Nevada
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04-3836208
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(State or other jurisdiction of incorporation or
organization)
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(I.R.S. Employer Identification No.)
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Large accelerated filer
☐
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Accelerated filer
☒
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Non-accelerated filer
☐
(Do not check if a smaller reporting company)
|
Smaller reporting company
☐
|
|
PAGE
|
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PART I. FINANCIAL INFORMATION
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2
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|
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Item 1. Financial Statements
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2
|
|
|
|
|
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Unaudited Condensed Consolidated Balance Sheets
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2
|
|
|
|
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Unaudited Condensed Consolidated Statements of Comprehensive Income
|
3
|
|
|
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Unaudited Condensed Consolidated Statements of Cash Flows
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4
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Notes to the Unaudited Condensed Consolidated Financial Statements
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5
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
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16
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
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29
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Item 4. Controls and Procedures
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29
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PART II. OTHER INFORMATION
|
30
|
|
|
|
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Item 1. Legal Proceedings
|
30
|
|
|
|
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Item 1A. Risk Factors
|
30
|
|
|
|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
30
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|
|
|
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Item 3. Defaults Upon Senior Securities
|
30
|
|
|
|
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Item 4. Mine Safety Disclosures
|
30
|
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|
|
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Item 5. Exhibits
|
30
|
|
|
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Signatures
|
31
|
|
Three-Month Period Ended June 30,
|
Six-Month Period Ended June 30,
|
||||||||||||||
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
|
US$
|
US$
|
US$
|
US$
|
||||||||||||
|
||||||||||||||||
Revenues
|
265,412,742
|
264,208,995
|
487,339,137
|
487,789,670
|
||||||||||||
Cost of revenues
|
(213,919,846
|
)
|
(211,909,052
|
)
|
(387,203,965
|
)
|
(388,841,389
|
)
|
||||||||
Gross profit
|
51,492,896
|
52,299,943
|
100,135,172
|
98,948,281
|
||||||||||||
|
||||||||||||||||
Selling expenses
|
(438,041
|
)
|
(135,625
|
)
|
(734,861
|
)
|
(257,953
|
)
|
||||||||
General and administrative expenses
|
(6,592,032
|
)
|
(4,553,144
|
)
|
(11,556,790
|
)
|
(8,349,508
|
)
|
||||||||
Research and development expenses
|
(6,659,310
|
)
|
(13,355,881
|
)
|
(12,473,173
|
)
|
(21,986,615
|
)
|
||||||||
Total operating expenses
|
(13,689,383
|
)
|
(18,044,650
|
)
|
(24,764,824
|
)
|
(30,594,076
|
)
|
||||||||
|
||||||||||||||||
Operating income
|
37,803,513
|
34,255,293
|
75,370,348
|
68,354,205
|
||||||||||||
|
||||||||||||||||
Interest income
|
2,466,291
|
3,454,649
|
4,894,362
|
6,490,014
|
||||||||||||
Interest expense
|
(11,038,295
|
)
|
(11,614,261
|
)
|
(21,667,648
|
)
|
(20,194,238
|
)
|
||||||||
Foreign currency exchange gains (losses)
|
322,056
|
406,479
|
231,641
|
(72,711
|
)
|
|||||||||||
Gains (losses) on foreign currency forward contracts
|
305,825
|
(934,765
|
)
|
660,344
|
(934,765
|
)
|
||||||||||
Change in fair value of warrants liability
|
-
|
(906,006
|
)
|
-
|
(1,068,745
|
)
|
||||||||||
Government grant
|
4,814
|
12,974
|
4,814
|
1,324,213
|
||||||||||||
Total non-operating expense, net
|
(7,939,309
|
)
|
(9,580,930
|
)
|
(15,876,487
|
)
|
(14,456,232
|
)
|
||||||||
|
||||||||||||||||
Income before income taxes
|
29,864,204
|
24,674,363
|
59,493,861
|
53,897,973
|
||||||||||||
|
||||||||||||||||
Income tax expense
|
(4,385,601
|
)
|
(4,837,703
|
)
|
(8,611,232
|
)
|
(12,065,262
|
)
|
||||||||
|
||||||||||||||||
Net income
|
25,478,603
|
19,836,660
|
50,882,629
|
41,832,711
|
||||||||||||
|
||||||||||||||||
Earnings per common share:
|
||||||||||||||||
Basic and diluted
|
0.39
|
0.30
|
0.77
|
0.64
|
||||||||||||
|
||||||||||||||||
Net Income
|
25,478,603
|
19,836,660
|
50,882,629
|
41,832,711
|
||||||||||||
|
||||||||||||||||
Other comprehensive income (loss)
|
||||||||||||||||
Foreign currency translation adjustment, net of nil income taxes
|
(616,961
|
)
|
1,346,532
|
(781,721
|
)
|
(12,842,203
|
)
|
|||||||||
|
||||||||||||||||
Comprehensive income
|
24,861,642
|
21,183,192
|
50,100,908
|
28,990,508
|
Six-Month Period Ended June 30,
|
||||||||
2015
|
2014
|
|||||||
US$
|
US$
|
|||||||
Cash flows from operating activities:
|
||||||||
Net cash provided by operating activities
|
71,660,883
|
61,291,114
|
||||||
Cash flows from investing activities:
|
||||||||
Proceeds from maturity of time deposits
|
237,499,197
|
259,984,756
|
||||||
Purchase of time deposits
|
(231,080,300
|
)
|
(362,130,254
|
)
|
||||
Purchase of land use rights
|
(6,904,447
|
)
|
-
|
|||||
Purchase of and deposits for property, plant and equipment
|
(119,535,975
|
)
|
(86,442,465
|
)
|
||||
Net cash used in investing activities
|
(120,021,525
|
)
|
(188,587,963
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds from bank borrowings
|
323,407,459
|
422,150,363
|
||||||
Repayments of bank borrowings
|
(238,181,426
|
)
|
(383,003,049
|
)
|
||||
Proceeds from issuance of the Notes
|
-
|
148,396,175
|
||||||
Payment of issuance costs of the Notes
|
-
|
(3,970,357
|
)
|
|||||
Proceeds from the exercise of Series A investor warrants
|
-
|
596,740
|
||||||
Release of restricted cash as collateral for bank borrowings
|
-
|
3,243,383
|
||||||
Placement of restricted cash as collateral for bank borrowings
|
(29,729,123
|
)
|
(20,595,485
|
)
|
||||
Net cash provided by financing activities
|
55,496,910
|
166,817,770
|
||||||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
109,400
|
(2,211,225
|
)
|
|||||
Net increase in cash and cash equivalents
|
7,245,668
|
37,309,696
|
||||||
Cash and cash equivalents at beginning of period
|
45,456,612
|
95,545,904
|
||||||
Cash and cash equivalents at end of period
|
52,702,280
|
132,855,600
|
||||||
Supplemental disclosure of cash flow information:
|
||||||||
Interest paid, net of capitalized interest
|
20,159,080
|
12,985,268
|
||||||
Income taxes paid
|
3,706,530
|
23,029,798
|
June 30, 2015
|
December 31, 2014
|
|||||||
US$
|
US$
|
|||||||
RMB denominated bank deposits with:
|
||||||||
Financial Institutions in the PRC
|
353,954,158
|
311,377,750
|
||||||
Financial Institutions in Hong Kong Special Administrative Region ("Hong Kong SAR")
|
4,212
|
2,617
|
||||||
Financial Institution in Dubai, United Arab Emirates ("UAE")
|
8,183
|
170
|
||||||
U.S. dollar denominated bank deposits with:
|
||||||||
Financial Institution in the U.S.
|
195,624
|
770,704
|
||||||
Financial Institutions in the PRC
|
17,142
|
17,139
|
||||||
Financial Institution in Hong Kong SAR
|
323,962
|
1,366,224
|
||||||
Financial Institution in Macau Special Administrative Region ("Macau SAR")
|
4,104,707
|
47,868
|
||||||
Financial Institution in Dubai, UAE
|
4,870,136
|
481,179
|
||||||
Euro denominated bank deposits with:
|
||||||||
Financial institution in Hong Kong SAR
|
-
|
83,017
|
||||||
Financial institution in Dubai, UAE
|
3,091
|
3,355
|
||||||
HK dollar denominated bank deposits with:
|
||||||||
Financial institution in Hong Kong SAR
|
394
|
581
|
||||||
Dirham denominated bank deposits with:
|
||||||||
Financial institution in Dubai, UAE
|
14,562
|
112,815
|
|
June 30, 2015
|
December 31, 2014
|
||||||
|
US$
|
US$
|
||||||
|
||||||||
Accounts receivable
|
211,912,835
|
204,108,050
|
||||||
Allowance for doubtful accounts
|
(109,767
|
)
|
(109,912
|
)
|
||||
Accounts receivable, net
|
211,803,068
|
203,998,138
|
|
June 30, 2015
|
December 31, 2014
|
||||||
|
US$
|
US$
|
||||||
|
||||||||
Raw materials
|
|
256,203,379
|
|
241,853,814
|
||||
Work in progress
|
226,881
|
207,181
|
||||||
Finished goods
|
30,642,154
|
7,736,249
|
||||||
Total inventories
|
287,072,414
|
249,797,244
|
June 30, 2015
|
December 31, 2014
|
|||||||
US$
|
US$
|
|||||||
Advances to suppliers
|
247,022
|
168,614
|
||||||
Value added taxes receivables
|
2,283,841
|
6,407,547
|
||||||
Interest receivable
|
3,438,119
|
3,351,672
|
||||||
Others
|
3,415,125
|
1,325,995
|
||||||
Total prepaid expenses and other current assets
|
9,384,107
|
11,253,828
|
|
June 30, 2015
|
December 31, 2014
|
||||||
|
US$
|
US$
|
||||||
|
||||||||
Machinery, equipment and furniture
|
263,516,693
|
209,509,700
|
||||||
Motor vehicles
|
1,984,993
|
1,854,985
|
||||||
Workshops and buildings
|
79,383,200
|
79,009,346
|
||||||
Construction in progress
|
48,887,660
|
93,970,716
|
||||||
Total property, plant and equipment
|
393,772,546
|
384,344,747
|
||||||
Less accumulated depreciation
|
(78,750,505
|
)
|
(66,020,147
|
)
|
||||
Property, plant and equipment, net
|
315,022,041
|
318,324,600
|
Three-Month Period Ended
June 30,
|
||||||||
2015
|
2014
|
|||||||
US$
|
US$
|
|||||||
Cost of revenues
|
5,525,990
|
4,638,160
|
||||||
General and administrative expenses
|
403,135
|
319,502
|
||||||
Research and development expenses
|
901,082
|
527,963
|
||||||
Selling expense
|
223
|
-
|
||||||
Total depreciation expense
|
6,830,430
|
5,485,625
|
|
Six-Month Period Ended
June 30,
|
|||||||
|
2015
|
2014
|
||||||
|
US$
|
US$
|
||||||
|
||||||||
Cost of revenues
|
10,305,578
|
9,508,815
|
||||||
General and administrative expenses
|
778,263
|
621,783
|
||||||
Research and development expenses
|
1,696,801
|
959,972
|
||||||
Selling expense
|
223
|
-
|
||||||
Total depreciation expense
|
12,780,865
|
11,090,570
|
(a) | Current |
|
June 30, 2015
|
December 31, 2014
|
||||||
|
US$
|
US$
|
||||||
|
||||||||
Unsecured loans
|
70,821,530
|
47,223,028
|
||||||
Secured loans by accounts receivable
|
-
|
40,292,686
|
||||||
Guaranteed loans by a third-party (ii)
|
27,362,863
|
-
|
||||||
Secured loans by restricted cash (iii)
|
35,600,000
|
-
|
||||||
Current portion of long-term bank loans (note b)
|
83,684,555
|
12,219,708
|
||||||
|
||||||||
Total short-term loans, including current portion of long-term bank loans
|
217,468,948
|
99,735,422
|
(i) | As of June 30, 2015 and December 31, 2014, the Company's short-term bank loans bear a weighted average interest rate of 4.03% and 5.7% per annum, respectively. All short-term bank loans mature at various times within one year and contain no renewal terms. |
(ii) | On February 11, 2015, the Company obtained RMB140 million (US$22.6 million) bank loan at an annual interest rate of 5.32%, from Bank of Communications, and RMB100 million (US$16.1 million) bank loan at an annual interest rate of 5.32%, from Bank of Construction banks in Nanchong City, Sichuan. These two loans were guaranteed by an investment company affiliated with the People's Government of Shunqing District, Nanchong City, Sichuan Province ("Shunqing Government") and were issued to support the Company's construction of a production plant in Nanchong City, Sichuan and will be paid off in five installments. The first installment in the amount of RMB70 million (US$11.3 million) was paid on April 30,2015. The last installment will become due and payable on November 30, 2015. |
(iii) |
On January 15, 2015, the Company obtained a 350-day secured loan of US$12.0 million from HSBC Bank Middle East Limited in Dubai, UAE at an annual interest rate of 3-month London Inter-Bank Offered Rate ("LIBOR") (0.2832% as of June 30, 2015) plus 1.8%. On February 2, 2015, the Company obtained another 351-day secured loan of US$16.6 million from HSBC Bank Middle East Limited in Dubai, UAE at an interest rate of 3-month LIBOR (0.2832% as of June 30, 2015) plus 1.8%. These loans were secured by restricted cash of RMB39.3 million (equivalent to US$6.3 million) by the HSBC bank in Harbin, China.
In June 2015, the Company obtained a one-year secured loan of US$7.0 million from Bank of China Luxemburg Branch at an annual interest rate of one-year LIBOR (0.7715% as of June 30, 2015) plus 0.75%. These loans were secured by restricted cash of RMB45.9 million (equivalent to US$7.4 million) by the Bank of China in Harbin, China.
|
(b) | Non-current |
|
June 30, 2015
|
December 31, 2014
|
||||||
|
US$
|
US$
|
||||||
|
||||||||
Secured loans
|
83,164,800
|
70,000,000
|
||||||
Unsecured loans
|
130,927,408
|
116,494,154
|
||||||
Less: current portion
|
83,684,555
|
12,219,708
|
||||||
Total long-term bank loans, excluding current portion
|
130,407,653
|
174,274,446
|
June 30, 2015
|
December 31, 2014
|
|||||||
US$
|
US$
|
|||||||
Payables for purchase of property, plant and equipment
|
7,182,356
|
7,234,607
|
||||||
Accrued freight expenses
|
3,211,971
|
1,688,431
|
||||||
Accrued interest expenses
|
9,784,921
|
9,031,741
|
||||||
Others
|
5,355,051
|
6,529,804
|
||||||
Total accrued expenses and other current liabilities
|
25,534,299
|
24,484,583
|
Three-Month Period Ended June 30,
|
Six-Month Period Ended June 30,
|
|||||||||||||||
2015
|
2014
|
2015
|
2014
|
|||||||||||||
US$
|
US$
|
US$
|
US$
|
|||||||||||||
Costs and expenses resulting from transactions with related parties:
|
||||||||||||||||
Rental expenses for plant and office spaces
|
165,500
|
|
195,677
|
360,714
|
395,588
|
|
June 30, 2015
|
|
December 31, 2014
|
|||||
US$
|
US$
|
|||||||
Amounts due from a related party:
|
||||||||
Prepaid rent expenses to Xinda High-Tech
|
-
|
220,262
|
||||||
Total:
|
-
|
220,262
|
Premise Leased
|
Area (M2)
|
|
Annual Rental Fee (US$)
|
|
Period of Lease
|
||||
Office building
|
|
|
23,894
|
|
|
|
766,851
|
|
Between January 1, 2014 and December 31, 2018
|
Premise Leased
|
|
Area (M
2
)
|
|
|
Annual Rental Fee (US$)
|
|
Period of Lease
|
||
Facility
|
|
|
3,134
|
|
|
|
16,047
|
|
Between January 1, 2015 and December 31, 2015
|
Facility
|
|
|
200
|
|
|
|
6,419
|
|
Between August 17, 2014 and August 16, 2015
|
|
Series B Preferred Stock
|
Common Stock
|
Additional
|
Accumulated
Other
|
Total
|
|||||||||||||||||||||||||||||||
|
Number
of Shares
|
Amount
|
Number
of Shares
|
Amount
|
Treasury Stock
|
Paid-in
Capital
|
Retained
Earnings
|
Comprehensive
Income
|
Stockholders'
Equity
|
|||||||||||||||||||||||||||
|
US$
|
US$
|
||||||||||||||||||||||||||||||||||
Balance as of January 1, 2015
|
1,000,000
|
100
|
49,151,796
|
4,916
|
(92,694
|
)
|
80,875,787
|
431,823,706
|
12,775,801
|
525,387,616
|
||||||||||||||||||||||||||
Net income
|
-
|
-
|
-
|
-
|
-
|
-
|
50,882,629
|
-
|
50,882,629
|
|||||||||||||||||||||||||||
Other comprehensive loss
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
(781,721
|
)
|
(781, 721
|
)
|
|||||||||||||||||||||||||
Stock based compensation
|
-
|
-
|
-
|
-
|
-
|
386,371
|
-
|
-
|
386,371
|
|||||||||||||||||||||||||||
Vesting of nonvested shares
|
-
|
-
|
9,488
|
1
|
-
|
(1
|
)
|
-
|
-
|
-
|
||||||||||||||||||||||||||
Balance as of June 30, 2015
|
1,000,000
|
100
|
49,161,284
|
4,917
|
(92,694
|
)
|
81,262,157
|
482,706,335
|
11,994,080
|
575,874,895
|
|
Number of Nonvested
Shares
|
Weighted Average
Grant date Fair Value
|
||||||
|
US$
|
|||||||
Outstanding as of December 31, 2014
|
647,288
|
5.00
|
||||||
Vested
|
(9,488
|
)
|
4.15
|
|||||
Forfeited
|
(47,830
|
)
|
4.63
|
|||||
Outstanding as of June 30, 2015
|
589,970
|
5.04
|
|
Three-Month Period Ended June 30,
|
Six-Month Period Ended June 30,
|
||||||||||||||
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
|
US$
|
US$
|
US$
|
US$
|
||||||||||||
Net income
|
25,478,603
|
19,836,660
|
50,882,629
|
41,832,711
|
||||||||||||
Less:
|
||||||||||||||||
Earnings allocated to participating Series D convertible preferred stock
|
(6,199,413
|
)
|
(4,869,197
|
)
|
(12,379,759
|
)
|
(10,284,553
|
)
|
||||||||
Earnings allocated to participating nonvested shares
|
(230,996
|
)
|
(119,614
|
)
|
(466,567
|
)
|
(352,376
|
)
|
||||||||
Net income for basic and diluted earnings per share
|
19,048,194
|
14,847,849
|
38,036,303
|
31,195,782
|
||||||||||||
|
||||||||||||||||
Denominator
|
||||||||||||||||
Denominator for basic and diluted earnings per share
|
49,161,284
|
48,789,480
|
49,159,344
|
48,532,252
|
||||||||||||
|
||||||||||||||||
Earnings per share:
|
||||||||||||||||
Basic and diluted
|
0.39
|
0.30
|
0.77
|
0.64
|
|
Three-Month Period Ended June 30,
|
Six-Month Period Ended June 30,
|
||||||||||||||
|
2015
|
2014
|
2015
|
2014
|
||||||||||||
|
||||||||||||||||
Shares issuable upon conversion of Series D convertible preferred stock
|
16,000,000
|
16,000,000
|
16,000,000
|
16,000,000
|
||||||||||||
Shares issuable upon exercise of Series A investor warrant
|
-
|
438,038
|
-
|
438,038
|
||||||||||||
Shares issuable upon exercise of Series A placement agent warrant
|
-
|
117,261
|
-
|
117,261
|
US$
|
||||
Period from July 1, 2015 to December 31, 2015
|
651,896
|
|||
Years ending December 31,
|
||||
2016
|
1,099,595
|
|||
2017
|
963,302
|
|||
2018
|
892,443
|
|||
2019
|
112,866
|
|||
2020 and thereafter
|
1,147,475
|
(in millions, except percentage)
|
Three-Month Period Ended
|
Six-Month Period Ended
|
||||||||||||||||||||||
|
June 30,
|
Change
|
June 30,
|
Change
|
||||||||||||||||||||
|
2015
|
2014
|
%
|
2015
|
2014
|
%
|
||||||||||||||||||
Revenues
|
265.4
|
264.2
|
0.5
|
%
|
487.3
|
487.8
|
(0.1
|
)%
|
||||||||||||||||
Cost of revenues
|
(213.9
|
)
|
(211.9
|
)
|
0.9
|
%
|
(387.2
|
)
|
(388.9
|
)
|
(0.4
|
)%
|
||||||||||||
Gross profit
|
51.5
|
52.3
|
(1.5
|
)%
|
100.1
|
98.9
|
1.2
|
%
|
||||||||||||||||
Total operating expenses
|
(13.7
|
)
|
(18.0
|
)
|
(23.9
|
)%
|
(24.8
|
)
|
(30.6
|
)
|
(19.0
|
)%
|
||||||||||||
Operating income
|
37.8
|
34.3
|
10.2
|
%
|
75.3
|
68.3
|
10.2
|
%
|
||||||||||||||||
Income before income taxes
|
29.9
|
24.7
|
21.1
|
%
|
59.4
|
53.8
|
10.4
|
%
|
||||||||||||||||
Income tax expense
|
(4.4
|
)
|
(4.9
|
)
|
(10.2
|
)%
|
(8.5
|
)
|
(12.0
|
)
|
(29.2
|
)%
|
||||||||||||
Net income
|
25.5
|
19.8
|
28.8
|
%
|
50.9
|
41.8
|
21.8
|
%
|
(in millions, except percentage)
|
Revenues
For the Three-Month Period Ended June 30,
|
|||||||||||||||||||||||
2015
|
2014
|
|||||||||||||||||||||||
Amount
|
%
|
Amount
|
%
|
Change in
Amount
|
Change in
%
|
|||||||||||||||||||
Modified Polyamide 66 (PA66)
|
53.0
|
20.0
|
%
|
53.3
|
20.2
|
%
|
(0.3
|
)
|
(0.6
|
)%
|
||||||||||||||
Modified Polyamide 6 (PA6)
|
52.1
|
19.6
|
%
|
62.6
|
23.7
|
%
|
(10.5
|
)
|
(16.8
|
)%
|
||||||||||||||
Plastic Alloy
|
99.0
|
37.3
|
%
|
78.7
|
29.8
|
%
|
20.3
|
25.8
|
%
|
|||||||||||||||
Modified Polypropylene (PP)
|
44.6
|
16.8
|
%
|
55.5
|
21.0
|
%
|
(10.9
|
)
|
(19.6
|
)%
|
||||||||||||||
Modified Acrylonitrile butadiene styrene (ABS)
|
10.8
|
4.1
|
%
|
9.6
|
3.6
|
%
|
1.2
|
12.5
|
%
|
|||||||||||||||
Polyoxymethylenes (POM)
|
0.9
|
0.3
|
%
|
0.9
|
0.3
|
%
|
0.0
|
0.0
|
%
|
|||||||||||||||
Polyphenylene Oxide (PPO)
|
3.3
|
1.3
|
%
|
3.1
|
1.2
|
%
|
0.2
|
6.5
|
%
|
|||||||||||||||
Raw Materials
|
1.7
|
0.6
|
%
|
0.5
|
0.2
|
%
|
1.2
|
240.0
|
%
|
|||||||||||||||
Total Revenues
|
265.4
|
100
|
%
|
264.2
|
100
|
%
|
1.2
|
0.5
|
%
|
(in MTs, except percentage)
|
Sales Volume
For the Three-Month Period Ended June 30,
|
|||||||||||||||||||||||
|
2015
|
2014
|
||||||||||||||||||||||
|
MT
|
%
|
MT
|
%
|
Change in
MT
|
Change in
%
|
||||||||||||||||||
Modified Polyamide 66 (PA66)
|
12,342
|
14.5
|
%
|
9,448
|
11.6
|
%
|
2,894
|
30.6
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Modified Polyamide 6 (PA6)
|
14,399
|
17.0
|
%
|
12,481
|
15.3
|
%
|
1,918
|
15.4
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Plastic Alloy
|
28,357
|
33.5
|
%
|
25,426
|
31.1
|
%
|
2,931
|
11.5
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Modified Polypropylene (PP)
|
23,542
|
27.8
|
%
|
29,500
|
36.2
|
%
|
(5,958
|
)
|
(20.2
|
)%
|
||||||||||||||
|
||||||||||||||||||||||||
Modified Acrylonitrile butadiene styrene (ABS)
|
4,185
|
4.9
|
%
|
3,727
|
4.6
|
%
|
458
|
12.3
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Polyoxymethylenes (POM)
|
270
|
0.3
|
%
|
271
|
0.3
|
%
|
(1
|
)
|
0.4
|
%
|
||||||||||||||
|
||||||||||||||||||||||||
Polyphenylene Oxide (PPO)
|
453
|
0.5
|
%
|
431
|
0.5
|
%
|
22
|
5.1
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Raw Materials
|
1,285
|
1.5
|
%
|
300
|
0.4
|
%
|
985
|
328.3
|
%
|
|||||||||||||||
Total Sales Volume
|
84,833
|
100
|
%
|
81,584
|
100
|
%
|
3,249
|
4.0
|
%
|
|
Three-Month Period Ended June 30,
|
|
Change
|
|
||||||||||
(in millions, except percentage)
|
2015
|
|
2014
|
|
Amount
|
%
|
|
|||||||
Gross Profit
|
|
$
|
51.5
|
|
|
$
|
52.3
|
|
|
$
|
(0.8
|
) |
(1.5
|
)%
|
Gross Profit Margin
|
|
|
19.4
|
%
|
|
|
19.8
|
%
|
|
|
|
(0.4
|
)%
|
|
Three-Month Period Ended June 30,
|
|
Change
|
|||||||||
(in millions, except percentage)
|
2015
|
|
2014
|
|
Amount
|
%
|
||||||
General and Administrative Expenses
|
$
|
6.6
|
|
$
|
4.5
|
|
$
|
2.1
|
46.7
|
% | ||
as a percentage of revenues
|
|
2.5
|
%
|
|
1.8
|
%
|
|
|
0.7
|
% |
|
Three-Month Period Ended June 30,
|
|
Change
|
|
|||||||||
(in millions, except percentage)
|
2015
|
|
2014
|
|
Amount
|
|
%
|
|
|||||
Research and Development Expenses
|
$
|
6.7
|
|
$
|
13.4
|
|
$
|
(6.7)
|
|
(50.0)
|
%
|
||
as a percentage of revenues
|
|
2.5
|
%
|
|
5.1
|
%
|
|
|
|
(2.6)
|
%
|
|
Three-Month Period Ended June 30,
|
Change
|
||||||||||||||
(in millions, except percentage)
|
2015
|
2014
|
Amount
|
%
|
||||||||||||
Interest Income
|
$
|
2.5
|
$
|
3.5
|
$
|
(1.0
|
)
|
(28.6
|
)%
|
|||||||
Interest Expenses
|
(11.0
|
)
|
(11.7
|
)
|
0.7
|
(6.0
|
)%
|
|||||||||
Net Interest Expenses
|
$
|
(8.5
|
)
|
$
|
(8.2
|
)
|
$
|
(0.3
|
)
|
3.7
|
%
|
|||||
as a percentage of revenues
|
(3.2
|
)%
|
(3.1
|
)%
|
(0.1
|
)%
|
|
Three–Month Period Ended June 30,
|
|
Change
|
|
|||||||||||||
(in millions, except percentage)
|
2015
|
|
2014
|
|
Amount
|
|
%
|
|
|||||||||
Gain (losses) on foreign currency forward contracts
|
|
$
|
0.3
|
|
$
|
(0.9
|
)
|
|
$
|
1.2
|
|
|
(133.3
|
)%
|
|||
as a percentage of revenues
|
|
|
0.1
|
%
|
|
|
(0.4
|
)
|
|
|
|
|
|
|
0.5
|
%
|
|
Three–Month Period Ended June 30,
|
|
Change
|
|
||||||||||
(in millions, except percentage)
|
2015
|
|
2014
|
|
Amount
|
|
%
|
|
||||||
Income before Income Taxes
|
$
|
|
29.9
|
|
$
|
|
24.7
|
|
$
|
|
5.2
|
|
21.1
|
%
|
Income Tax Expense
|
|
|
(4.4
|
)
|
|
|
(4.9
|
)
|
|
|
0.5
|
|
(10.2
|
)%
|
Effective income tax rate
|
|
|
14.7
|
%
|
|
|
19.8
|
%
|
|
|
|
|
(5.1
|
)%
|
(in millions, except percentage)
|
Revenues
For the Six -Month Period Ended June 30,
|
|||||||||||||||||||||||
2015
|
2014
|
|||||||||||||||||||||||
Amount
|
%
|
Amount
|
%
|
Change in
Amount
|
Change in
%
|
|||||||||||||||||||
Modified Polyamide 66 (PA66)
|
89.1
|
18.3
|
%
|
112.0
|
23.0
|
%
|
(22.9
|
)
|
(20.4
|
)%
|
||||||||||||||
Modified Polyamide 6 (PA6)
|
95.0
|
19.5
|
%
|
114.4
|
23.5
|
%
|
(19.4
|
)
|
(17.0
|
)%
|
||||||||||||||
Plastic Alloy
|
191.2
|
39.2
|
%
|
130.4
|
26.7
|
%
|
60.8
|
46.6
|
%
|
|||||||||||||||
Modified Polypropylene (PP)
|
84.1
|
17.3
|
%
|
104.8
|
21.5
|
%
|
(20.7
|
)
|
(19.8
|
)%
|
||||||||||||||
Modified Acrylonitrile butadiene styrene (ABS)
|
19.2
|
3.9
|
%
|
19.2
|
3.9
|
%
|
0.0
|
|
0.0
|
%
|
||||||||||||||
Polyoxymethylenes (POM)
|
1.4
|
0.3
|
%
|
2.1
|
0.4
|
%
|
(0.7
|
)
|
(33.3
|
)%
|
||||||||||||||
Polyphenylene Oxide (PPO)
|
6.2
|
1.3
|
%
|
4.2
|
0.9
|
%
|
2.0
|
47.6
|
%
|
|||||||||||||||
Raw Materials
|
1.1
|
0.2
|
%
|
0.7
|
0.1
|
%
|
0.4
|
57.1
|
%
|
|||||||||||||||
Total Revenues
|
487.3
|
100
|
%
|
487.8
|
100
|
%
|
(0.5
|
)
|
(0.1
|
)%
|
(in MTs, except percentage)
|
Sales Volume
For the Six-Month Period Ended June 30,
|
|||||||||||||||||||||||
|
2015
|
2014
|
||||||||||||||||||||||
|
MT
|
%
|
MT
|
%
|
Change in
MT
|
Change in
%
|
||||||||||||||||||
Modified Polyamide 66 (PA66)
|
20,789
|
13.5
|
%
|
19,719
|
13.1
|
%
|
1,070
|
5.4
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Modified Polyamide 6 (PA6)
|
26,380
|
17.1
|
%
|
22,669
|
15.1
|
%
|
3,711
|
16.4
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Plastic Alloy
|
52,500
|
34.0
|
%
|
45,733
|
30.4
|
%
|
6,767
|
14.8
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Modified Polypropylene (PP)
|
44,485
|
28.8
|
%
|
53,452
|
35.6
|
%
|
(8,967
|
)
|
(16.8
|
)%
|
||||||||||||||
|
||||||||||||||||||||||||
Modified Acrylonitrile butadiene styrene (ABS)
|
7,491
|
4.9
|
%
|
7,086
|
4.7
|
%
|
405
|
5.7
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Polyoxymethylenes (POM)
|
408
|
0.3
|
%
|
600
|
0.4
|
%
|
(192
|
)
|
(32.0
|
)%
|
||||||||||||||
|
||||||||||||||||||||||||
Polyphenylene Oxide (PPO)
|
849
|
0.6
|
%
|
570
|
0.4
|
%
|
279
|
48.9
|
%
|
|||||||||||||||
|
||||||||||||||||||||||||
Raw Materials
|
1,285
|
0.8
|
%
|
399
|
0.3
|
%
|
886
|
222.1
|
%
|
|||||||||||||||
Total Sales Volume
|
154,187
|
100
|
%
|
150,228
|
100
|
%
|
3,959
|
2.6
|
%
|
|
Six-Month Period Ended June 30,
|
|
Change
|
|
||||||||||||
(in millions, except percentage)
|
2015
|
|
2014
|
|
Amount
|
|
%
|
|
||||||||
Gross Profit
|
|
$
|
100.1
|
|
|
$
|
98.9
|
|
|
$
|
1.2
|
|
|
|
1.2
|
%
|
Gross Profit Margin
|
|
|
20.5
|
%
|
|
|
20.3
|
%
|
|
|
|
|
|
|
0.2
|
%
|
|
Six-Month Period Ended June 30,
|
|
Change
|
|
||||||||||||
(in millions, except percentage)
|
2015
|
|
2014
|
|
Amount
|
|
%
|
|
||||||||
General and Administrative Expenses
|
|
$
|
11.6
|
|
|
$
|
8.3
|
|
|
$
|
3.3
|
|
|
|
39.8
|
%
|
as a percentage of revenues
|
|
|
2.4
|
%
|
|
|
1.7
|
%
|
|
|
|
|
|
|
0.7
|
%
|
|
Six-Month Period Ended June 30,
|
|
Change
|
|
||||||||||||
(in millions, except percentage)
|
2015
|
|
2014
|
|
Amount
|
|
%
|
|
||||||||
Research and Development Expenses
|
|
$
|
12.5
|
|
|
$
|
22.0
|
|
|
$
|
(9.5
|
)
|
|
|
(43.2
|
)%
|
as a percentage of revenues
|
|
|
2.6
|
%
|
|
|
4.5
|
%
|
|
|
|
|
|
|
(1.9)
|
%
|
|
Six-Month Period Ended June 30,
|
Change
|
||||||||||||||
(in millions, except percentage)
|
2015
|
2014
|
Amount
|
%
|
||||||||||||
Interest Income
|
$
|
4.9
|
$
|
6.5
|
$
|
(1.6
|
)
|
(24.6
|
)%
|
|||||||
Interest Expenses
|
(21.7
|
)
|
(20.2
|
)
|
(1.5
|
)
|
7.4
|
%
|
||||||||
Net Interest Expenses
|
$
|
(16.8
|
)
|
$
|
(13.7
|
)
|
$
|
(3.1
|
)
|
22.6
|
%
|
|||||
as a percentage of revenues
|
(3.4
|
)%
|
(2.9
|
)%
|
(0.5
|
)%
|
|
Six Month Period Ended June 30,
|
|
Change
|
|
|||||||||
(in millions, except percentage)
|
2015
|
|
2014
|
|
Amount
|
%
|
|
||||||
Income before Income Taxes
|
$
|
|
59.4
|
|
|
$
|
53.8
|
|
$
|
5.6
|
10.4
|
%
|
|
Income Tax Expense
|
|
|
(8.5
|
)
|
|
|
(12.0
|
)
|
|
3.5
|
(29.2
|
)%
|
|
Effective income tax rate
|
|
|
14.3
|
%
|
|
|
22.3
|
%
|
|
(8.0
|
)%
|
June 30,
|
December 31,
|
Change
|
||||||||||||||
(
in millions, except percentage)
|
2015
|
2014
|
Amount
|
%
|
||||||||||||
Cash and cash equivalents
|
52.7
|
45.5
|
7.2
|
15.8
|
%
|
|||||||||||
Restricted cash
|
43.6
|
12.5
|
31.1
|
248.8
|
%
|
|||||||||||
Time deposits
|
231.8
|
238.5
|
(6.7
|
)
|
(2.8
|
)%
|
||||||||||
Accounts receivable, net of allowance for doubtful accounts
|
211.8
|
204.0
|
7.8
|
3.8
|
%
|
|||||||||||
Inventories
|
287.1
|
249.8
|
37.3
|
14.9
|
%
|
|||||||||||
Property, plant and equipment, net
|
315.0
|
318.3
|
(3.3
|
)
|
(1.0
|
)%
|
||||||||||
Land use rights, net
|
18.7
|
11.9
|
6.8
|
57.1
|
%
|
|||||||||||
Prepayments to equipment and construction suppliers
|
294.4
|
182.2
|
112.2
|
61.6
|
%
|
|||||||||||
Other non-current assets
|
40.9
|
25.5
|
15.4
|
60.4
|
%
|
|||||||||||
Total assets
|
1,505.4
|
1,299.7
|
205.7
|
15.8
|
%
|
|||||||||||
Short-term bank loans, including current portion of long-term bank loans
|
217.5
|
99.7
|
117.8
|
118.2
|
%
|
|||||||||||
Bills payable
|
50.6
|
43.4
|
7.2
|
16.6
|
%
|
|||||||||||
Accounts payable
|
191.0
|
152.1
|
38.9
|
25.6
|
%
|
|||||||||||
Income taxes payable, including noncurrent portion
|
23.3
|
17.3
|
6.0
|
34.7
|
%
|
|||||||||||
Accrued expenses and other current liabilities
|
25.5
|
24.5
|
1.0
|
4.1
|
%
|
|||||||||||
Long-term bank loans, excluding current portion
|
130.4
|
174.3
|
(43.9
|
)
|
(25.2
|
)%
|
||||||||||
Notes payable
|
148.8
|
148.6
|
0.2
|
0.1
|
%
|
|||||||||||
Deferred income
|
29.0
|
-
|
29.0
|
N/
|
A
|
|||||||||||
Redeemable Series D convertible preferred stock
|
97.6
|
97.6
|
-
|
N/
|
A
|
|||||||||||
Stockholders' equity
|
575.9
|
525.3
|
50.6
|
9.6
|
%
|
(in millions)
|
June 30, 2015
|
||||||||||||
|
Lines of Credit, Obtained
|
Remaining Available
|
|||||||||||
Names of Financial Institution
|
Date of Approval
|
RMB
|
USD
|
USD
|
|||||||||
Bank of Communications
|
December 09, 2014
|
103.0
|
16.6
|
0.2
|
|||||||||
Bank of Longjiang, Heilongjiang
|
June 29, 2015
|
250.0
|
40.2
|
40.2
|
|||||||||
Bank of China
|
April 28, 2015
|
1,161.4
|
186.9
|
96.6
|
|||||||||
HSBC
|
September 2, 2014
|
279.6
|
45.0
|
16.4
|
|||||||||
Agriculture Bank of China
|
June27, 2015
|
160.0
|
25.8
|
16.1
|
|||||||||
China Construction Bank
|
December 25, 2013
|
300.0
|
48.3
|
24.1
|
|||||||||
Societe Generale(China)Limited
|
August 1, 2014
|
150.0
|
24.1
|
3.2
|
|||||||||
Subtotal (credit term<=1year)
|
2,404.0
|
386.9
|
196.8
|
||||||||||
Bank of China
|
April 28, 2015
|
557.5
|
89.7
|
13.6
|
|||||||||
Bank of Communications
|
December 09, 2014
|
197.0
|
31.7
|
-
|
|||||||||
Bank of Longjiang, Heilongjiang
|
June 29, 2015
|
50.0
|
8.0
|
8.0
|
|||||||||
Agriculture Bank of China
|
June 27, 2015
|
140.0
|
22.5
|
-
|
|||||||||
Subtotal (credit term>1year)
|
944.5
|
151.9
|
21.6
|
||||||||||
Total
|
|
3,348.5
|
538.8
|
218.4
|
Six-Month Period Ended June 30,
|
||||||||
(in millions US$)
|
2015
|
2014
|
||||||
Net cash provided by operating activities
|
71.7
|
61.3
|
||||||
Net cash used in investing activities
|
(120.1
|
)
|
(188.6
|
)
|
||||
Net cash provided by financing activities
|
55.5
|
166.8
|
||||||
Effect of foreign currency exchange rate changes on cash and cash equivalents
|
0.1
|
(2.2
|
)
|
|||||
Net increase in cash and cash equivalents
|
7.2
|
37.3
|
||||||
Cash and cash equivalents at the beginning of period
|
45.5
|
95.5
|
||||||
Cash and cash equivalents at the end of period
|
52.7
|
132.8
|
|
Six-month period ended June 30, 2015
|
Year ended December 31, 2014
|
Customer Payment Term
|
Payment in advance/up to 90 days
|
Payment in advance/up to 90 days
|
Supplier Payment Term
|
Payment in advance/up to 60 days
|
Payment in advance/up to 60 days
|
Contractual obligations
|
Total
|
Payment due
less than 1 year
|
1 – 3 years
|
3-5 years
|
More than 5
years
|
|||||||||||||||
Lease commitments
|
4,867,577
|
1,201,694
|
1,959,322
|
615,521
|
1,091,040
|
|||||||||||||||
Purchase of land use rights, plant equipment, and construction in progress (3)(4)(5)
|
311,376,103
|
310,641,542
|
734,561
|
-
|
-
|
|||||||||||||||
Long-term bank loans (1)
|
224,439,536
|
90,775,764
|
133,663,772
|
-
|
-
|
|||||||||||||||
Notes payable (2)
|
220,500,000
|
17,625,000
|
35,250,000
|
167,625,000
|
-
|
|||||||||||||||
Total
|
761,183,216
|
420,244,000
|
171,607,655
|
168,240,521
|
1,091,040
|
Exhibit
No.
|
|
Document Description
|
|
|
|
10.1 |
English translation of the Equity Transfer and Merger Agreement entered into by Xinda (Heilongjiang) Investment Co., Ltd., Sichuan Xinda Group and Nanchong Xinda Composite Material Co., Ltd. on March 6, 2015.
|
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).
|
101
|
|
Interactive Data Files Pursuant to Rule 405 of Regulation S-T.
|
|
China XD Plastics Company Limited
|
|
|
|
|
Date: August 6, 2015
|
By:
|
/s/ Jie Han
|
|
Name: Jie Han
|
|
|
Title: Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
Date: August 6, 2015
|
By:
|
/s/ Taylor Zhang
|
|
Name: Taylor Zhang
|
|
|
Title: Chief Financial Officer
|
Exhibit
No.
|
|
Document Description
|
|
|
|
10.1 |
English translation of the Equity Transfer and Merger Agreement entered into by Xinda (Heilongjiang) Investment Co., Ltd., Sichuan Xinda Group and Nanchong Xinda Composite Material Co., Ltd. on March 6, 2015.
|
|
31.1
|
|
Certification of the Chief Executive Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of the Chief Financial Officer pursuant to Rule 13A-14(A)/15D-14(A) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002).
|
101
|
|
Interactive Data Files Pursuant to Rule 405 of Regulation S-T.
|
(1)
|
I have reviewed this Quarterly Report on Form 10-Q of China XD Plastics Company Limited, for the periond ended June 30, 2015.
|
(2)
|
Based on my knowledge, 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;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
(4)
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(5)
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Jie Han
|
|
|
Name:
|
Jie Han
|
|
Title:
|
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
(1)
|
I have reviewed this Quarterly Report on Form 10-Q of China XD Plastics Company Limited, for the periond ended June 30, 2015.
|
(2)
|
Based on my knowledge, 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;
|
(3)
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
(4)
|
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;
|
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
(5)
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's Board of Directors (or persons performing the equivalent functions):
|
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ Taylor Zhang
|
|
|
Name:
|
Taylor Zhang
|
|
Title:
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
|
|
|
(1) |
the Report fully complies, in all material respects, with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Jie Han
|
|
|
Name:
|
Jie Han
|
|
Title:
|
Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
(1) |
the Report fully complies, in all material respects, with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Taylor Zhang
|
|
|
Name:
|
Taylor Zhang
|
|
Title:
|
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
|
|
|