TIDMBODI
RNS Number : 5967W
Bodisen Biotech Inc
22 November 2010
Bodisen Biotech, Inc. reports Unaudited Third Quarter Financial
Results
Review & Extracts of the Form10-Q as required by the
Securities & Exchange Commission
Bodisen Biotech, Inc. (the "Company") (London AIM: BODI; OTC
Pink Sheets: BBCZ; website: www.bodisen.com) today announced its
third quarter results for the period ended September 30, 2010 which
are extracted from the Company's Form 10-Q filed with the SEC.
Highlights
- Revenues for the 9 months ended 30 September 2010 were up 74%
at $5.661m on the comparable period (2009: $3.246m) impacted by
economic recovery and the launch of new products.
- The Company achieved a gross profit of $1,437,551 against a
gross profit for the comparable period (2009: $526,211).
- Diluted EPS was $0.08 compared with ($0.01) in the same period
last year.
Results of Operations
Revenue: We generated revenue of $5,661,715 for the nine months
ended September 30, 2010, an increase of $2,415,259 or 74%,
compared to $3,246 456 for the nine months ended September 30,
2009. The increase in revenue is primarily attributable to the
overall recovery of the economic environment and the launch of new
products in May 2010.
Gross Profit: We achieved a gross profit of $1,437,551 for the
nine months ended September 30, 2010 an increase of $911,340 or
173%, compared to $526,211 for the nine months ended September 30,
2009. Gross margin (gross profit as a percentage of revenues), was
25% for the nine months ended September 30, 2010, compared to 16%
for the nine months ended September 30, 2009. The increase in the
gross margin percentage was primarily attributable to the higher
profit margins due to higher profit margins on new products.
Selling Expenses: Aggregated selling expenses accounted for
$372,021 of our operating expenses for the nine months ended
September 30, 2010, an increase of $329,087 or 766%, compared to
$42,934 for the nine months ended September 30, 2009. The increase
in our aggregated selling expenses is primarily attributable to an
increase in marketing promotion and advertising programs.
General and Administrative Expenses: General and administrative
expenses accounted for $2,418,410 of our operating expenses for the
nine months ended September 30, 2010, an increase of $1,623,524 or
204%, compared to $794,886 for the nine months ended September 30,
2009. The increase in general and administrative expenses is
primarily attributable to a bad debt expense in 2010 compared to
2009. During the nine months ended September 30, 2009, the Company
recorded a bad debt expense of $104,254 compared to a charge to bad
debts of $897,017 for the nine months ended September 30, 2010.
Also, included in general and administrative expenses is the write
off of a deposit for $735,500 for the nine months ended September
30, 2010.
Non Operating Income and Expenses:We had total non-operating
expense of $139,518 for the nine months ended September 30, 2010 a
change of $411 008 compared to income of $271,490 for the nine
months ended September 30, 2009. Other income (expense) was
$(81,372) for the nine months ended September 30, 2010 compared to
$(1,787) for the nine months ended September 30, 2009. Also
included in non-operating income (expense) for the nine months
ended September 30, 2009 is a loss of $211,639 related to a loss on
the sale of investment and a gain of $484,728 related to equity
income of an investment that we account for under the equity
method. During the nine months ended September 30, 2010, we did not
incur any gains or losses related to the sale on investment or
equity income in investment.
About Bodisen Biotech, Inc.
Bodisen Biotech, Inc. is a manufacturer of liquid and organic
compound fertilizers, pesticides, insecticides and agricultural raw
material certified by the Petroleum Chemical Industry
Administrative office of China (Chemical Petroleum Production
Administrative Bureau), Shaanxi provincial government and Chinese
government. The company is headquartered in Shaanxi province and is
a Delaware corporation. The company files annual and periodic
reports with the U.S. Securities and Exchange Commission, which are
accessible at www.sec.gov.
Safe Harbor Statement
This press release may contain forward-looking statements within
the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These statements are
based on the current expectations or beliefs of Bodisen Biotech,
Inc. management and are subject to a number of factors and
uncertainties that could cause actual results to differ materially
from those described in the forward-looking statements.
Enquiries:
Charles Stanley Securities
Russell Cook / Carl Holmes 020 7149 6000
Bodisen Biotech, Inc.
Bo Chen - Chairman & CEO
Wang Chunsheng - Chief Operations Officer 0086 29 8707 4957
Investor Relations
Jessica S. Yuan
Sichenzia Ross Friedman Ference LLP 001 646 810-0607
JYuan@SRFF.COM
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE
INCOME (LOSS) FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30,
2010 AND 2009
Three Months Ended Nine Months Ended
September 30, September 30,
2010 2009 2010 2009
(unaudited) (unaudited) (unaudited) (unaudited)
$ $ $ $
Net Revenue 2,209,724 56,090 5,661,715 3,246,456
Cost of Revenue 1,559,565 503,530 4,224,164 2,720,245
------------ ------------ ------------ ------------
Gross profit/(loss) 650,159 (447,440) 1,437,551 526,211
Operating expenses:
Selling expenses 25,835 15,816 372,021 42,934
General and
administrative
expenses 956,675 494,744 2,418,410 794,886
Writedown of assets - - 104,254
------------ ------------ ------------ ------------
Total operating
expenses 982,510 510,560 2,790,431 942,074
Loss from operations (332,351) (958,000) (1,352,880) (415,863)
Non-operating income
(expense):
Other income
(expense) (61,531) (503) (81,372) (1,787)
Interest income 5,826 82 13,712 396
Interest expense (40,438) (60) (61,561) (208)
Loss on disposal of
property and
equipment (10,297) - (10,297) -
Loss on the sale of
investment - (29) - (211,639)
Equity income in
investment - 177,826 - 484,728
------------ ------------ ------------ ------------
Total
non-operating
income (expense) (106,440) 177,316 (139,518) 271,490
Loss before provision
for income taxes (438,791) (780,684) (1,492,398) (144,373)
Provision (benefit)
for income taxes - - -
Net loss (438,791) (780,684) (1,492,398) (144,373)
Other comprehensive
income (loss):
Foreign currency
translation gain 653,271 55,167 821,389 259
Unrealised gain
(loss) on marketable
equity security 201,859 (7,161,275) 1,312,083 (2,270,145)
------------ ------------ ------------ ------------
Comprehensive loss 416,339 (7,886,792) 641,074 (2,414,259)
============ ============ ============ ============
Weighted average
shares outstanding :
Basic 18,710,250 18,710,250 18,710,250 18,710,250
============ ============ ============ ============
Diluted 18,710,250 18,710,250 18,710,250 18,710,250
============ ============ ============ ============
Earnings per share:
Basic (0.02) (0.04) (0.08) (0.01)
============ ============ ============ ============
Diluted (0.02) (0.04) (0.08) (0.01)
============ ============ ============ ============
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2010 AND DECEMBER 31, 2009
September December
30, 31,
2010 2009
(unaudited) (as restated)
$ $
ASSETS
CURRENT ASSETS:
Cash and cash equivalents 3,603,356 4,824,135
Accounts receivable and other receivable,
net of allowance for
doubtful accounts of $669,672 and $2,196,072 4,340,852 2,346,583
Note receivable 1,497,000 -
Other receivables 22,953 26,298
Inventory, net 2,432,490 991,140
Advances to suppliers 209,705 541,754
Prepaid expense and other current assets 9,647 966,942
Total current assets 12,116,003 9,696,852
PROPERTY AND EQUIPMENT, net 11,480,500 11,837,406
CONSTRUCTION IN PROGRESS 10,650,752 10,422,641
MARKETABLE SECURITY, AVAILABLE-FOR-SALE 9,487,373 8,175,290
INTANGIBLE ASSETS, net 4,805,859 4,873,904
TOTAL ASSETS 48,540,487 45,006,093
============ ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 1,563,458 71,504
Deferred revenue 829,547 917,147
Accrued expenses and other payables 153,639 161,673
Total current liabilities 2,546,644 1,150,324
Long-term note payable 1,497,000 -
TOTAL LIABILITIES 4,043,644 1,150,324
------------ --------------
STOCKHOLDERS' EQUITY:
Preferred stock, $0.0001 per share; authorized
5,000,000 shares; nil issued and outstanding
Common stock, $0.0001 per share; authorized
30,000,000 shares; issued and outstanding
18,710,250 and 18,710,250 1,871 1,871
Additional paid-in capital 33,945,822 33,945,822
Other comprehensive income 15,606,779 13,473,307
Statutory reserve 4,314,488 4,314,488
Accumulated deficit (9,372,117) (7,879,719)
Total stockholders' equity 44,496,843 43,855,769
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 48,540,487 45,006,093
============ ============
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009
Nine Months Ended September
30,
------------------------------
2010 2009
------------- ---------------
(unaudited) (unaudited)
(as restated)
$ $
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss (1,492,398) (144,373)
Adjustments to reconcile net
loss to net cash used in operating
activities:
Depreciation and amortization 757,672 557,736
Loss on disposal of fixed asset - 104,254
Loss on the sale of investment - 211,610
Allowance (recovery) of bad
debts 897,017 104,736
Equity income in investment - (484,728)
(Increase) / decrease in assets:
Accounts receivable (3,366,551) (918,350)
Other receivables 3,815 303,819
Inventory (1,396,400) 1,276,509
Advances to suppliers 337,168 (486,562)
Prepaid expense 960,100 49,356
Increase / (decrease) in current
liabilities:
Accounts payable 1,464,814 (586,759)
Deferred revenue 438,646 (613,428)
Accrued expenses 62,933 (16,917)
Other payables 55,673 -
Net cash used in operating activities (1,277,511) (643,097)
------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES
Disposal of property and equipment (4,292) -
Additions to construction in
progress - (15,287)
Decrease in construction in
progress (14,710) -
Proceeds from sale of investment - 735,656
Loan receivable (1,471,000) -
Net cash provided by (used in)
investing activities (1,490,002) 720,369
------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issuance of long-term
debt 1,471,000 -
Net cash provided by investing
activities 1,471,000 -
------------- ---------------
Effect of exchange rate changes
on cash and cash equivalents 75,734 934
------------- ---------------
NET INCREASE (DECREASE) IN CASH
& CASH EQUIVALENTS (1,220,779) 78,206
CASH & CASH EQUIVALENTS, BEGINNING
OF PERIOD 4,824,135 90,716
------------- ---------------
CASH & CASH EQUIVALENTS, END
OF PERIOD 3,603,356 168,922
============= ===============
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Interest paid - -
============= ===============
Income taxes paid - -
============= ===============
SUPPLEMENTAL NON-CASH INVESTING
AND FINANCING ACTIVITIES:
Transfer of construction in
process to property and equipment - 7,166,581
============= ===============
NOTES
Note 1 - Organization and Basis of Presentation
The unaudited consolidated financial statements have been
prepared by Bodisen Biotech, Inc., a Delaware corporation (the
"Company" or "Bodisen"), pursuant to the rules and regulations of
the Securities Exchange Commission ("SEC"). The information
furnished herein reflects all adjustments (consisting of normal
recurring accruals and adjustments) which are, in the opinion of
management, necessary to fairly present the operating results for
the respective periods. Certain information and footnote
disclosures normally present in annual consolidated financial
statements prepared in accordance with accounting principles
generally accepted in the United States of America have been
omitted pursuant to such rules and regulations. These consolidated
financial statements should be read in conjunction with the audited
consolidated financial statements and footnotes included in the
Company's Annual Report on Form 10-K. The results for the nine
months ended September 30, 2010 are not necessarily indicative of
the results to be expected for the full year ending December 31,
2010.
Organization and Line of Business
The accompanying consolidated financial statements include the
accounts of Bodisen Biotech, Inc., its 100% wholly-owned
subsidiaries Bodisen Holdings, Inc. (BHI), Yang Ling Bodisen
Agricultural Technology Co., Ltd ("Agricultural"), which was
incorporated in March 2005, and Sinkiang Bodisen Agriculture
Material Co., Ltd. ("Material"), which was incorporated in June
2006, as well as the accounts of Agricultural's 100% wholly- owned
subsidiary Yang Ling Bodisen Biology Science and Technology
Development Company Limited ("BBST"). The Company is engaged in
developing, manufacturing and selling organic fertilizers, liquid
fertilizers, pesticides and insecticides in the People's Republic
of China and produce numerous proprietary product lines, from
pesticides to crop-specific fertilizers. The Company markets and
sells its products to distributors throughout the People's Republic
of China, and these distributors, in turn, sell the products to
farmers.
Basis of Presentation
The accompanying consolidated financial statements have been
prepared in conformity with accounting principles generally
accepted in the United States of America. All significant
intercompany transactions and balances have been eliminated. The
Company's functional currency is the Chinese Yuan Renminbi ("RMB");
however the accompanying consolidated financial statements have
been translated and presented in United States Dollars ($ or
"USD").
Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of Bodisen Biotech, Inc., and its subsidiaries. All
significant inter-company accounts and transactions have been
eliminated in consolidation.
Note 2 - Summary of Significant Accounting Policies
Reclassifications
Certain amounts in the 2009 consolidated financial statements
have been reclassified to conform with the 2010 presentation with
no effect to previously reported net income (loss).
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions. These estimates and assumptions
affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ
from those estimates. It is possible that accounting estimates and
assumptions may be material to the Company due to the levels of
subjectivity and judgment involved.
Cash and Cash Equivalents
Cash and cash equivalents include cash in hand and cash in time
deposits certificates of deposit and all highly liquid debt
instruments with original maturities of three months or less.
Accounts Receivable
The Company maintains reserves for potential credit losses for
accounts receivable. Management reviews the composition of accounts
receivable and analyzes historical bad debts, customer
concentrations, customer credit worthiness, current economic trends
and changes in customer payment patterns to evaluate the adequacy
of these reserves. Reserves are recorded based on the Company's
historical collection history.
Advances to Suppliers
The Company advances to certain vendors for purchase of its
material. The advances to suppliers are interest free and
unsecured.
Inventories
Inventories are valued at the lower of cost (determined on a
weighted average basis) or market. The Management compares the cost
of inventories with the market value and allowance is made for
writing down their inventories to market value, if lower.
Property & Equipment and Capital Work In Progress
Property and equipment are stated at cost. Expenditures for
maintenance and repairs are charged to earnings as incurred;
additions, renewals and betterments are capitalized. When property
and equipment are retired or otherwise disposed of, the related
cost and accumulated depreciation are removed from the respective
accounts, and any gain or loss is included in operations.
Depreciation of property and equipment is provided using the
straight-line method for substantially all assets with estimated
lives of:
Operating equipment 10 years
Vehicles 8 years
Office equipment 5 years
Buildings 30 years
The following are the details of the property and equipment at
September 30, 2010 and December 31, 2009, respectively:
September 30, December 31,
2010 2009
$ $
-------------- -------------
Operating equipment 4,747,269 4,650,919
Vehicles 701,856 687,791
Office equipment 90,375 87,552
Buildings 8,835,190 8,656,077
-------------- -------------
14,374,690 14,082,339
Less accumulated depreciation (2,984,190) (2,244,933)
-------------- -------------
Property and equipment, net 11,480,500 11,837,406
============== =============
Depreciation expense for the three and nine months ended
September 30, 2010 and 2009 was $201,344 and $592,870 and $206,863
and $393,492, respectively.
On September 30, 2010 and December 31, 2009, the Company had
"Capital Work in Progress" representing the construction in
progress of the Company's manufacturing plant amounting $10,650,752
and $10,422,641. During the nine months ended September 30, 2010,
there were no transfers from construction in progress to property
and equipment.
Marketable Securities
The Company applies the guidance of ASC Topic 320
"Investments-Debt and Equity Securities," which requires
investments in equity securities to be classified as either trading
securities or available-for-sale securities. Marketable securities
that are bought and held principally for the purpose of selling
them in the near term are classified as trading securities and are
reported at fair value, with unrealized gains and losses recognized
in earnings. Marketable equity securities not classified as trading
are classified as available for sale, and are carried at fair
market value, with the unrealized gains and losses, net of tax,
included in the determination of comprehensive income and reported
in shareholders' equity.
Long-Lived Assets
The Company applies the provisions of ASC Topic 360, "Property,
Plant, and Equipment," which addresses financial accounting and
reporting for the impairment or disposal of long-lived assets. ASC
360 requires impairment losses to be recorded on long-lived assets
used in operations when indicators of impairment are present and
the undiscounted cash flows estimated to be generated by those
assets are less than the assets' carrying amounts. In that event, a
loss is recognized based on the amount by which the carrying amount
exceeds the fair value of the long-lived assets. Loss on long-lived
assets to be disposed of is determined in a similar manner, except
that fair values are reduced for the cost of disposal. Based on its
review, the Company believes that as of September 30, 2010 and
December 31, 2009, there was no significant impairment of its
long-lived assets.
Intangible Assets
Intangible assets consist of Rights to use land and Fertilizers
proprietary technology rights. The Company evaluates intangible
assets for impairment, at least on an annual basis and whenever
events or changes in circumstances indicate that the carrying value
may not be recoverable from its estimated future cash flows.
Recoverability of intangible assets, other long-lived assets and,
goodwill is measured by comparing their net book value to the
related projected undiscounted cash flows from these assets,
considering a number of factors including past operating results,
budgets, economic projections, market trends and product
development cycles. If the net book value of the asset exceeds the
related undiscounted cash flows, the asset is considered impaired,
and a second test is performed to measure the amount of impairment
loss.
Fair Value of Financial Instruments
For certain of the Company's financial instruments, including
cash and cash equivalents, restricted cash, accounts receivable,
accounts payable accrued liabilities and short-term debt, the
carrying amounts approximate their fair values due to their short
maturities. In addition the Company has long-term debt with
financial institutions. The carrying amounts of the line of credit
and other long-term liabilities approximate their fair values based
on current rates of interest for instruments with similar
characteristics.
ASC Topic 820, "Fair Value Measurements and Disclosures,"
requires disclosure of the fair value of financial instruments held
by the Company. ASC Topic 825, "Financial Instruments," defines
fair value, and establishes a three-level valuation hierarchy for
disclosures of fair value measurement that enhances disclosure
requirements for fair value measures. The carrying amounts reported
in the consolidated balance sheets for receivables and current
liabilities each qualify as financial instruments and are a
reasonable estimate of their fair values because of the short
period of time between the origination of such instruments and
their expected realization and their current market rate of
interest. The three levels of valuation hierarchy are defined as
follows:
-- Level 1 inputs to the valuation methodology are quoted prices
for identical assets or liabilities in active markets.
-- Level 2 inputs to the valuation methodology include quoted
prices for similar assets and liabilities in active markets, and
inputs that are observable for the asset or liability, either
directly or indirectly, for substantially the full term of the
financial instrument.
-- Level 3 inputs to the valuation methodology are unobservable
and significant to the fair value measurement.
The Company analyzes all financial instruments with features of
both liabilities and equity under ASC 480, "Distinguishing
Liabilities from Equity," and ASC 815.
The following table represents our assets and liabilities by
level measured at fair value on a recurring basis as of September
30, 2010.
Description Level 1 Level 2 Level
3
---------------------- ---------- -------- ------
Assets:
Marketable securities $ 9,487,373 $ - $ -
The Company did not identify any other non-recurring assets and
liabilities that are required to be presented in the consolidated
balance sheets at fair value in accordance with ASC 825.
Revenue Recognition
The Company's revenue recognition policies are in compliance
with Staff accounting bulletin (SAB) 104. Because collection is not
reasonably assured, sales revenue is recognized using the cost
recovery method. Under the cost recovery method, no profit is
recognized until cash payments exceed the cost of the goods
sold.
Advertising Costs
The Company expenses the cost of advertising as incurred or, as
appropriate, the first time the advertising takes place.
Advertising costs for the three and nine months ended September 30,
2010 and 2009 were insignificant.
Stock-Based Compensation
The Company records stock-based compensation in accordance with
ASC Topic 718, "Compensation - Stock Compensation." ASC 718
requires companies to measure compensation cost for stock-based
employee compensation at fair value at the grant date and recognize
the expense over the employee's requisite service period. The
Company recognizes in the statement of operations the grant-date
fair value of stock options and other equity-based compensation
issued to employees and non-employees. There were 426,000 options
outstanding as of September 30 2010.
Income Taxes
The Company accounts for income taxes in accordance with ASC
Topic 740, "Income Taxes." ASC 740 requires a company to use the
asset and liability method of accounting for income taxes, whereby
deferred tax assets are recognized for deductible temporary
differences, and deferred tax liabilities are recognized for
taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities
and their tax bases. Deferred tax assets are reduced by a valuation
allowance when, in the opinion of management, it is more likely
than not that some portion, or all of, the deferred tax assets will
not be realized. Deferred tax assets and liabilities are adjusted
for the effects of changes in tax laws and rates on the date of
enactment.
Under ASC 740, a tax position is recognized as a benefit only if
it is "more likely than not" that the tax position would be
sustained in a tax examination, with a tax examination being
presumed to occur. The amount recognized is the largest amount of
tax benefit that is greater than 50% likely of being realized on
examination. For tax positions not meeting the "more likely than
not" test, no tax benefit is recorded. The adoption had no effect
on the Company's consolidated financial statements.
In March 2005, Bodisen Biotech Inc. formed Agricultural. Under
Chinese law, a newly formed wholly owned subsidiary of a foreign
company enjoys an income tax exemption for the first two years and
a 50% reduction of normal income tax rates for the following 3
years. In order to extend such tax benefits, in June 2005,
Agricultural completed a transaction with BBST, which resulted in
Agricultural owning 100% of BBST.
Foreign Currency Translation
The accounts of the Company's Chinese subsidiaries are
maintained in the RMB and the accounts of the U.S. parent company
are maintained in the USD. The accounts of the Chinese subsidiaries
are were translated into USD in accordance with Accounting
Standards Codification ("ASC") Topic 830 "Foreign Currency
Matters," with the RMB as the functional currency for the Chinese
subsidiaries. According to Topic 830, all assets and liabilities
were translated at the exchange rate on the balance sheet date,
stockholders' equity is translated at historical rates and
statement of operations items are translated at the weighted
average exchange rate for the period. The resulting translation
adjustments are reported under other comprehensive income in
accordance with ASC Topic 220, "Comprehensive Income." Gains and
losses resulting from the translations of foreign currency
transactions and balances are reflected in the statement of
operations.
Foreign Currency Transactions and Comprehensive Income
Accounting principles generally require that recognized revenue,
expenses, gains and losses be included in net income. Certain
statements however, require entities to report specific changes in
assets and liabilities, such as gain or loss on foreign currency
translation, as a separate component of the equity section of the
balance sheet. Such items, along with net income, are components of
comprehensive income. The functional currency of the Company's
Chinese subsidiaries is the Chinese Yuan Renminbi. Translation
gains of $8,949,138 and $8,127,749 at September 30, 2010 and
December 31, 2009, respectively are classified as an item of other
comprehensive income in the stockholders' equity section of the
consolidated balance sheet. During the three and nine months ended
September 30, 2010, other comprehensive income in the consolidated
statements of operations and other comprehensive income included
translation gains (loss) of $653,271 and $821,389, respectively and
$55,167 and $259 for the three and nine months ended September 30,
2009, respectively.
Basic and Diluted Earnings Per Share
Earnings per share is calculated in accordance with the ASC
Topic 260, "Earnings Per Share." Basic earnings per share is based
upon the weighted average number of common shares outstanding.
Diluted earnings per share is based on the assumption that all
dilutive convertible shares and stock warrants were converted or
exercised. Dilution is computed by applying the treasury stock
method. Under this method, warrants are assumed to be exercised at
the beginning of the period (or at the time of issuance, if later),
and as if funds obtained thereby were used to purchase common stock
at the average market price during the period. There were 426,000
and 436,000 options as of September 30, 2010 and 2009 that were
excluded from the diluted loss per share calculation due to their
anti-dilutive effect.
Statement of Cash Flows
In accordance with ASC Topic 230, "Statement of Cash Flows,"
cash flows from the Company's operations are calculated based upon
the local currencies using the average translation rates. As a
result, amounts related to assets and liabilities reported on the
consolidated statements of cash flows will not necessarily agree
with changes in the corresponding balances on the consolidated
balance sheets.
Segment Reporting
ASC Topic 280, "Segment Report," requires use of the "management
approach" model for segment reporting. The management approach
model is based on the way a company's management organizes segments
within the company for making operating decisions and assessing
performance. ASC Topic 280 has no effect on the Company's
consolidated financial statements as the Company consists of one
reportable business segment. All revenue is from customers in
People's Republic of China and all of the Company's assets are
located in People's Republic of China.
Note 3 - Note Receivable
The note receivable is unsecured; bears interest at 9.1% per
annum and is due on March 25, 2011.
Note 4 - Inventory
Inventory at September 30, 2010 and December 31, 2009 consisted
of the following:
September December 31,
30, 2010 2009
---------- -------------
Raw Material $ 1,684,375 $ 355,714
Packaging 7,476 59,729
Finished Goods 740,639 652,202
2,432,490 1,067,645
Less obsolescence reserve - (76,505)
---------- -------------
Inventory, net $ 2,432,490 $ 1,067,645
========== =============
Note 5 - Marketable Security
During 2008, the Company exchanged $3,291,264 of receivables for
a 28.8% ownership interest in a Chinese company, Shanxi Jiali
Pharmaceutical Co. Ltd ("Jiali"). The Company had written down the
value of this investment by $987,860 at December 31, 2008. This
investment was originally accounted for under the equity method and
the Company recorded equity income in this investment through
September 30, 2009. During the fourth quarter of 2009, Jiali was
purchased by China Pediatric Pharmaceuticals, Inc. ("China
Pediatric"), a public company. After the transaction, the Company
owned 18.8% of China Pediatric. The Company then changed the
accounting method for the investment from the equity method to the
fair value method. At the date of the change, the investment was
valued at $2 829,732. As of September 30, 2010 and December 31,
2009, the fair value of the investment is $9,487,373 and
$8,175,290, respectively, which is reflected in the consolidated
balance sheet. The company recognized an unrealized gain of
$201,859 and $1,312,083 for the three and nine months ended
September 30, 2010, respectively, and an unrealized loss of $7,161
275 and $2,270,145 for the three and nine months ended September
30, 2009, respectively, which is reflected as other comprehensive
income in the consolidated statement of stockholder's equity.
Note 6- Intangible Assets
Net intangible assets at September 30, 2010 and December 31,
2009 were as follows:
September December 31,
30, 2010 2009
------------ -------------
Rights to use land $ 5,101,968 $ 4,999,725
Fertilisers proprietary
technology rights 1,197,600 1,173,600
6,299,568 6,173,325
Less accumulated amortisation (1,493,709) (1,299,421)
------------ -------------
Intangibles, net $ 4,805,859 $ 4,873,904
============ =============
The Company's office and manufacturing site is located in Yang
Ling Agricultural High-Tech Industries Demonstration Zone in the
province of Shaanxi, People's Republic of China. The Company leases
land per a real estate contract with the government of People's
Republic of China for a period from November 2001 through November
2051. Per the People's Republic of China's governmental
regulations, the Government owns all land.
During July 2003, the Company leased another parcel of land per
a real estate contract with the government of the People's Republic
of China for a period from July 2003 through June 2053.
The Company has recognized the amounts paid for the acquisition
of rights to use land as intangible asset and amortizing over a
period of fifty years.
The Company acquired Fluid and Compound Fertilizers proprietary
technology rights on January 1, 2001with a life ending December 31,
2011. The Company is amortizing Fertilizers proprietary technology
rights over a period of ten years.
On July 15, 2008, the Company entered into a 50 year land rights
agreement.
Amortization expense for the Company's intangible assets
amounted to $55 244 and $164,802 for the three and nine months
ended September 30, 2010, respectively and $54,763 and $164,244 for
the three and nine months ended September 30, 2009,
respectively.
Note 7 - Long-Term Note Payable
On March 19, 2010, the Company obtained a bank loan for
10,000,000 RMB (approximately $1,437,000). The loan has an 8.1%
annual interest rate, matures on March 19, 2012 and is secured by
the Company's land and facility.
Note 8 - Stock Options
Stock Options
The following is a summary of the stock option activity:
Weighted
Average Aggregate
Options Exercise Intrinsic
Outstanding Price Value
------------ --------- ----------
Outstanding at December
31, 2009 $ 426,000 $ 1.07
Granted -
Cancelled -
Exercised -
------------
Outstanding at September
30, 2010 (unaudited) 426,000 $ 1.07
============
Exercisable at September
30, 2010 (unaudited) 426,000 $ 1.07 $ -
============
Note 9 - Statutory Common Welfare Fund
As stipulated by the Company Law of the People's Republic of
China (PRC) net income after taxation can only be distributed as
dividends after appropriation has been made for the following:
i. Making up cumulative prior years' losses, if any;
ii. Allocations to the "Statutory surplus reserve" of at least
10% of income after tax, as determined under PRC accounting rules
and regulations, until the fund amounts to 50% of the Company's
registered capital;
iii. Allocations of 5-10% of income after tax, as determined
under PRC accounting rules and regulations, to the Company's
"Statutory common welfare fund", which is established for the
purpose of providing employee facilities and other collective
benefits to the Company's employees; and
iv. Allocations to the discretionary surplus reserve, if
approved in the stockholders' general meeting.
Pursuant to the new Corporate Law effective on January 1, 2006,
there is now only one "Statutory surplus reserve" requirement. The
reserve is 10 percent of income after tax, not to exceed 50 percent
of registered capital.
The Company did not appropriate a reserve for the statutory
surplus reserve and welfare fund for the nine months ended
September 30, 2010 and 2009.
Note 10 - Factory Location and Lease Commitments
The Company's principal executive offices are located at North
Part of Xinquia Road, Yang Ling Agricultural High-Tech Industries
Demonstration Zone Yang Ling, Shaanxi province, People's Republic
of China. BBST owns two factories, which includes three production
lines, an office building one warehouse, and two research labs and,
is located on 10,900 square meters of land. These leases require
monthly rental payments of $2,546 and the leases expire in
2013.
Note 11 - Current Vulnerability Due to Certain
Concentrations
Two vendors provided 65% and 22% of the Company's raw materials
for the nine months ended September 30, 2010 and three vendors
provided 36.6%, 13.4% and 10.7% of the Company's raw materials for
the nine months ended September 30, 2009.
The Company's operations are carried out in the PRC.
Accordingly, the Company's business, financial condition and
results of operations may be influenced by the political, economic
and legal environments in the PRC, by the general state of the
PRC's economy. The Company's business may be influenced by changes
in governmental policies with respect to laws and regulations,
anti-inflationary measures, currency conversion and remittance
abroad, and rates and methods of taxation, among other things.
Note 12 - Restatement
The Company changed its revenue recognition policy to the cost
recovery method as the Company does not believe that collection is
reasonably assured. Under the cost recovery method, no profit is
recognized until cash payments exceed the cost of the goods sold
and the Company records deferred revenue which is the gross profit
that has not been realized. As a result of the change in the
revenue recognition policy, the Company has restated previously
issued financial statements.
The following adjustments were made to the financial statements
for the three and nine months ended September 30, 2009.
For the Three For the Three
Months Ended Months Ended
September September
30, 2009 30, 2009
As reported Adjustment Restated
(Unaudited) (Unaudited) (Unaudited)
$ $ $
Net revenue 472,957 (416,867) 56,090
Gross profit (30,573) (416,867) (447,440)
General and administrative
expenses 1,066,009 (571,265) 494,744
Total operating expenses 1,081,825 (571,265) 510,560
Income (loss) from operations (1,112,398) 154,398 (958,000)
Other income (expense) 177,316 - 177,316
Income (loss) before provision
for income taxes (935,082) 154,398 (780,684)
Net income (loss) (935,082) 154,398 (780,684)
Comprehensive loss (8,041,190) 154,398 (7,886,792)
Basic earnings (loss) per
share (0.05) (0.03) (0.08)
Diluted earnings (loss) per
share (0.05) (0.03) (0.08)
For the Nine For the Nine
Months Ended Months Ended
September September
30, 2009 30, 2009
As reported Adjustment Restated
(Unaudited) (Unaudited) (Unaudited)
$ $ $
Net revenue 3,078,485 167,971 3,246,456
Gross profit 358,240 167,971 526,211
General and administrative
expenses 207,593 587,293 794,886
Total operating expenses 354,781 587,293 942,074
Income (loss) from operations 3,459 (419,322) (415,863)
Income (loss) before provision
for income taxes 274,949 (419,322) (144,373)
Net income (loss) 274,949 (419,322) (144,373)
Comprehensive loss (1,994,937) (419,322) (2,414,259)
Basic earnings (loss) per
share 0.01 (0.02) (0.01)
Diluted earnings (loss) per
share 0.01 (0.02) (0.01)
Note 13 - Subsequent Events
Pursuant to Financial Accounting Standards Board Accounting
Standards Codification 855-10, the Company has evaluated all events
or transactions that occurred from October 1, 2010, through the
filing with the SEC. The Company did not have any material
recognizable subsequent events during this period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
QRTPGGGGGUPUGWP
Bodisen Biotech (LSE:BODI)
과거 데이터 주식 차트
부터 5월(5) 2024 으로 6월(6) 2024
Bodisen Biotech (LSE:BODI)
과거 데이터 주식 차트
부터 6월(6) 2023 으로 6월(6) 2024