included in our reports on Form
10-Q filed with the SEC.
|
|
|
(2)
|
Services in connection
with the preparation of tax returns and the provision of tax advice.
|
|
|
(3)
|
Services related to other
miscellaneous securities filings
|
All
(100%) of the fees described above were approved by our Board of Directors.
34
|
|
Item 15.
|
Exhibits, Financial Statement Schedules.
|
|
|
|
|
|
Exhibit
Number
|
|
Description
of Exhibit
|
|
Footnote
Reference
|
|
|
|
|
|
3.1
|
|
Certificate of
Incorporation
|
|
(1)
|
|
|
|
|
|
3.2
|
|
Amended and Restated
Certificate of Incorporation
|
|
(1)
|
|
|
|
|
|
3.3
|
|
By-laws
|
|
(1)
|
|
|
|
|
|
4.0
|
|
Stock Certificate
|
|
(1)
|
|
|
|
|
|
10.1
|
|
Agreement and Plan of Merger
dated December 24, 2008 among the Company and the shareholders of Favor Sea
Limited.
|
|
(2)
|
|
|
|
|
|
10.2
|
|
Designation Certificate of Series A Preferred Stock
|
|
(2)
|
|
|
|
|
|
10.3
|
|
Designation Certificate of Series B Preferred Stock
|
|
(2)
|
|
|
|
|
|
10.4
|
|
Asset Purchase Agreement dated September 20, 2008 between Harbin
Xinda Macromolecule Material Co., Ltd. and Harbin Xinda High-Tech Co., Ltd.
|
|
(2)
|
|
|
|
|
|
16.1
|
|
Letter, dated December 31, 2008, from Robison, Hill & Co. to the
Securities and Exchange Commission.
|
|
(2)
|
|
|
|
|
|
21.1
|
|
Subsidiaries of Registrant
|
|
*
|
|
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer Required Under Section
302 of Sarbanes-Oxley Act of 2002
|
|
*
|
|
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer Required Under Section
302 of Sarbanes-Oxley Act of 2002
|
|
*
|
|
|
|
|
|
32.1
|
|
Certification of Principal Executive Officer and Principal Financial
Officer Required Under Section 906 of Sarbanes-Oxley Act of 2002
|
|
*
|
|
|
|
|
|
32.2
|
|
Certification of Principal Financial Officer and Principal Financial
Officer Required Under Section 906 of Sarbanes-Oxley Act of 2002
|
|
*
|
|
|
|
*
|
Filed herewith.
|
|
|
+
|
Management contract or
compensatory plan or arrangement.
|
|
|
(1)
|
Filed as an exhibit to the
Companys registration statement on Form SB-2, as filed with the Securities
and Exchange Commission on May 12, 2006, and incorporated herein by this
reference.
|
|
|
(2)
|
Filed as an exhibit to the
Companys current report on Form 8-K, as filed with the Securities and
Exchange Commission on December 31, 2008, and incorporated herein by this
reference.
|
35
|
|
|
|
|
Exhibit
Number
|
|
Description of Exhibit
|
Footnote
Reference
|
|
|
|
|
|
3.1
|
|
Certificate
of Incorporation
|
|
(1)
|
|
|
|
|
|
3.2
|
|
Amended and
Restated Certificate of Incorporation
|
|
(1)
|
|
|
|
|
|
3.3
|
|
By-laws
|
|
(1)
|
|
|
|
|
|
4.0
|
|
Stock
Certificate
|
|
(1)
|
|
|
|
|
|
10.1
|
|
Agreement
and Plan of Merger dated December 24, 2008 among the Company and the
shareholders of Favor Sea Limited.
|
|
(2)
|
|
|
|
|
|
10.2
|
|
Designation
Certificate of Series A Preferred Stock
|
|
(2)
|
|
|
|
|
|
10.3
|
|
Designation
Certificate of Series B Preferred Stock
|
|
(2)
|
|
|
|
|
|
10.4
|
|
Asset
Purchase Agreement dated September 20, 2008 between Harbin Xinda
Macromolecule Material Co., Ltd. and Harbin Xinda High-Tech Co., Ltd.
|
|
(2)
|
|
|
|
|
|
16.1
|
|
Letter,
dated December 31, 2008, from Robison, Hill & Co. to the Securities and
Exchange Commission.
|
|
(2)
|
|
|
|
|
|
21.1
|
|
Subsidiaries of Registrant
|
|
*
|
|
|
|
|
|
31.1
|
|
Certification of Principal Executive Officer Required Under Section
302 of Sarbanes-Oxley Act of 2002
|
|
*
|
|
|
|
|
|
31.2
|
|
Certification of Principal Financial Officer Required Under Section
302 of Sarbanes-Oxley Act of 2002
|
|
*
|
|
|
|
|
|
32.1
|
|
Certification of Principal Executive Officer and Principal Financial
Officer Required Under Section 906 of Sarbanes-Oxley Act of 2002
|
|
*
|
|
|
|
|
|
32.2
|
|
Certification of Principal Financial Officer and Principal Financial
Officer Required Under Section 906 of Sarbanes-Oxley Act of 2002
|
|
*
|
36
|
|
*
|
Filed herewith.
|
|
|
+
|
Management contract or compensatory plan or arrangement.
|
|
|
(1)
|
Filed as an
exhibit to the Companys registration statement on Form SB-2, as filed with
the Securities and Exchange Commission on May 12, 2006, and incorporated
herein by this reference.
|
|
|
(2)
|
Filed as an
exhibit to the Companys current report on Form 8-K, as filed with the Securities
and Exchange Commission on December 31, 2008, and incorporated herein by this
reference.
|
|
|
37
Signatures
Pursuant
to the requirements of Section 13 or 15(d) 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.
|
|
|
|
XD PLASTICS COMPANY LIMITED
|
|
|
|
Dated: March
23, 2009
|
By:
|
/s/ Jie Han
|
|
|
|
|
Name:
|
Jie Han
|
|
Title:
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
By:
|
/s/ Jie Han
|
|
|
|
|
Name:
|
Jie Han
|
|
Title:
|
Chief Financial Officer
|
|
|
(Principal Accounting and Financial
Officer)
|
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has
been signed below by the following persons on behalf of the registrant and in
the capacities and on the dates indicated.
|
|
|
|
|
|
/s/ Jie Han
|
|
|
|
|
|
Jie Han
|
Director, Chairman of the Board
|
March 23, 2009
|
|
|
|
/s/ Qingwei Ma
|
|
|
|
|
|
Qingwei Ma
|
Director
|
March 23, 2009
|
|
|
|
/s/ Junjie Ma
|
|
|
|
|
|
Junjie Ma
|
Director
|
March 23, 2009
|
China XD Plastics (CE) (USOTC:CXDC)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
China XD Plastics (CE) (USOTC:CXDC)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024