Delaware
|
13-3637458
|
State
or other jurisdiction of incorporation or organization
|
(I.R.S.
Employer Identification No.)
|
Title of each
class
|
Name of each exchange
on which registered
|
None
|
Large accelerated filer
o
|
Accelerated filer
x
|
Non-accelerated
filer
o
|
Smaller reporting company o |
Item 1.
|
|
|
4
|
|
Item 1A.
|
|
|
12
|
|
Item
1B
|
19
|
|||
Item 2.
|
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20
|
|
Item 3.
|
|
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25
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|
Item 4.
|
|
|
26
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|
PART
II
|
||||
Item 5.
|
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26
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Item 6.
|
|
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28
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|
Item 7.
|
|
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29
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Item 7A.
|
|
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38
|
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Item 8.
|
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39
|
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Item 9.
|
|
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71
|
|
Item 9A.
|
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71
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Item 9B.
|
|
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73
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PART
III
|
||||
Item 10.
|
|
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73
|
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Item 11.
|
|
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75
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|
Item 12.
|
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76
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Item 13.
|
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77
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Item 14.
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78
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PART
IV
|
||||
Item 15.
|
|
|
79
|
|
|
81
|
1.
|
natural
brine is pumped from underground through extraction wells by subaqueous
pumps;
|
|
2.
|
the
natural brine then passes through transmission pipelines to storage
reservoirs;
|
3.
|
the
natural brine is sent to the bromine refining plant where bromine is
extracted from the natural brine. In neutral or acidic water,
the bromine ion is easily oxidized by adding the oxidative of chlorine,
which generates the single bromine away from the
brine. Thereafter the extracted single bromine is blown out by
forced air, then absorbed by sulfur dioxide or soda by adding acid,
chlorine and sulfur.
|
|
4.
|
the
wastewater from this refining process is then transported by pipeline to
brine pans;
|
5.
|
the
evaporation of the wastewater produces crude
salt.
|
Product
name
|
Application
sector
|
Hydroxyl
guar gum
|
Oil
Exploration & Production
|
Demulsified
agent
|
Oil
Exploration & Production
|
Corrosion
inhibitor for acidizing
|
Oil
Exploration & Production
|
Bactericide
|
Oil
Exploration / Agricultural
|
Chelant
|
Paper
Making
|
Iron
ion stabilizer
|
Oil
Exploration & Production
|
Clay
stabilizing agent
|
Oil
Exploration & Production
|
Flocculants
agent
|
Paper
Making
|
Remaining
agent
|
Paper
Making
|
Expanding
agent with enhanced gentleness
|
Paper
Making
|
Net Sales by
Segment
|
||||||||||||||||
Twelve
Months Ended
December 31,
2008
|
Twelve
Months Ended
December 31,
2007
|
|||||||||||||||
Segment
|
% of
total
|
% of
total
|
||||||||||||||
Bromine
and Crude salt
|
$ | 63,664,156 | 73 | % | $ | 34,015,484 | 63 | % | ||||||||
Chemical
Products
|
$ | 23,824,178 | 27 | % | $ | 20,233,166 | 37 | % | ||||||||
Total
sales
|
$ | 87,488,334 | 100 | % | $ | 54,248,650 | 100 | % |
Percentage
Increase in Net Sales
from fiscal year 2006
to 2007
|
Percentage
Increase in Net Sales
from fiscal year 2007
to 2008
|
|||||||
Segment
|
||||||||
Bromine
and Crude salt
|
90.8 | % | 87 | % | ||||
Chemical
Products
|
45.4 | % | 18 | % |
SCHC
Product sold in metric
tons
|
Year ended
12/31/08
|
Year ended
12/31/07
|
Percentage
Change
|
|||||||||
Bromine
|
28,673
|
17,648
|
+62.47%
|
|||||||||
Crude
Salt
|
66,500
|
51,000
|
+30.39%
|
Income
from Operations by Segment
|
||||||||||||||||
Twelve
Months Ended
December 31,
2008
|
Twelve
Months Ended
December 31,
2007
|
|||||||||||||||
Segment
|
% of
total
|
% of
total
|
||||||||||||||
Bromine
and Crude salt
|
$ | 24,663,244 | 75 | % | $ | 14,181,054 | 66 | % | ||||||||
Chemical
Products
|
$ | 8,121,203 | 25 | % | $ | 7,164,833 | 34 | % | ||||||||
Income
from operations before corporate costs
|
$ | 32,784,447 | 100 | % | $ | 21,345,887 | 100 | % | ||||||||
Corporate
costs
|
$ | (2,063,050 | ) | $ | (1,320,959 | ) | ||||||||||
Income
from operations
|
$ | 30,721,397 | $ | 20,024,928 |
Bromine
|
||||||||||||||||||||
and
Crude
|
Chemical
|
Segment
|
Consolidated
|
|||||||||||||||||
Salt
|
Products
|
Total
|
Corporate
|
Total
|
||||||||||||||||
December
31, 2008
|
||||||||||||||||||||
Net
revenue
|
$ | 63,664,156 | $ | 23,824,178 | $ | 87,488,334 | $ | - | 87,488,334 | |||||||||||
Income
from operations
|
24,663,244 | 8,121,203 | 32,784,447 | (2,063,050 | ) | 30,721,397 | ||||||||||||||
Total
assets
|
67,868,644 | 20,899,118 | 88,767,762 | 591,704 | 89,359,466 | |||||||||||||||
Depreciation
and amortization
|
4,123,131 | 604,734 | 4,727,865 | - | 4,727,865 | |||||||||||||||
Capital
expenditures
|
10,529,284 | 6,835,909 | 17,365,195 | - | 17,365,195 | |||||||||||||||
December
31, 2007
|
||||||||||||||||||||
Net
revenue
|
$ | 34,015,484 | $ | 20,233,166 | $ | 54,248,650 | $ | - | $ | 54,248,650 | ||||||||||
Income
(loss) from operations
|
14,181,054 | 7,164,833 | 21,345,887 | (1,320,959 | ) | 20,024,928 | ||||||||||||||
Total
assets
|
36,614,939 | 9,516,930 | 46,131,869 | 197,963 | 46,329,831 | |||||||||||||||
Depreciation
and amortization
|
1,111,580 | 186,871 | 1,298,451 | - | 1,298,451 |
Number
|
Customer
|
Revenue
(000’s)
|
Percentage
of Segment’s Revenue (%)
|
|||||
1
|
Shandong
Morui Chemical Company Limited
|
$
|
8,912
|
14.50%
|
||||
2
|
Shouguang
City Rongyuan Chemical Company Limited
|
$
|
6,662
|
10.84%
|
||||
3
|
Shouguang
Fuhai Chemical Company Limited
|
$
|
5,853
|
9.53%
|
||||
TOTAL
|
$
|
21,427
|
34.87%
|
Number
|
Customer
|
Revenue
(000’s)
|
Percentage
of Segment’s Revenue (%)
|
||||||
1
|
Talimu
Oil Company -1st, 2nd, and 3rd exploiture dept.
Ltd.
(1)
|
$
|
8,554
|
35.92%
|
|||||
2
|
Sinopec
Shengli -field Ltd's Qinghe factory
|
$
|
4,160
|
17.47%
|
|||||
3
|
Wuhan
City Chenming Hanyang Papermaking Ltd
|
$
|
3,656
|
15.36%
|
|||||
TOTAL
|
$
|
16,371
|
68.75%
|
(1)
|
Represents
sales to three autonomous entities within a single corporate
group.
|
|
The
Company has announced its intent to acquire bromine properties that are
unlicensed and thus not legally permitted to produce
bromine. In 2007 and 2008 the Company acquired five such
properties and in January 2009 the Company acquired another such
property.
T
hese six acquisitions
expanded our annual production capacity to 34,000 metric tons of bromine
and 300,000 metric tons of crude salt. These properties were
purchased with a combination of cash and shares of our common stock, at
purchase prices totaling $46,032,463. The Company expects that it will
continue its acquisition program in 2009 and that these acquisitions will
be funded by a combination of cash on hand, and the issuance of debt or
equity securities, including securities issued to the
sellers.
|
|
To
expand its chemical production capacity, the Company intends to acquire
chemical product producers. These acquisitions will be funded
by a combination of cash on hand, and the issuance of debt or equity
securities
|
·
|
the
success of identifying and completing mergers and
acquisitions;
|
·
|
the
introduction of competitive products by different or
new competitors;
|
·
|
reduced
demand for any given product;
|
·
|
difficulty
in keeping current with changing
technologies;
|
·
|
increased
or uneven expenses, whether related to sales and marketing, product
development or administration;
|
·
|
deferral
of recognition of our revenue in accordance with applicable accounting
principles due to the time required to complete projects;
and
|
|
·
|
costs
related to possible acquisitions of technology or
businesses.
|
·
|
We
will be able to capitalize on economic
reforms;
|
·
|
The
Chinese government will continue its pursuit of economic reform
policies;
|
·
|
The
economic policies, even if pursued, will be
successful;
|
·
|
Economic
policies will not be significantly altered from time to time;
and
|
·
|
Business
operations in China will not become subject to the risk of
nationalization.
|
|
·
|
In
China, insurance coverage is a relatively new concept compared to that of
the United States and for certain aspects of a business
operation, insurance coverage is restricted or
expensive. Workers compensation for employees in the PRC may be
unavailable or, if available, insufficient to adequately cover such
employees.
|
·
|
The
environmental laws and regulations in the PRC set various standards
regulating certain aspects of health and environmental quality, including,
in some cases, the obligation to rehabilitate current and former
facilities and locations where operations are or were
conducted. Violation of those standards could result in a
temporary or permanent restriction by the PRC of our bromine
operations.
|
·
|
environmental
hazards; and
|
·
|
industrial
accidents, including personal
injury.
|
·
|
damage
to or destruction of properties or production
facilities;
|
·
|
personal
injury or death;
|
·
|
environmental
damage;
|
·
|
monetary
losses; and
|
·
|
legal
liability.
|
Property
|
Factory
No. 1 – Haoyuan General Factory
|
Area
|
4,135
hectares
|
Date
of Acquisition
|
February
5, 2007
|
Land
Use Rights Lease Term
|
Fifty
Years
|
Land
Use Rights Expiration Date
|
2054
|
Prior
fees paid for land use rights
|
RMB3.9
million
|
Annual
Rent
|
RMB3,000
|
Mining
Permit No.:
|
3707000730088
|
Date
of Permission:
|
January
2005, subject to annual renewal
|
Period
of Permission:
|
One
year
|
Property
|
Factory
No. 2 – Yuwenbo
|
Area
|
747
hectares
|
Date
of Acquisition
|
April
7, 2007
|
Land
Use Rights Lease Term
|
Fifty
Years
|
Land
Use Rights Expiration Date
|
2052
|
Prior
Fees Paid For Land Use Rights
|
RMB7.5
million
|
Annual
Rent
|
RMB20,000
|
Mining
Permit No.:
|
3707000730088
|
Date
of Permission:
|
January
2005, subject to annual renewal
|
Period
of Permission:
|
One
year
|
Property
|
Factory
No. 3 – Yangdonghua
|
Area
|
938
hectares
|
Date
of Acquisition
|
June
11, 2007
|
Land
Use Rights Lease Term
|
Fifty
Years
|
Land
Use Rights Expiration Date
|
2052
|
Prior
Fees Paid For Land Use Rights
|
RMB5
million
|
Annual
Rent
|
10,669
|
Mining
Permit No.:
|
3707000730088
|
Date
of Permission:
|
January
2005, subject to annual renewal
|
Period
of Permission:
|
One
year
|
Property
|
Factory
No. 4 – Wangjiancai
|
Area
|
876
hectares
|
Date
of Acquisition
|
October
25, 2007
|
Land
Use Rights Lease Term
|
Fifty
Years
|
Land
Use Rights Expiration Date
|
2054
|
Annual
Rent
|
19,000
|
Prior
Fees Paid For Land Use Rights
|
RMB8.3
million
|
Mining
Permit No.:
|
3707000730088
|
Date
of Permission:
|
January
2005, subject to annual renewal
|
Period
of Permission:
|
One
year
|
Property
|
Factory
No. 5 – Liuxingji
|
Area
|
935
hectares
|
Date
of Acquisition
|
October
26, 2007
|
Land
Use Rights Lease Term
|
Fifty
Years
|
Land
Use Rights Expiration Date
|
2055
|
Annual
Rent
|
RMB14,000
|
Prior
Fees Paid for Land Use Rights
|
RMB6.5
million
|
Mining
Permit No.:
|
3707000730088
|
Date
of Permission:
|
January
2005, subject to annual renewal
|
Period
of Permission:
|
One
year
|
Property
|
Factory
No. 6 – Yangxiaodong
|
Area
|
1,069
hectares
|
Date
of Acquisition
|
January
8, 2008
|
Land
Use Rights Lease Term
|
Fifty
Years
|
Land
Use Rights Expiration Date
|
2055
|
Prior
Fees Paid for Land Use Rights
|
RMB9.1
million
|
Annual
Rent
|
RMB17,000
|
Mining
Permit No.:
|
3707000730088
|
Date
of Permission:
|
January
2005, subject to annual renewal
|
Period
of Permission:
|
One
year
|
Facility |
Hectares
|
Approximate
non-reserve mineralized materials
(in
tons)
|
Annual
Production Capacity
(in
tons)
|
2007
Utilization
Ration
|
2008
Utilization
Ration
|
||||||||||||
Factory
No. 1
|
4,135
|
776,000
|
10,000
|
92.6
|
%
|
95%
|
|||||||||||
Factory
No. 2
|
747
|
230,000
|
4,700
|
(1)(2)
|
74.8
|
%
|
90%
|
||||||||||
Factory
No. 3
|
938
|
280,000
|
3,700
|
(1)(3)
|
68.7
|
%
|
87%
|
||||||||||
Factory
No. 4
|
876
|
225,000
|
3,900
|
(1)(4)
|
22.1
|
%
|
92%
|
||||||||||
Factory
No. 5
|
935
|
240,000
|
4,700
|
(1)(5)
|
20.5
|
%
|
94%
|
||||||||||
Factory
No. 6
|
1,069
|
210,000
|
4,700
|
(1)(6)
|
--
|
%
|
80%
|
Facility
|
2006
|
2007
|
2008
|
|||
Production
(in
tons)
|
Price
(RMB/ton)
|
Production
(in
tons)
|
Price
(RMB/ton)
|
Production
(in
tons)
|
Price
(RMB/ton)
|
|
Factory
No. 1
|
10,035
|
14,146
|
9,264
|
14,435
|
9,502.2
|
14,899
|
Factory
No. 2 (1)
|
–
|
–
|
3,520
|
14,172
|
4,235.1
|
14,819
|
Factory
No. 3 (2)
|
–
|
–
|
2,747
|
14,491
|
3,221.1
|
14,858
|
Factory
No. 4 (3)
|
–
|
–
|
816
|
14,506
|
3,579.3
|
14,822
|
Factory
No. 5 (4)
|
–
|
–
|
801
|
14,539
|
4,396.8
|
14,843
|
Factory
No. 6 (5)
|
–
|
–
|
–
|
–
|
3,738.0
|
14,891
|
Total
|
10,035
|
17,648
|
28,673
|
High
|
Low
|
|||||||
2009
|
||||||||
First
Quarter*
|
$
|
0.49
|
$
|
0.29
|
||||
2008
|
||||||||
First
Quarter
|
$
|
3.19
|
$
|
1.50
|
||||
Second
Quarter
|
$
|
2.45
|
$
|
1.07
|
||||
Third
Quarter
|
$
|
1.90
|
$
|
0.33
|
||||
Fourth
Quarter
|
$
|
0.40
|
$
|
0.15
|
||||
2007
|
||||||||
First Quarter
|
$
|
2.00
|
$
|
0.725
|
||||
Second
Quarter
|
$
|
2.975
|
$
|
0.925
|
||||
Third
Quarter
|
$
|
1.475
|
$
|
0.90
|
||||
Fourth
Quarter
|
$
|
3.00
|
$
|
1.45
|
Plan
category
|
Number
of securities to be issued upon exercise of outstanding options, warrants
and rights
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
Number
of securities remaining available for future issuance under equity
compensation plans (excluding securities reflected in column
(a))
|
|
(a)
|
(b)
|
(c)
|
Equity
compensation plans approved by security holders
|
200,000
|
$1.155
|
9,800,000
|
Equity
compensation plans not approved by security holders
|
0
|
n/a
|
0
|
Total
|
200,000
|
$1.155
|
9,800,000
|
Year
Ended December 31,
|
|||||||||||||||
2008
|
2007
|
2006
|
|||||||||||||
(in
thousands, except per share data)
|
|||||||||||||||
Statement
of Operations Data:
|
|||||||||||||||
Revenue
|
|
87,488 |
|
54,248 |
|
31,736 | |||||||||
Cost
of goods sold
|
(52,302 | ) | (32,108 | ) | (20,504 | ) | |||||||||
Gross
profit
|
|
35,186 |
|
22,140 |
|
11,232 | |||||||||
Operating
expenses:
|
|||||||||||||||
General
and administrative
|
|
(4,466 | ) |
|
(2,082 | ) |
|
(5,789 | ) | ||||||
Depreciation
and amortization
|
(143 | ) | (33 | ) |
-
|
||||||||||
Total
operating expenses
|
|
(4,609 | ) |
|
(2,115 | ) |
|
(5,789 | ) | ||||||
Income
from operations
|
30,577 | 20,025 | 5,443 | ||||||||||||
Interest
income (expense), net
|
|
34 |
|
(107 | ) |
|
6 | ||||||||
Other
income (expense), net
|
(4 | ) | 113 | 246 | |||||||||||
Income
before income taxes
|
|
30,607 |
|
20,031 |
|
5,695 | |||||||||
Income
tax
|
(8,212 | ) | (7,798 | ) | (1,884 | ) | |||||||||
Net
income
|
|
22,395 |
|
12,233 |
|
3,811 | |||||||||
Net
income per share
|
|||||||||||||||
Basic
|
|
0.22 |
|
0.13 |
|
0.04 | |||||||||
Diluted
|
0.22 | 0.13 | 0.04 | ||||||||||||
Weighted average number of shares outstanding |
|
|
|
|
|
||||||||||
Basic
|
99,668,842 | 96,688,504 | 86,410,880 | ||||||||||||
Diluted
|
|
99,668,842 |
|
96,688,504 |
|
86,410,880 |
Year
Ended December 31,
|
|||||||||||
2008
|
2007
|
2006
|
|||||||||
(in
thousands)
|
|||||||||||
Balance
Sheet Data:
|
|||||||||||
Cash,
cash equivalents and short-term investments
|
30,878 |
|
10,773 |
|
5,692 | ||||||
Working
capital
|
24,669 |
|
1,150 | 3,151 | |||||||
Total
assets
|
89,359 |
|
46,329 |
|
14,955 | ||||||
Total
debt (including current maturities)
|
36,890 | 19,861 | 6,722 | ||||||||
Stockholders'
equity
|
52,469 |
|
26,468 |
|
8,232 |
For
the year ended
|
||||||||||||
December 31,
2008
|
December 31,
2007
|
%Change
|
||||||||||
Net
Revenue
|
$ | 87,488,334 | $ | 54,248,650 |
61%
|
|||||||
Cost
of Net Revenue
|
$ | (52,302,085 | ) | $ | (32,108,180 | ) |
63%
|
|||||
Gross
Profit
|
$ | 35,186,249 | $ | 22,140,470 |
59%
|
|||||||
Research
and Development costs
|
$ | (514,780 | ) | $ | (268,168 | ) |
92%
|
|||||
General
and Administrative expenses
|
$ | (4,094,312 | ) | $ | (1,847,374 | ) |
114%
|
|||||
Income
from operations
|
$ | 30,577,157 | $ | 20,024,928 |
53%
|
|||||||
Other
Income (expenses), net
|
$ | 30,254 | $ | 6,717 |
350%
|
|||||||
Income
before taxes
|
$ | 30,607,411 | $ | 20,031,645 |
54%
|
|||||||
Income
Taxes
|
$ | 8,211,939 | $ | 7,798,682 |
5%
|
|||||||
Net
Income
|
$ | 22,395,472 | $ | 12,232,963 |
84%
|
|||||||
Basic
and Diluted Earnings Per Share
|
$ | 0.22 | $ | 0.13 |
Net
Revenue by Segment
|
||||||||||||||||
Year
Ended
|
Year
Ended
|
|||||||||||||||
December 31,
2008
|
December 31,
2007
|
|||||||||||||||
Segment
|
% of
total
|
% of
total
|
||||||||||||||
Bromine
and Crude salt
|
$ | 63,664,156 | 73 | % | $ | 34,015,484 | 63 | % | ||||||||
Chemical
Products
|
$ | 23,824,178 | 27 | % | $ | 20,233,166 | 37 | % | ||||||||
Total
sales
|
$ | 87,488,334 | 100 | % | $ | 54,248,650 | 100 | % |
Year
Ended December 31
|
|||||||
2008
vs. 2007
|
|||||||
Segment
|
% Increase (decrease)
of Net Sales
|
||||||
Bromine
and Crude salt
|
87%
|
||||||
Chemical
Products
|
18%
|
Shouguang
City Haoyuan Chemical Company Limited
|
Year Ended December
31,
|
|||
Product sold in metric
tons
|
2008
|
2007
|
%
Change
|
|
Bromine
|
28,673
|
17,648
|
62.47%
|
|
Crude
Salt
|
66,500
|
51,000
|
30.39%
|
Year
Ended December 31
|
||||||||||||||||
2008
|
%
of Net revenue
|
2007
|
%
of Net revenue
|
|||||||||||||
Cost
of net revenue
|
$ | 52,302,085 | 59.78 | % | $ | 32,108,180 | 59.19 | % | ||||||||
Gross Profit | $ | 35,186,249 | 40.22 | % | $ | 22,140,470 | 40.81 | % |
Income
from Operations by Segment
|
||||||||||||||||
Year
Ended
|
Year
Ended
|
|||||||||||||||
December 31,
2008
|
December 31,
2007
|
|||||||||||||||
Segments
|
% of
total
|
% of
total
|
||||||||||||||
Bromine
and Crude salt
|
$ | 24,663,244 |
75%
|
$ | 14,181,054 |
66%
|
||||||||||
Chemical
Products
|
$ | 8,121,203 |
25%
|
$ | 7,164,833 |
34%
|
||||||||||
Income
from operations before corporate costs
|
$ | 32,784,447 |
100%
|
$ | 21,345,887 |
100%
|
||||||||||
Corporate
costs
|
$ | (2,209,290 | ) | $ | (1,320,959 | ) | ||||||||||
Income
from operations
|
$ | 30,577,157 | $ | 20,024,928 |
For
the year ended
|
Percentage
|
||
December
31, 2007
|
December
31, 2006
|
Change
|
|
Net
Revenue
|
$54,248,650
|
$31,736,216
|
+70.9%
|
Cost
of Net Revenue
|
$32,108,180
|
$20,503,829
|
+56.6%
|
Gross
Profit
|
$22,140,470
|
$11,232,387
|
+97.1%
|
Research
and Development costs
|
$268,168
|
-
|
-
|
General
and Administrative expenses
|
$1,847,374
|
$5,789,166
|
-68.1%
|
Income
from operations
|
$20,024,928
|
$5,443,221
|
+267.9%
|
Other
Income (expenses), net
|
$6,717
|
$252,483
|
-97.3%
|
Income
before taxes
|
$20,031,645
|
$5,695,704
|
+251.7%
|
Income
Taxes
|
$7,798,682
|
$1,884,244
|
+313.9%
|
Net
Income
|
$12,232,963
|
$3,811,460
|
+221.0%
|
Basic
and Diluted Earnings Per Share
|
$
0.13
|
$
0.04
|
Net
Revenue by Segment
|
||||||||||||||||
Year
Ended
|
Year
Ended
|
|||||||||||||||
December 31,
2007
|
December 31,
2006
|
|||||||||||||||
Segment
|
Percent
of total
|
Percent
of total
|
||||||||||||||
Bromine
and Crude salt
|
$ | 34,015,484 | 63 | % | $ | 17,825,097 | 56 | % | ||||||||
Chemical
Products
|
$ | 20,233,166 | 37 | % | $ | 13,911,119 | 44 | % | ||||||||
Total
sales
|
$ | 54,248,650 | 100 | % | $ | 31,736,216 | 100 | % |
Year
Ended December 31
|
|
2007
vs. 2006
|
|
Segment
|
% Increase of Net
Sales
|
Bromine
and Crude salt
|
90.8%
|
Chemical
Products
|
45.4%
|
Shouguang
City Haoyuan Chemical Company Limited
|
Year Ended December
31
|
||
Product sold in metric
tons
|
2007
|
2006
|
%
Change
|
Bromine
|
17,648
|
10,035
|
+75.
9%
|
Crude
Salt
|
51,000
|
No
Production
|
Income
from Operations by Segment
|
||||||||||||||||
Year
Ended
|
Year
Ended
|
|||||||||||||||
December 31,
2007
|
December 31,
2006
|
|||||||||||||||
Segments
|
% of
total
|
% of
total
|
||||||||||||||
Bromine
and Crude salt
|
$ | 14,181,054 | 66 | % | $ | 1,728,746 | 32 | % | ||||||||
Chemical
Products
|
$ | 7,164,833 | 34 | % | $ | 3,714,475 | 68 | % | ||||||||
Income
from operations before corporate costs
|
$ | 21,345,887 | 100 | % | $ | 5,443,221 | 100 | % | ||||||||
Corporate
costs
|
$ | (1,320,959 | ) | $ | - | |||||||||||
Income
from operations
|
$ | 20,024,928 | $ | 5,443,221 |
Three
Months Ended
|
||||||||||||||||||||
In
thousand, except per share amount
|
March
31
|
June
30
|
September
30
|
December
31
|
Total
|
|||||||||||||||
|
||||||||||||||||||||
Fiscal
Year 2008
|
||||||||||||||||||||
Operating
revenue
|
$ | 22,034 | $ | 23,766 | $ | 17,555 | $ | 24,133 | $ | 87,488 | ||||||||||
Operating
income
|
8,447
|
8,559 | 5,083 | 8,488 | 30,577 | |||||||||||||||
Net
income (loss)
|
6,147
|
6,286 | 3,737 | 6,225 | 22,395 | |||||||||||||||
Basic
earnings (loss) per share
|
$ | 0.06 | $ | 0.06 | $ | 0.04 | $ | 0.06 | $ | 0.22 | ||||||||||
Diluted
earnings (loss) per share
|
$ | 0.06 | $ | 0.06 | $ | 0.04 | $ | 0.06 | $ | 0.22 | ||||||||||
Operating
income as a percentage of operating revenues
|
38.34% | 36.01% | 28.95% | 35.17% | 34.95% | |||||||||||||||
Fiscal
Year 2007
|
||||||||||||||||||||
Operating
revenue
|
$ | 9,934 | $ | 12,260 | $ | 16,276 | $ | 15,310 | $ | 53,780 | ||||||||||
Operating
income
|
3,856 | 4,772 | 6,186 | 5,211 | 20,025 | |||||||||||||||
Net
income (loss)
|
2,557 | 3,101 | 3,946 | 2,629 | 12,233 | |||||||||||||||
Basic
earnings (loss) per share
|
$ | 0.03 | $ | 0.03 | $ | 0.04 | $ | 0.03 | $ | 0.13 | ||||||||||
Diluted
earnings (loss) per share
|
$ | 0.03 | $ | 0.03 | $ | 0.04 | $ | 0.03 | $ | 0.13 | ||||||||||
Operating
income as a percentage of operating revenues
|
38.82% | 38.92% | 38.01% | 34.04% | 37.24% | |||||||||||||||
Fiscal
Year 2006
|
||||||||||||||||||||
Operating
revenue
|
$ | 7,458 | $ | 7,861 | $ | 9,054 | 7,363 | $ | 31,736 | |||||||||||
Operating
income
|
2,574 | 2,702 | 2,906 | -2,739 | 5,443 | |||||||||||||||
Net
income (loss)
|
1,670 | 1,813 | 1,932 | -1,604 | 3,811 | |||||||||||||||
Basic
earnings (loss) per share
|
$ | 0.02 | $ | 0.02 | $ | 0.02 | (.04 |
)
|
$ | 0.04 | ||||||||||
Diluted
earnings (loss) per share
|
$ | 0.02 | $ | 0.02 | $ | 0.02 | $ | (.04 |
)
|
$ | 0.04 | |||||||||
Operating
income as a percentage of operating revenues
|
34.51%
|
34.37% | 32.10% | -37.20% | 17.15% |
Cash
Flow
|
||||||||
Year
Ended December 31
|
||||||||
2008
|
2007
|
|||||||
Net
cash provided by operating activities
|
$ | 24,896,306 | $ | 15,968,028 | ||||
Net
cash used in investing activities
|
$ | (17,365,195 | ) | $ | (22,679,319 | ) | ||
Net
cash provided by (used in) financing activities
|
$ | 11,272,480 | $ | 11,336,324 | ||||
Effects
of exchange rate changes on Cash
|
$ | 1,300,578 | $ | 456,234 | ||||
Net
cash inflow
|
$ | 20,104,169 | $ | 5,081,267 |
Contractual
obligations
|
Payments due by period | |||||||||||||||||||
Total
|
Less
than 1 year
|
1-3
years
|
3-5
years
|
More
than 5 years
|
||||||||||||||||
Long-Term
Debt Obligations
|
$ | 22,987,493 | $ | 4,650,000 | $ | 18,337,493 | - | - | ||||||||||||
Capital
Lease Obligations
|
- | - | - | - | ||||||||||||||||
Operating
Lease Obligations
|
- | - | - | - | - | |||||||||||||||
Purchase
Obligations
|
- | - | - | - | - | |||||||||||||||
Other
Long-Term Liabilities Reflected on the Registrant's Balance Sheet under
GAAP
|
- | - | - | - | - | |||||||||||||||
Total
|
$ | 22,987,493 | $ | 4,650,000 | $ | 18,337,493 | - | - |
PAGE
|
||||||
REPORTS OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
|
F-2
– F-4
|
|||||
CONSOLIDATED BALANCE
SHEETS
|
F-5
|
|||||
CONSOLIDATED STATEMENTS OF
OPERATIONS
|
F-6
|
|||||
CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME
|
F-7
|
|||||
CONSOLIDATED STATEMENT OF
STOCKHOLDERS' EQUITY
|
F-8
|
|||||
CONSOLIDATED STATEMENTS OF CASH
FLOWS
|
F- 9
– F-10
|
|||||
NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS
|
F- 11
– F-30
|
|
1.
|
Insufficient
complement of accounting personnel with the appropriate level of
accounting knowledge, experience and training in the application of
accounting principles generally accepted in the United States commensurate
with financial statement reporting
requirements.
|
|
2.
|
Inability
to timely and properly recognize issuance of share-based
compensation.
|
GULF
RESOURCES , INC.
|
||||||||
AND
SUBSIDIARIES
|
||||||||
CONSOLIDATED
BALANCE SHEET
|
||||||||
Years
ended December,
|
||||||||
2008
|
2007
|
|||||||
CURRENT
ASSETS
|
||||||||
Cash
|
$ | 30,878,044 | $ | 10,773,875 | ||||
Accounts
receivable
|
11,674,645 | 3,945,000 | ||||||
Inventories
|
418,259 | 413,391 | ||||||
Prepaid
expenses
|
- | 145,484 | ||||||
Prepayment
and deposit
|
229,408 | 236,269 | ||||||
Prepaid
land lease
|
15,849 | 13,521 | ||||||
Deferred
tax asset
|
3,453 | - | ||||||
Other
receivable
|
2,641 |
-
|
||||||
Total
Current Assets
|
43,222,299 | 15,527,540 | ||||||
Property,
Plant and Equipment, Net
|
45,399,456 | 30,105,185 | ||||||
Prepaid
land lease, Net of current portion
|
737,711 | 697,107 | ||||||
Total
Assets
|
$ | 89,359,466 | $ | 46,329,832 | ||||
Liabilities
and stockholders’ Equity
|
|
|
||||||
Current
Liabilities
|
||||||||
Bank
Loan
|
- | 3,770,250 | ||||||
Accounts
payable and accrued expenses
|
$ | 4,746,994 | $ | 2,928,248 | ||||
Loan
payable
|
4,034,250 | - | ||||||
Note
and loan payable – related parties
|
4,650,000 | 6,169,500 | ||||||
Due
to related party
|
852,067 | 32,230 | ||||||
Taxes
payable
|
4,269,442 | 1,477,296 | ||||||
Total
Current Liabilities
|
18,552,753 | 14,377,524 | ||||||
Non
Current Liabilities
|
||||||||
Note
payable, net of current portion
|
18,337,493 | 5,484,000 | ||||||
Total
Liabilities
|
36,890,246 | 19,861,524 | ||||||
|
|
|
||||||
Stockholders’
Equity
|
||||||||
PREFERED
STOCK ; $0.001 par value; 1,000,000 shares
|
||||||||
authorized
none outstanding
|
- | - | ||||||
COMMON
STOCK; $0.0005 par value; 400,000,000 shares
|
||||||||
authorized;
99,668,842 shares issued and outstanding
|
49,834 | 49,834 | ||||||
Additional
Paid in Capital
|
13,035,293 | 11,924,616 | ||||||
Retained
Earnings Unappropriated
|
31,817,465 | 11,323,518 | ||||||
Retained
Earnings Appropriated
|
3,223,418 | 1,321,893 | ||||||
Cumulative
Translation Adjustment
|
4,343,210 | 1,848,447 | ||||||
Total
Stockholders’ Equity
|
52,469,220 | 26,468,308 | ||||||
|
|
|
||||||
Total
Liabilities and stockholders’ Equity
|
$ | 89,359,466 | $ | 46,329,832 |
GULF
RESOURCES , INC.
|
|||||||||||
AND
SUBSIDIARIES
|
|||||||||||
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|||||||||||
Years
Ended December 31,
|
|||||||||||
2008
|
2007
|
2006
|
|||||||||
REVENUE
|
|||||||||||
Net
sales
|
$ | 87,488,334 | $ | 53,780,313 | 31,736,216 | ||||||
Maintenance
service income
|
- | 468,337 |
-
|
||||||||
|
87,488,334 | 54,248,650 | 31,736,216 | ||||||||
OPERATING
EXPENSES
|
|||||||||||
Cost
of net revenue
|
(52,302,085 | ) | (32,108,180 | ) | (20,503,829 | ) | |||||
Consulting
fees
|
- | - | (5,344,395 | ) | |||||||
Research
and development cost
|
(514,780 | ) | (268,168 | ) |
-
|
||||||
General
and administrative expenses
|
(4,094,312 | ) | (1,847,374 | ) | (444,771 | ) | |||||
|
(56,911,177 | ) | (34,223,722 | ) | (26,292,995 | ) | |||||
INCOME
FROM OPERATIONS
|
30,577,157 | 20,024,928 | 5,443,221 | ||||||||
OTHER
INCOME (EXPENSES)
|
|
|
|
||||||||
Interest
expense
|
(60,111 | ) | (161,577 | ) | - | ||||||
Rental
income
|
-
|
15,801 |
-
|
||||||||
Sundry
income
|
(3,764 | ) | 97,524 | 246,493 | |||||||
Interest
income
|
94,129 | 54,969 | 5,990 | ||||||||
30,254 | 6,717 | 252,483 | |||||||||
INCOME
BEFORE INCOME TAXES
|
30,607,411 | 20,031,645 | 5,695,704 | ||||||||
INCOME
TAXES
|
(8,211,939 | ) | (7,798,682 | ) | (1,884,244 | ) | |||||
NET
INCOME
|
$ | 22,395,472 | $ | 12,232,963 | 3,811,460 | ||||||
EARNINGS
PER SHARE
|
|
|
|
||||||||
BASIC
|
$ | 0.22 | $ | 0.13 | $ | 0.04 | |||||
DILUTED
|
$ | 0.22 | $ | 0.13 | $ | 0.04 | |||||
WEIGHTED
AVERAGE NUMBER OF SHARES
|
|
|
|
||||||||
BASIC
|
99,668,842 | 96,688,504 | 86,410,880 | ||||||||
DILUTED
|
99,668,842 | 96,688,504 | 86,410,880 |
GULF
RESOURCES, INC.
|
||||||||||||
AND
SUBSIDIARIES
|
||||||||||||
CONSOLIDATED
STATEMENTS OF COMPREHENSIVE INCOME
|
||||||||||||
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
NET
INCOME
|
$ | 22,395,472 | $ | 12,232,963 | $ | 3,811,460 | ||||||
|
|
|
||||||||||
OTHER
COMPREHENSIVE INCOME
|
|
|
|
|||||||||
Foreign
currency translation adjustment
|
2,494,763 | 1,480,056 | 227,906 | |||||||||
|
|
|
||||||||||
COMPREHENSIVE
INCOME
|
$ | 24,890,235 | $ | 13,713,019 | $ | 4,039,366 |
GULF
RESOURCES, INC.
|
||||||||||||||||||||||||||||||||
AND
SUBSIDIARIES
|
||||||||||||||||||||||||||||||||
CONSOLIDATED
STATEMENT OF STOCKHOLDERS’ EQUITY
|
||||||||||||||||||||||||||||||||
YEARS
ENDED DECEMBER 31, 2008, 2007 AND 2006
|
||||||||||||||||||||||||||||||||
Statutory
|
Statutory
|
|||||||||||||||||||||||||||||||
Additional
|
Common
|
Public
|
Cumulative
|
|||||||||||||||||||||||||||||
Number
|
Common
|
Paid-in
|
Reserve
|
Welfare
|
Retained
|
Translation
|
||||||||||||||||||||||||||
of
Shares
|
Stock
|
Capital
|
Fund
|
Fund
|
Earnings
|
Adjustment
|
Total
|
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
BALANCE
AT
DECEMBER 31, 2005 |
85,376,236 | $ | 42,688 | $ | 1,733,304 | $ | 696,719 | $ | 348,359 | $ | 5,918,390 | $ | 140,485 | $ | 8,879,945 | |||||||||||||||||
Issue
of share capital at merger
|
1,034,644 | 517 | (517 | ) | - | - | - | - | - | |||||||||||||||||||||||
Capital
Contribution
|
- | - | 936,030 | - | - | - | - | 936,030 | ||||||||||||||||||||||||
Net
income for year
|
- | - | - | - | - | 3,811,460 | - | 3,811,460 | ||||||||||||||||||||||||
Dividend
distribution
|
- | - | - | - | - | (5,622,880 | ) | - | (5,622,880 | ) | ||||||||||||||||||||||
Transfer
to reserve funds
|
- | - | - | 381,145 | 190,573 | (571,718 | ) | - | - | |||||||||||||||||||||||
Cumulative
translation adjustment
|
- | - | - | - | - | - | 227,906 | 227,906 | ||||||||||||||||||||||||
BALANCE
AT
DECEMBER 31, 2006 |
86,410,880 | $ | 43,205 | $ | 2,668,817 | $ | 1,077,864 | $ | 538,932 | $ | 3,535,252 | $ | 368,391 | $ | 8,232,461 | |||||||||||||||||
Common
stock issues as payment for accrued expenses
|
9,979,800 | 4,990 | 5,339,405 | - | - | - | - | 5,344,395 | ||||||||||||||||||||||||
Common
stock issuance for prepaid expenses
|
900,000 | 450 | 892,050 | - | - | - | - | 892,500 | ||||||||||||||||||||||||
Common
stock issuance for acquiring assets
|
1,558,572 | 779 | 1,986,400 | - | - | - | - | 1,987,179 | ||||||||||||||||||||||||
Common
stock issuance for acquiring assets
|
819,590 | 410 | 940,890 | - | - | - | - | 941,300 | ||||||||||||||||||||||||
Issuance
of stock options
|
- | - | 97,054 | - | - | - | - | 97,054 | ||||||||||||||||||||||||
Transfer
from Statutory Public Welfare Fund
|
- | - | - | 538,932 | (538,932 | ) | - | - | - | |||||||||||||||||||||||
Transfer
from Statutory Common Reserve Fund
|
- | - | - | (294,903 | ) | - | 294,903 | - | - | |||||||||||||||||||||||
Cumulative
translation adjustment
|
- | - | - | - | - | - | 1,480,056 | 1,480,056 | ||||||||||||||||||||||||
Dividend
distribution
|
- | - | - | - | - | (4,739,600 | ) | - | (4,739,600 | ) | ||||||||||||||||||||||
Net
income for year ended December 31, 2007
|
- | - | - | - | - | 12,232,963 | - | 12,232,963 | ||||||||||||||||||||||||
BALANCE
AT
DECEMBER 31, 2007 |
99,668,842 | $ | 49,834 | $ | 11,924,616 | $ | 1,321,893 | $ | - | $ | 11,323,518 | $ | 1,848,447 | $ | 26,468,308 | |||||||||||||||||
Cumulative
translation
adjustment
|
- | - | - | - | - | - | 2,494,763 | 2,494,763 | ||||||||||||||||||||||||
Waiver
of accrued interest
|
- | - | 131,533 | - | - | - | - | 131,533 | ||||||||||||||||||||||||
Issuance
of stock options
|
- | - | 28,500 | - | - | - | - | 28,500 | ||||||||||||||||||||||||
Issuances
of warrants for consulting expenses
|
- | - | 950,644 | - | - | - | - | 950,644 | ||||||||||||||||||||||||
Transfer
to Statutory Common Reserve Fund
|
- | - | - | 1,901,525 | - | (1,901,525 | ) | - | - | |||||||||||||||||||||||
Net
income for year ended December 31,2008
|
- | - | - | - | - | 22,395,472 | - | 22,395,472 | ||||||||||||||||||||||||
BALANCE
AT
DECEMBER 31,2008 |
99,668,842 | $ | 49,834 | $ | 13,025,293 | $ | 3,223,418 | $ | - | $ | 31,817,465 | $ | 4,343,210 | $ | 52,469,220 |
GULF
RESOURCES, INC.
|
||||||||||||
AND
SUBSIDIARIES
|
||||||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
||||||||||||
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|||||||||
Net
income
|
$ | 22,395,472 | $ | 12,232,963 | $ | 3,811,460 | ||||||
Adjustments
to reconcile net income
|
|
|
|
|||||||||
Net
cash provided by operating activities
Amortization
of warrants and options
|
979,144 | - | - | |||||||||
|
|
|
||||||||||
Amortization
of prepaid expenses
|
145,484 | 747,016 | - | |||||||||
Depreciation
and amortization
|
4,727,865 | 1,298,451 | 283,454 | |||||||||
Stock-based
compensation expense
|
- | 97,054 | - | |||||||||
(Increase)
decrease in assets
|
-
|
-
|
-
|
|||||||||
Accounts
receivable
|
(7,203,377 | ) | (2,347,199 | ) | (915,152 | ) | ||||||
Inventories
|
49,955 | 86,336 | 440,239 | |||||||||
Prepaid
expense
|
- | - | (558,787 | ) | ||||||||
Prepayment
and deposit
|
(588,542 | ) | (226,911 | ) | 29,822 | |||||||
Deferred
tax
|
(3,448 | ) | - | |||||||||
Income
tax receivable
|
- | - | (1,088,359 | ) | ||||||||
Increase
(decrease) in liabilities
|
-
|
-
|
|
|||||||||
Accounts
payable and accrued expenses
|
1,788,969 | 2,014,738 | 5,662,627 | |||||||||
Taxes
payable
|
2,604,784 | 2,065,580 | (1,248,108 | ) | ||||||||
Net
cash provided by operating activities
|
24,896,306 | 15,968,028 | 6,417,196 | |||||||||
CASH
FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|||||||||
Property,
plant and equipment
|
(17,365,195 | ) | (22,679,319 | ) | (1,573,003 | ) | ||||||
|
|
|
||||||||||
Net
cash used in investing activities
|
(17,365,195 | ) | (22,679,319 | ) | (1,573,003 | ) | ||||||
|
|
|
||||||||||
CASH
FLOWS FROM FINANCING ACTIVITIES
|
||||||||||||
Advances
to director
|
- | - | (121,829 | ) | ||||||||
Capital
contribution
|
-
|
50,000 | 936,523 | |||||||||
Proceeds
from bank loan
|
- | 3,620,925 | - | |||||||||
Proceeds
from loan payable
|
4,023,250 | - | - | |||||||||
Advances
from/(to) related party
|
852,105 | 1,213,049 | (18,835 | ) | ||||||||
Proceeds
from issuance of notes and loan payable - related parties
|
10,240,800 | 11,191,950 | - | |||||||||
Repayment
on bank loan
|
(3,843,675 | ) | - | |||||||||
Dividends
paid
|
-
|
(4,739,600 | ) | (5,675,764 | ) | |||||||
Net
cash provided by (used in) financing activities
|
11,272,480 | 11,336,324 | (4,879,905 | ) | ||||||||
EFFECTS
OF EXCHANGE RATE CHANGE ON CASH
|
1,300,578 | 456,234 | 185,931 | |||||||||
NET
INCREASE IN CASH & CASH EQUIVALENT
|
20,104,169 | 5,081,267 | 150,219 | |||||||||
CASH
& CASH EQUIVALENT - BEGINNING OF YEAR
|
10,773,875 | 5,692,608 | 5,542,389 | |||||||||
CASH
& CASH EQUIVALENT - END OF YEAR
|
$ | 30,878,044 | $ | 10,773,875 | $ | 5,692,608 |
GULF
RESOURCES, INC.
|
||||||||||||
AND
SUBSIDIARIES
|
||||||||||||
CONSOLIDATED
STATEMENTS OF CASH FLOWS (CONTINUED)
|
||||||||||||
Years
Ended December 31,
|
||||||||||||
2008
|
2007
|
2006
|
||||||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
|
|
|
|||||||||
Cash
Paid during the period for:
|
|
|
|
|||||||||
Income
taxes
|
$ | 6,813,943 | $ | 6,123,070 | $ | 4,637,792 | ||||||
Interest
paid
|
59,976
|
-
|
-
|
|||||||||
SUPPLEMENTAL
DISCLOSURE OF NON-CASH FINANCING ACTIVITIES
|
|
|
|
|||||||||
Waiver of accrued interest
|
$
|
131,533
|
$
|
-
|
$
|
-
|
||||||
Issuance
of common stock as payment for accrued expenses
|
$
|
-
|
$ | 5,344,395 | $ | - | ||||||
|
|
|
||||||||||
Issuance
of common stock for prepaid expenses
|
$
|
-
|
$
|
892,500 | $ | - | ||||||
|
|
|
||||||||||
Issuance
of common stock for acquiring assets
|
$
|
-
|
$
|
2,928,479 | $ | - | ||||||
|
|
|
NOTE
1 –
NATURE
OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
Useful
life
(in
years)
|
|
Mineral
rights
|
Lower
of the period of lease or 50 years
|
Buildings
|
20
|
Machinery
|
8
|
Motor
vehicles
|
5
|
Equipment
|
8
|
NOTE
1 –
NATURE
OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
NOTE
1 –
NATURE
OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
NOTE
1 –
NATURE
OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
NOTE
1 –
NATURE
OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
|
Years
ended December 31,
|
||||||||
2008
|
2007
|
|||||||
Raw
Material
|
$ | 202,435 | $ | 310,548 | ||||
Finished
Goods
|
229,638 | 102,843 | ||||||
Allowance for obsolete and slow moving inventory | (13,814 | ) | - | |||||
|
$ | 418,259 | $ | 413,391 |
As
of December 31,
|
||||||||
2008
|
2007
|
|||||||
At
cost:
|
||||||||
Mineral
rights
|
$
|
5,840,594
|
4,221,059
|
|||||
Buildings
|
6,410,813
|
2,379,252
|
||||||
Plant
and machinery
|
37,619,002
|
24,280,820
|
||||||
Motor
vehicles
|
57,947
|
54,154
|
||||||
Furniture,
fixtures and office equipment
|
2,353,789
|
1,120,058
|
||||||
Total
|
52,282,144
|
32,055,343
|
||||||
Less:
accumulated depreciation and amortization
|
6,882,688
|
1,950,158
|
||||||
Net
book value
|
$
|
45,399,456
|
30,105,185
|
December
31,
|
December
31,
|
|||||||
2008
|
2007
|
|||||||
Bank
borrowing from Citibank (China) Company Limited Shanghai Branch of
$3,770,250 was due March 30, 2008 at the prevailing interest rate
regulated by The People’s Bank of China minus 5% from October 31, 2007 to
March 30, 2008, guaranteed by a shareholder, Shenzhen Huayin Guaranty and
Investment Company Limited.
|
$ | - | $ | 3,770,250 |
December
31,
|
December
31,
|
||||||||
2008
|
2007
|
||||||||
Note
payable to a stockholder, Shenzhen Huayin Guaranty and Investment Company
Limited with interest at 3.33% per annum from March 20, 2007 to March 19,
2008 and was due on March 19, 2008. In March 2008, this amount was
consolidated as part of the $ 18,337,493 loan
|
- | 6,169,500 | |||||||
Note
payable to a stockholder, Shenzhen Huayin Guaranty and Investment Company
Limited is unsecured, non-interest bearing, pursuant to an agreement
which, as is Chinese custom, states that the loan need not be paid in the
immediate future. The Company believes the earliest the loan would be
required to be repaid is January 2011. This loan is denominated in
RMB.
|
18,337,493 | 5,484,000 | |||||||
Note
payable to a stockholder, Shenzhen Huayin Guaranty and Investment Company
Limited is unsecured, non-interest bearing and is due May 2009. The loan
is denominated in US dollars.
|
3,000,000 | - | |||||||
Loan
from a stockholder First Capital Limited is unsecured, non-interest
bearing with no fixed term of repayment.
|
1,650,000 |
-
|
|||||||
|
|
||||||||
Total
loans
|
22,987,493 | 11,653,500 | |||||||
Less:
current portion
|
(4,650,000 | ) | (6,169,500 | ) | |||||
Long-term
loans, less current portion
|
$ | 18,337,493 | $ | 5,484,000 | |||||
Future
maturities of notes payable-related parties are as
follows:
|
|
|
|||||||
2009
|
|
$ | - | $ | - | ||||
2010
|
- | - | |||||||
2011
|
|
18,337,493 |
5,484,000
|
||||||
Total
|
$ | 18,287,493 | $ | 5,484,000 |
Due
to related parties consists of the following:
|
||||||||
December
31,
|
December
31,
|
|||||||
2008
|
2007
|
|||||||
(unaudited)
|
(audited)
|
|||||||
Advance
from major stockholder - First Capital Limited
|
$ | - | $ | 32,230 | ||||
Due
to related company - Jiaxing Lighting
|
852,067 | - | ||||||
$ | 852,067 | $ | 32,230 |
Taxes
payable consists of the following:
|
||||||||
As
of December 31,
|
||||||||
2008
|
2007
|
|||||||
Income
tax payable
|
$ | 2,329,227 | $ | 798,090 | ||||
Mineral
resource compensation fee payable
|
291,861 | |||||||
Value
added tax payable and others
|
1,6548,354 | 679,206 | ||||||
Total
|
$ | 4,269,442 | $ | 1,477,296 |
Option
&Warrants
Outstanding
|
Option
&Warrants
Vested
|
Range
of
Exercise
Price per Common Share
|
||||||||||
Granted
or vested during year ended December 31, 2007
|
100,000 | 100,000 | $2.00 - $2.05 | |||||||||
Balance,
December 31, 2007
|
100,000 | 100,000 | $2.00 - $2.05 | |||||||||
Granted
or vested during year ended December 31, 2008
|
1,200,000 | 349,999 | $0.21 -$ 2.51 | |||||||||
Expired
during the year ended December 31, 2008
|
- | - | - | |||||||||
Balance,
December 31, 2008
|
1,300,000 | 449,999 | $0.21 - $2.51 |
Stock
and Warrants Options Outstanding
|
||||||
Number
Outstanding
|
Weighted
Average
|
Weighted
Average
|
||||
Range
of
|
Currently
Exercisable
|
Remaining
|
Exercise
Price of Options
|
|||
Exercise
Prices
|
at
December 31, 2008
|
Contractual
Life (Years)
|
Currently
Exercisable
|
|||
$0.21-$2.51
|
449,999
|
1.60
|
$ 1.91
|
Year
ended
December 31 |
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Current
taxes – PRC
|
$ | 8,202,477 | $ | 7,043,641 | $ | 1,879,582 | ||||||
Non-deductible
items disallowed for prior year
|
- | 706,869 |
-
|
|||||||||
Others
|
9,462 | 48,172 | 4,662 | |||||||||
|
|
|
|
|||||||||
|
$ | 8,211,939 | $ | 7,798,682 | $ | 1,884,244 |
Year
ended
December 31 |
||||||||||||
2008
|
2007
|
2006
|
||||||||||
Statutory
income tax rate
|
25 | % | 33 | % | 33 | % | ||||||
Non-deductible
items disallowed for prior year
|
- | % | 4 | % | - | % | ||||||
Non-deductible
items
|
2 | % | 2 | % | - | % | ||||||
|
|
|
|
|||||||||
Effective
tax rate
|
27 | % | 39 | % | 33 | % |
Bromine
|
||||||||||||||||||||
and
Crude
|
Chemical
|
Segment
|
Consolidated
|
|||||||||||||||||
December
31, 2008
|
Salt
|
Products
|
Total
|
Corporate
|
Total
|
|||||||||||||||
Net
revenue
|
63,664,156 | $ | 23,824,178 | $ | 87,488,334 | $ | - | $ | 87,488,334 | |||||||||||
Income
(loss) from operations
|
24,663,244 | 8,121,203 | 32,784,447 | (2,209,290 | ) | 30,577,157 | ||||||||||||||
Total
assets
|
67,868,644 | 20,899,118 | 88,767,762 | 591,704 | 89,359,466 | |||||||||||||||
Depreciation
and amortization
|
4,123,131 | 604,734 | 4,727,865 | - | 4,727,865 | |||||||||||||||
Capital
expenditures
|
10,529,286 | 6,835,909 | 17,365,195 |
-
|
17,365,195 | |||||||||||||||
December
31, 2007
|
||||||||||||||||||||
Net
revenue
|
34,015,484 | 19,764,829 | 53,780,313 | - | 53,780,313 | |||||||||||||||
Maintenance
service income
|
- | 468,337 | 468,337 | - | 468,337 | |||||||||||||||
Income
(loss) from operations
|
14,181,054 | 7,164,833 | 21,345,887 | (1,320,959 | ) | 20,024,928 | ||||||||||||||
Total
assets
|
36,614,939 | 9,516,930 | 46,131,869 | 197,963 | 46,329,832 | |||||||||||||||
Depreciation
and amortization
|
1,111,580 | 186,871 | 1,298,451 |
-
|
1,298,451 | |||||||||||||||
December
31, 2006
|
||||||||||||||||||||
Net
revenue
|
17,825,097 | 13,911,119 | 31,736,216 | - | 31,736,216 | |||||||||||||||
Income
(loss) from operations
|
1,728,746 | 3,714,475 | 5,443,221 | - | 5,443,221 | |||||||||||||||
Total
assets
|
9,835,484 | 5,069,584 | 14,905,068 | 50,000 | 14,955,068 | |||||||||||||||
Depreciation
and amortization
|
213,092 | 70,362 | 283,454 | - | 283,454 |
Years
ended December 31,
|
||||||||||||
Reconciliations
|
2008
|
2007
|
2006
|
|||||||||
Total
segment operating income
|
$ | 32,784,447 | $ | 21,345,887 | $ | 5,443,221 | ||||||
Corporate
overhead expenses
|
(2,209,290 | ) | (1,320,959 | ) | - | |||||||
Other
income (expense), net
|
30,254 | 6,717 | 252,483 | |||||||||
Income
tax expense
|
(8,211,939 | ) | (7,798,682 | ) | (1,884,244 | |||||||
|
|
|
|
|||||||||
Total
consolidated net income
|
$ | 22,395,472 | $ | 12,232,963 | $ | 3,811,460 |
December
31,
2008
|
December
31, 2007
|
|||||||
(unaudited)
|
(audited)
|
|||||||
Waiver
of interest expenses during first quarter 2008 by a related
party:
|
||||||||
Shenzhen
Huayin Guaranty and Investment Company Limited (Note 9)
|
$
|
131,533
|
$
|
-
|
||||
Note
and loan payable – First Capital Limited (Note 9)
|
1,650,000
|
|||||||
Shenzhen
Huayin Guaranty and Investment Company Limited (Note 9)
|
$
|
21,337,493
|
$
|
11,653,500
|
||||
Due
to related party:
|
||||||||
Jiaxing
Lighting (Note 10)
|
$
|
852,067
|
$
|
-
|
||||
Advance from major stockholder
-
First Capital
Limited
|
-
|
32,230
|
||||||
$
|
852,067
|
$
|
32,230
|
1.
|
pertain
to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the Company's
assets;
|
2.
|
provide
reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted
accounting principles, and that our receipts and expenditures are being
made only in accordance with authorizations of our management and
directors; and
|
3.
|
provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of our assets that could
have a material effect on the Company's financial
statements.
|
|
1.
|
Insufficient
complement of accounting personnel with the appropriate level of
accounting knowledge, experience and training in the application of
accounting principles generally accepted in the United States commensurate
with financial statement reporting
requirements.
|
|
2.
|
Inability
to timely and properly recognize issuance of share-based
compensation.
|
Name
|
Age
|
Title
|
|
Ming
Yang
|
42
|
Chairman
and Director
|
|
Xiaobin
Liu
|
41
|
Chief
Executive Officer and Director
|
|
Min
Li
|
31
|
Chief
Financial Officer and Director
|
|
Naihui
Miao
|
40
|
Secretary
and Director
|
|
Richard
Khaleel
|
58
|
Director
|
|
Biagio
Vignolo
|
61
|
Director
|
|
Shi
Tong Jiang
|
41
|
Director
|
Name
and principal position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
awards
($)
|
Option
awards
($)
|
Non-equity
incentive plan compensation
($)
|
Nonqualified
Deferred Compensation earnings
($)
|
All
other compensation
($)
|
Total
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
Ming
Yang, Chief Executive Officer (1)
|
2008
|
20,724
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
20,724
|
2007
|
3,342
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
3,342
|
|
2006
|
0
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
0
|
|
Min
Li Chief Financial Officer
|
2008
|
14,004
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
14,004
|
2007
|
2,674
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
2,674
|
|
2006
|
4,487
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
4,487
|
Name
|
Fees
Earned or Paid in Cash
($)
|
Stock
Awards
($)
|
Option
Awards
($)
|
Non-equity
incentive plan compensation
($)
|
Change
in pension value and nonqualified deferred compensation
earnings
($)
|
All
other compensation
($)
|
Total
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
Richard
Khaleel
|
32,500
|
N/A
|
10,500
|
N/A
|
N/A
|
N/A
|
43,000
|
Biagio
Vignolo
|
32,500
|
N/A
|
18,000
|
N/A
|
N/A
|
N/A
|
50,500
|
Shi
Tong Jiang *
|
6,055
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
6,055
|
Name and
Address
|
Shares
|
Percent
|
||||||
Beneficial owners of
more than 5%
:
|
||||||||
Billion
Gold Group Limited
|
8,000,000
|
6.55
|
%
|
|||||
Topgood
International Limited
|
7,000,000
|
5.73
|
%
|
|||||
Directors and
Executive Officers
:
|
||||||||
Ming
Yang
|
49,124,236
|
(1)
|
40.21
|
%
|
||||
Min
Li
|
0
|
--
|
||||||
Naihui
Miao
|
0
|
--
|
||||||
Richard
Khaleel
|
100,000
|
(2)
|
*
|
|||||
Biagio
Vignolo
|
100,000
|
(3)
|
*
|
|||||
Shi
Tong Jiang
|
0
|
--
|
||||||
Huang
Shixiang
|
0
|
--
|
||||||
All
directors and executive officers as a group
|
49,324,236
|
(1)
(2) (3)
|
40.37
|
%
|
December
31,
2008
|
December
31,
2007 |
|||||||
(unaudited)
|
(audited)
|
|||||||
Waiver
of interest expenses during first quarter 2008 by a related
party:
|
||||||||
Shenzhen
Huayin Guaranty and Investment Company Limited (Note 8)
|
$
|
131,533
|
$
|
-
|
||||
Note
payable - related parties
|
||||||||
Shenzhen
Huayin Guaranty and Investment Company Limited (Note 8)
|
$
|
21,337,493
|
$
|
11,653,500
|
||||
Loan
from First Capital Limited, a shareholder
|
$ |
1,650,000
|
||||||
|
||||||||
Due
to related party:
|
||||||||
Jiaxing
Lighting
|
$
|
852,067
|
$
|
-
|
||||
Advance
from major stockholder - First Capital Limited
|
-
|
32,230
|
||||||
$
|
852,067
|
$
|
32,230
|
Fiscal
Year Ended December 31,
|
||||||||
2008
|
2007
|
|||||||
Audit
Fees (1)
|
$
|
160,000
|
$
|
90,000
|
||||
Audit-Related
Fees (2)
|
$
|
4,965
|
$
|
45,000
|
||||
Tax
Fees (3)
|
$
|
-0-
|
$
|
-0-
|
||||
All
Other Fees
|
$
|
-0-
|
$
|
-0-
|
Exhibit
No.
|
|
Description
|
2.1
|
Agreement
and Plan of Merger dated December 10, 2006, among the Registrant, DFAX
Acquisition vehicle, Inc., Upper Class Group Limited and the shareholders
of UCG, incorporated herein by reference to Exhibit 10.1 to the
Registrant's Current Report on Form 8-K filed on December 12,
2006.
|
|
2.2
|
Share
Exchange Agreement among the Registrant, Upper Class Group Limited,
Shouguang City Haoyuan Chemical Company Limited, Shouguang Yuxin Chemical
Industry Company Limited and shareholders of Shouguang Yuxin Chemical
Industry Company Limited, incorporated herein by reference to Exhibit 10.1
to the Registrant's Current Report on Form 8-K filed on February 9,
2007.
|
|
3.1
|
Restated
Certificate of Incorporation, incorporated herein by reference to the
Registrant's Registration Statement on Form S-1 (No. 33-46580) declared
effective on November 18, 1992.
|
|
3.2
|
Amendment
to Restated Certificate of Incorporation, increasing the authorized
capital stock, incorporated herein by reference to Exhibit A to the
Registrant's definitive Schedule 14A filed on October_,
1995.
|
|
3.3
|
Amendment
to Restated Certificate of Incorporation, increasing the authorized
capital stock, incorporated herein by reference to Exhibit B to the
Registrant's definitive Schedule 14A filed on August 12,
1997.
|
|
3.4
|
Amendment
to Restated Certificate of Incorporation, increasing the authorized
capital stock, incorporated herein by reference to Exhibit A to the
Registrant's definitive Schedule 14A filed on October 16,
1998.
|
|
3.5
|
Amendment
to Restated Certificate of Incorporation, filed with the Secretary of the
State of Delaware on October 16, 2006, effecting a reverse stock
split.
|
|
3.6
|
Amendment
to Restated Certificate of Incorporation, changing the name of the
Registrant to Gulf Resources, Inc., incorporated herein by reference to
Exhibit 3.1 of the Registrant's Current Report on Form 8-K filed on
February 20, 2007.
|
|
3.7
|
Amendment
to Restated Certificate of Incorporation, increasing the authorized
capital stock of the Registrant and effecting a 2-for-1 forward stock
split, incorporated herein by reference to Exhibit 3.1 of the Registrant's
Current Report on Form 8-K filed on December 4, 2007.
|
|
3.8
|
By-laws,
incorporated herein by reference to Exhibit 3.2 to the Registrant's
Registration Statement on Form S-1 (No. 33-46580) declared effective on
November 18, 1992.
|
|
4.1
|
Certificate
of Designation, Powers, Preferences and Rights of Series D Convertible
Preferred Stock incorporated herein by reference to Exhibit 3 (c) to the
Registrant's Registration Statement on Form SB-2 (No. 33-30021) filed on
June 25, 1997.
|
|
4.2
|
Non-interest
bearing promissory note dated April 7, 2007 in the aggregate principal
amount of $3,051,282 issued to Wenbo Yu incorporated herein by reference
to Exhibit 99.2 to the Registrant's Current Report on Form 8-K filed on
April 10, 2007.
|
|
10.1
|
Stock
Purchase Agreement, dated as of August 25, 2006, by and between Juxiang Yu
and Irwin Horowitz, incorporated herein by reference to Exhibit 99.1 to
the Registrant's Current Report on Form 8-K filed on August 31,
2006.
|
|
10.2
|
Asset
Purchase Agreement between Shouguang City Haoyuan Chemical Company Limited
and Dong Hua Yang dated June 8, 2007, incorporated herein by reference to
Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed on June
11, 2007.
|
|
10.3
|
Asset
Purchase Agreement between the Registrant and Shouguang City Haoyuan
Chemical Company Limited and Wenbo Yu dated April 4, 2007, incorporated
herein by reference to Exhibit 99.1 to the Registrant's Current Report on
Form 8-K filed on April 10, 2007.
|
|
10.4
|
Asset
Purchase Agreement between Shouguang City Haoyuan Chemical Company Limited
and Jianci Wang dated as of October 25, 2007, incorporated herein by
reference to Exhibit 10.1 to the Registrant's Current Report on Form 8-K
filed on October 31, 2007.
|
|
10.5
|
Asset
Purchase Agreement between Shouguang City Haoyuan Chemical Company Limited
and Xingji Liu dated October 26 2007, incorporated herein by reference to
Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed on
October 31, 2007.
|
|
10.6
|
Asset
Purchase Agreement between Shouguang City Haoyuan Chemical Company Limited
and Qiufen Yuan, Han Wang and Yufen Zhang dated January 7, 2009,
incorporated herein by reference to Exhibit 10.1 to the Registrant’s
Current Report on Form 8-K filed on January 7,
2009.
|
|
10.7
|
Amendment
Agreement between the Registrant, Shouguang City Haoyuan Chemical Company
Limited,
China Finance,
Inc., Shenzhen Hua Yin Guaranty and Investment Company, Top King Group
Limited, Billion Gold Group Limited, Topgood International Limited
dated January 24, 2009, incorporated herein by reference to Exhibit
10.1 to the Registrant’s Current Report on Form 8-K filed on February 6,
2009.
|
|
10.8
|
Agreement
by and between the Registrant and Biagio Vignolo, dated November 6,
2007.*
|
|
10.9
|
Agreement
by and between the Registrant and Richard Khaleel, dated October 24,
2007.*
|
|
10.10
|
Employment
Contract by and between the Registrant and Xiaobin Liu, incorporated
herein by reference to Exhibit 10.1 to the Registrant's current report on
Form 8-K filed on March 16, 2009
|
|
10.11
|
Employment
Contract by and between the Registrant and Jiang Shitong, dated April 1,
2008.*
|
|
14
|
Code
of Ethics*
|
|
21.1
|
List
of Subsidiaries, incorporate herein by reference to Exhibit 21.1 to the
Registrant’s Annual Report on Form 10-K filed on March 12,
2008.
|
|
31.1
|
Certification
pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002*
|
|
31.2
|
Certification
pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section
302 of the Sarbanes-Oxley Act of 2002*
|
|
32.1
|
Certification
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002*
|
Date: March
16, 2009
|
By:
|
/s/
Xiaobin Liu
|
By:
Xiaobin Liu
|
||
Title:
Chief Executive Officer
(principal
executive officer)
|
||
By:
|
/s/
Min Li
|
|
By:
Min Li
|
||
Title:
Chief Financial Officer
(principal
financial
and
accounting officer)
|
SIGNATURE
|
TITLE
|
DATE
|
||
/s/
Xiaobin Liu
|
March
13, 2009
|
|||
Xiaobin
Liu
|
Chief
Executive Officer
|
|||
/s/
Ming Yang
|
March
13, 2009
|
|||
Ming
Yang
|
Chairman
and Director
|
|||
/s/
Min Li
|
March
13, 2009
|
|||
Min
Li
|
Chief
Financial Officer and Director
|
|||
/s/
Naihui Miao
|
March
13, 2009
|
|||
Naihui
Miao
|
Director
|
|||
/s/
Richard Khaleel
|
March
13, 2009
|
|||
Richard
Khaleel
|
Director
|
|||
/s/
Biagio Vignolo
|
March
13, 2009
|
|||
Biagio
Vignolo
|
Director
|
|||
/s/
Shi Tong Jiang
|
March
13, 2009
|
|||
Shi
Tong Jiang
|
Director
|
|
·
|
Act
with honesty and integrity, avoiding actual or apparent conflicts of
interest in personal and professional relationships, including disclosure
to the Chairperson of the Audit Committee of any material transaction or
relationship that reasonably could be expected to give rise to such a
conflict.
|
|
·
|
诚实正直地行为,避免个人与职业之间发生实际和明显的利益冲突,包括向审计委员会主席说明可能会引起此种利益冲突的重大交易或关系。
|
|
·
|
Be
prohibited from: personally taking advantage of business opportunities
that are discovered through the use of corporate property, information or
his or her position with the company; using corporate property,
information or his or her position for personal gain; or competing against
the company while an employee.
|
|
·
|
禁止:个人利用在公司的财产、信息使用中、或本人在公司的职位上发现的商业机会;使用公司财产、信息、或本人在公司的职位来谋求个人利益;或在公司工作期间与公司竞争。
|
|
·
|
Provide
information within the scope of his or her duties in a manner which
promotes full, fair, accurate, timely and understandable disclosure in
reports and documents that the company files with, or submits to,
government agencies and in the company's other public
communications.
|
|
·
|
在工作职责范围内以一定的方式提供信息,以提高公司向政府机构提交或公司向公众呈现的报告和文件中内容的完整性、公正性、准确性、及时性和易理解性。
|
|
·
|
Comply
with rules and regulations of foreign, federal, state, provincial and
local governments, and other appropriate private and public regulatory
agencies, including insider trading
laws.
|
|
·
|
遵守外国、联邦、州、省、地方政府及其他的可适用的私立或政府管理机构的规章制度,包括内幕交易法。
|
|
·
|
Act
in good faith, responsibly, with due care, competence and diligence,
without misrepresenting material facts or allowing one's independent
judgment to be subordinated.
|
|
·
|
处事诚信、负责、认真、胜任、勤勉,不曲解重要的事实或是服从领导。
|
|
·
|
Deal
fairly with the company’s customers, suppliers, competitors and employees,
and not take unfair advantage of anyone through manipulation, concealment,
abuse of privileged information, misrepresentation of material facts, or
any other unfair dealings.
|
|
·
|
公平对待公司的客户、供应商、竞争对手和职员,不通过操纵、隐瞒、滥用特许信息、虚报重要的事实或者任何其他不公平的交易的手段而对他人不正当地利用。
|
|
Respect the confidentiality of
information acquired in the course of one's work except when authorized or
otherwise legally obligated to disclose it, and not use confidential
information acquired in the course of one's work for personal
advantage.
|
|
·
|
注意对个人工作中获得的资料保密,
除非获得批准或有法律义务进行公开
。不得利用在工作中获得机密资料谋求个人利益。
|
|
·
|
Proactively
promote and be an example of ethical behavior.
|
|
·
|
积极努力,成为遵守道德规范的表率。
|
|
·
|
Achieve
responsible use of and control over all assets and resources employed or
entrusted.
|
|
·
|
对所使用或看管的所有资产和物资有责任心。
|
|
·
|
Promptly
report to the Chairperson of the Audit Committee any conduct that the
individual believes to be or would give rise to a violation of law or
business ethics or of any provision of this Code of Ethics or the
company's general Code of
Conduct.
|
|
·
|
如发现任何可导致违法的行为、违背商业道德、违背这一道德规范或是违背公司
一般行为守则的行为,迅速向审计委员会主席汇报。
|
By:
|
/s/
Xiaobin Liu
|
|
Xiaobin
Liu
|
||
Chief
Executive Officer
|
||
Dated:
March 13, 2009
|
By:
|
/s/
Min Li
|
|
Min
Li
|
||
Chief
Financial Officer
|
||
Dated: March
13, 2009
|
Dated:
March 13, 2009
|
||
By:
|
/s/Xiaobin
Liu
|
|
Xiaobin
Liu
|
||
Chief
Executive Officer
|
||
Dated:
March 13, 2009
|
||
By:
|
/s/
Min Li
|
|
Min
Li
|
||
Chief
Financial Officer
|
||