DISCONTINUED OPERATIONS |
In December 2013, the Board of Directors authorized
ForceField’s management to pursue the sale of its equity interests in Baokai and Wendeng. Accordingly, the assets and liabilities
of these business segments were separately reported as “assets and liabilities of discontinued operations held for sale”
as of December 31, 2013 and 2012. The results of operations of these two business segments, for all periods, were separately reported
as “discontinued operations”. In February 2014, the Company entered into two definitive agreements to sell and transfer
its equity interests in Baokai and Wendeng. These transactions were closed on February 19, 2014. See Note 20 — Subsequent
Events for additional information.
The operating results of the Company’s Baokai and Wendeng segments
classified as discontinued operations are summarized below:
|
|
Year Ended December 31, 2013 |
|
|
Year Ended December 31, 2012 |
|
|
|
Baokai |
|
|
Wendeng |
|
|
Total |
|
|
Baokai |
|
|
Wendeng |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales |
|
$ |
— |
|
|
$ |
2,059,584 |
|
|
$ |
2,059,584 |
|
|
$ |
1,202,450 |
|
|
$ |
686,353 |
|
|
$ |
1,888,803 |
|
Cost of goods sold |
|
|
— |
|
|
|
1,977,886 |
|
|
|
1,977,886 |
|
|
|
1,178,389 |
|
|
|
654,207 |
|
|
|
1,832,596 |
|
Gross margin |
|
|
— |
|
|
|
81,698 |
|
|
|
81,698 |
|
|
|
24,061 |
|
|
|
32,146 |
|
|
|
56,207 |
|
Operating expenses |
|
|
295,268 |
|
|
|
3,669,130 |
|
|
|
3,964,198 |
|
|
|
143,310 |
|
|
|
2,356,458 |
|
|
|
2,499,768 |
|
Other income (expense) |
|
|
— |
|
|
|
(156,790 |
) |
|
|
(156,790 |
) |
|
|
— |
|
|
|
(287,449 |
) |
|
|
(287,449 |
) |
Provision for income taxes (benefit) |
|
|
(1,557 |
) |
|
|
272,147 |
|
|
|
270,590 |
|
|
|
(129,788 |
) |
|
|
(229,106 |
) |
|
|
(358,894 |
) |
Net income (loss) |
|
$ |
(293,511 |
) |
|
$ |
(4,016,369 |
) |
|
$ |
(4,309,880 |
) |
|
$ |
10,539 |
|
|
$ |
(2,382,655 |
) |
|
$ |
(2,372,116 |
) |
The following table presents the major classes of assets and liabilities
of Baokai and Wendeng classified as held for sale in the consolidated balance sheets:
|
|
December 31, 2013 |
|
|
December 31, 2012 |
|
|
|
Baokai |
|
|
Wendeng |
|
|
Total |
|
|
Baokai |
|
|
Wendeng |
|
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
— |
|
|
|
57,764 |
|
|
|
57,764 |
|
|
|
— |
|
|
|
369,419 |
|
|
|
369,419 |
|
Accounts receivable, net |
|
|
— |
|
|
|
1,362,977 |
|
|
|
1,362,977 |
|
|
|
1,805,167 |
|
|
|
2,380,679 |
|
|
|
4,185,846 |
|
Inventory, net |
|
|
— |
|
|
|
993,356 |
|
|
|
993,356 |
|
|
|
— |
|
|
|
323,141 |
|
|
|
323,141 |
|
Deferred tax assets, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
36,136 |
|
|
|
54,121 |
|
|
|
90,257 |
|
Prepaid expenses and other current assets |
|
|
— |
|
|
|
549,230 |
|
|
|
549,230 |
|
|
|
— |
|
|
|
370,121 |
|
|
|
370,121 |
|
Total current assets of discontinued operations held for sale |
|
|
— |
|
|
|
2,963,527 |
|
|
|
2, 963,527 |
|
|
|
1,841,303 |
|
|
|
3,497,481 |
|
|
|
5,338,784 |
|
Property, plant and equipment, net |
|
|
— |
|
|
|
9,093,802 |
|
|
|
9,093,802 |
|
|
|
— |
|
|
|
7,547,128 |
|
|
|
7,547,128 |
|
Intangible assets, net |
|
|
— |
|
|
|
2,076,306 |
|
|
|
2,076,306 |
|
|
|
— |
|
|
|
2,590,983 |
|
|
|
2,590,983 |
|
Related party receivables |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
413,061 |
|
|
|
413,061 |
|
Deferred tax assets, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
224,653 |
|
|
|
224,653 |
|
Other assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
21,956 |
|
|
|
21,956 |
|
Total noncurrent assets of discontinued operations held for sale |
|
|
— |
|
|
|
11,170,108 |
|
|
|
11,170,108 |
|
|
|
— |
|
|
|
10,797,781 |
|
|
|
10,797,781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
— |
|
|
|
3,142,119 |
|
|
|
3,142,119 |
|
|
|
1,515,489 |
|
|
|
1,941,141 |
|
|
|
3,456,630 |
|
Accrued liabilities |
|
|
— |
|
|
|
103,958 |
|
|
|
103,958 |
|
|
|
— |
|
|
|
248,349 |
|
|
|
248,349 |
|
Related party payables |
|
|
— |
|
|
|
8,180,490 |
|
|
|
8,180,490 |
|
|
|
— |
|
|
|
5,638,840 |
|
|
|
5,638,840 |
|
Income taxes payable |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
23,872 |
|
|
|
— |
|
|
|
1,183,884 |
|
Total current liabilities of discontinued operations held for sale |
|
|
— |
|
|
|
11,426,567 |
|
|
|
11,426,567 |
|
|
|
1,539,361 |
|
|
|
7,828,330 |
|
|
|
9,367,691 |
|
Deferred tax liabilities, net |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
12,619 |
|
|
|
— |
|
|
|
12,619 |
|
Unrecognized tax benefits |
|
|
— |
|
|
|
1,324,226 |
|
|
|
1,324,226 |
|
|
|
|
|
|
|
1,160,012 |
|
|
|
1,160,012 |
|
Total noncurrent liabilities of discontinued operations held for sale |
|
|
— |
|
|
|
1,324,226 |
|
|
|
1,324,226 |
|
|
|
12,619 |
|
|
|
1,160,012 |
|
|
|
1,172,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net assets held for sale |
|
|
— |
|
|
|
1,382,842 |
|
|
|
1,382,842 |
|
|
|
289,323 |
|
|
|
5,306,920 |
|
|
|
5,596,243 |
|
|