SEC Info℠ | Home | Search | My Interests | Help | Sign In | Please Sign In | ||||||||||||||||||||
As Of Filer Filing For·On·As Docs:Size Issuer Agent 1/20/10 Gulf Resources, Inc. S-1 3:3.3M E-Data Systems, Inc./FA |
Document/Exhibit Description Pages Size 1: S-1 Registration Statement (General Form) HTML 1.78M 2: EX-5.1 Opinion re: Legality HTML 12K 3: EX-23.1 Consent of Experts or Counsel HTML 6K
Unassociated Document |
Delaware
|
13-3637458
|
2800
|
(State
or Other Jurisdiction of
Incorporation
or Organization)
|
(IRS
Employer Identification No.)
|
(Primary
Standard Industrial
Classification
Code Number)
|
Large accelerated filer
¨
|
Accelerated filer
¨
|
Non-accelerated filer
ý
(Do not check if smaller
reporting company)
|
Smaller reporting company ¨
|
Title
of each class of securities to
be
registered
|
Amount
of
shares
to be
registered
(1)
|
Proposed
Maximum
offering
price
per
share (2)
|
Proposed
maximum
aggregate
offering
price
|
Amount
of
registration
fee
|
||||||||||
Common
Stock, par value $0.0005 per share
|
2,941,182
|
$12.85
|
|
$37,794,188.70
|
$2,694.73
|
|||||||||
Common
Stock, par value $0.0005 per share underlying the Warrant
|
176,471
|
$12.85
|
2,267,652.35
|
161.68
|
||||||||||
Total
|
3,117,653
|
|
|
$40,061,841.05
|
$2,856.41
|
(1)
|
Pursuant
to Rule 416 under the Securities Act of 1933, as amended, this
registration statement includes an indeterminate number of shares as may
become necessary to adjust the number of shares issued by the Registrant
to the Selling Stockholders resulting from stock splits, stock dividends
or similar transactions involving the Common
Stock.
|
(2)
|
Estimated
solely for the purpose of calculating the registration fee in accordance
with Rule 457(c) under the Securities Act of 1933, as amended,
based on the average of the high and low prices of our common stock
reported on the NASDAQ Global Select Market on January 15,
2010.
|
Prospectus
|
Subject
to Completion, Dated January 20,
2010
|
1
|
|
2
|
|
3
|
|
4
|
|
12
|
|
12
|
|
13
|
|
15
|
|
29
|
|
47
|
|
53
|
|
55
|
|
56
|
|
59
|
|
61
|
|
62
|
|
64
|
|
64
|
|
64
|
|
Q-1
|
Common
Stock being offered by Selling Stockholders
|
3,117,653
shares
|
|
Common
Stock outstanding
|
34,541,066
shares as of the date of this Prospectus
|
|
Common
Stock outstanding after the Offering (assuming full exercise of the
Warrant)
|
34,717,537
|
|
Use
of Proceeds
|
We
will not receive any proceeds from the sale of shares by the Selling
Stockholders. However, to the extent that the Warrant is
exercised for cash, we will receive proceeds from any exercise of the
Warrant up to an aggregate of approximately $1.8 million. We intend to use
any proceeds received from the exercise of the Warrant, for working
capital and other general corporate purposes.
|
|
Trading
|
Our
Common Stock is listed on The Nasdaq Global Select Market under the symbol
“GFRE.”
|
|
Risk
Factors
|
The
securities offered by this prospectus are speculative and involve a high
degree of risk and investors purchasing securities should not purchase the
securities unless they can afford the loss of their entire investment. See
“Risk Factors” beginning on page 4.
|
·
|
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.
|
Year Ended December 31,
|
Year End
|
Yearly
Average
|
||||||
|
||||||||
2007
|
7.2946
|
7.5806
|
||||||
2008
|
6.8225
|
6.9193
|
||||||
2009
|
6.8282
|
6.8314
|
||||||
Month End
|
Monthly
Average
|
|||||||
2010
|
||||||||
January
(to January 15, 2010)
|
6.8271
|
6.8276
|
(1)
|
For
periods prior to January 1, 2008, the exchange rates reflect the noon
buying rates as reported by the Federal Reserve Bank of New York. For
periods after January 1, 2008, the exchange rates reflect the exchange
rates as set forth on the website of The People’s Bank of
China.
|
(2)
|
Annual
averages are calculated from month-end rates. Monthly averages are
calculated using the average of the daily rates during the relevant
period.
|
Year
Ended December 31,
|
Nine
Months Ended
September
30
|
|||||||||||||||||||
2008
|
2007
|
2006
|
2009
|
2008
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||||||
(in
thousands, except per share data)
|
||||||||||||||||||||
Statement
of Operations Data:
|
||||||||||||||||||||
$ | 87,488 | $ | 54,248 | $ | 31,736 | $ | 80,892 | 63,355 | ||||||||||||
(52,302 | ) | (32,108 | ) | (20,504 | ) | (45,520 | ) | 38,051 | ||||||||||||
35,186 | 22,140 | 11,232 | 35,371 | 25,304 | ||||||||||||||||
Operating
expenses:
|
||||||||||||||||||||
General
and administrative expenses
|
(4,466 | ) | (2,082 | ) | (5,789 | ) | (2,966 | ) | (2,824 | ) | ||||||||||
Depreciation
and amortization
|
(143 | ) | (33 | ) |
-
|
(4,817 | ) | (3,426 | ) | |||||||||||
(4,609 | ) | (2,115 | ) | (5,789 | ) | (7,783 | ) | (6,250 | ) | |||||||||||
30,577 | 20,025 | 5,443 | 32,030 | 22,089 | ||||||||||||||||
Interest
income (expense), net
|
34 | (107 | ) | 6 | - | - | ||||||||||||||
Other
income (expense), net
|
(4 | ) | 113 | 246 | 38 | 6 | ||||||||||||||
Income
before income taxes
|
30,607 | 20,031 | 5,695 | 32,068 | 22,096 | |||||||||||||||
(8,212 | ) | (7,798 | ) | (1,884 | ) | (8,236 | ) | (5,926 | ) | |||||||||||
22,395 | 12,233 | 3,811 | 23,833 | 16,170 | ||||||||||||||||
Net
income per share
|
||||||||||||||||||||
$ | 0.22 | $ | 0.13 | $ | 0.04 | $ | 0.79 | $ | 0.65 | |||||||||||
$ | 0.22 | $ | 0.13 | $ | 0.04 | $ | 0.79 | $ | 0.65 | |||||||||||
Weighted
average number of shares outstanding
|
||||||||||||||||||||
99,668,842 | 96,688,504 | 86,410,880 | 30,179,367 | 24,917,211 | ||||||||||||||||
99,668,842 | 96,688,504 | 86,410,880 | 30,179,367 | 24,919,164 |
As
of December 31,
|
As
of
September
30
|
|||||||||||||||
2008
|
2007
|
2006
|
2009
|
|||||||||||||
(Unaudited)
|
||||||||||||||||
(in
thousands)
|
||||||||||||||||
Balance
Sheet Data:
|
||||||||||||||||
$ | 30,878 | $ | 10,773 | $ | 5,692 | $ | 19,257 | |||||||||
24,669 | 1,150 | 3,151 | 22,207 | |||||||||||||
89,359 | 46,329 | 14,955 | 117,406 | |||||||||||||
36,890 | 19,861 | 6,722 | 13,336 | |||||||||||||
52,469 | 26,468 | 8,232 | 104,069 |
Three
months ended
|
Three
months
ended
|
Percentage
Change
|
||||||||||
Net
Revenue
|
$ | 27,667,158 | $ | 17,554,873 | 57.6 | % | ||||||
Cost
of Net Revenue
|
15,533,613 | 11,388,348 | 36.4 | % | ||||||||
Gross
Profit
|
12,133,545 | 6,166,525 | 96.8 | % | ||||||||
Research
and Development costs
|
125,122 | 122,744 | 1.9 | % | ||||||||
General
and Administrative expenses
|
870,555 | 960,747 | -9.4 | % | ||||||||
Income
from operations
|
11,137,869 | 5,083,034 | 119.1 | % | ||||||||
Other
Income (expenses), net
|
19,713 | 26,922 | -26.8 | % | ||||||||
Income
before taxes
|
11,157,582 | 5,109,956 | 118.4 | % | ||||||||
Income
Taxes
|
2,829,772 | 1,373,055 | 106.1 | % | ||||||||
Net
Income
|
$ | 8,327,810 | $ | 3,736,901 | 122.9 | % |
Nine
months
ended
|
Nine
months
ended
|
Percentage
Change
|
||||||||||
Net
Revenue
|
$ | 80,891,594 | $ | 63,354,609 | 27.7 | % | ||||||
Cost
of Net Revenue
|
45,520,357 | 38,050,971 | 19.6 | % | ||||||||
Gross
Profit
|
35,371,237 | 25,303,638 | 39.8 | % | ||||||||
Research
and Development costs
|
375,187 | 389,853 | 03.8 | % | ||||||||
General
and Administrative expenses
|
2,966,375 | 2,824,377 | 5.0 | % | ||||||||
Income
from operations
|
32,029,675 | 22,089,408 | 45.0 | % | ||||||||
Other
Income (expenses), net
|
38,462 | 6,525 | 489.5 | % | ||||||||
Income
before taxes
|
32,068,138 | 22,095,933 | 45.1 | % | ||||||||
Income
Taxes
|
8,235,609 | 5,925,532 | 39.0 | % | ||||||||
Net
Income
|
$ | 23,832,529 | $ | 16,170,401 | 47.4 | % |
Net
Revenue by Segment
|
||||||||||||||||
Three
months ended
|
Three
months ended
|
|||||||||||||||
Segment
|
Percent
of total
|
Percent
of total
|
||||||||||||||
Bromine
and Crude salt
|
$
|
18,814,932
|
68%
|
$
|
13,106,804
|
74.7%
|
||||||||||
Chemical
Products
|
8,852,226
|
32%
|
4,448,069
|
25.3%
|
||||||||||||
Total
Revenues
|
$
|
27,667,158
|
100.0%
|
$
|
17,554,873
|
100.0%
|
Three
months ended September 30
|
|
2009
vs. 2008
|
|
Segment
|
Percent
increase of Net revenue
|
Bromine
and Crude salt
|
43.5%
|
Chemical
Products
|
99.0%
|
Net
Revenue by Segment
|
||||||||||||||||
Nine
months ended
|
Nine
months ended
|
|||||||||||||||
Segments
|
Percent
of total
|
Percent
of total
|
||||||||||||||
Bromine
and Crude salt
|
$
|
54,874,656
|
67.8%
|
$
|
47,627,468
|
75.2%
|
||||||||||
Chemical
Products
|
26,016,938
|
32.2%
|
15,727,141
|
24.8%
|
||||||||||||
Total
Revenues
|
$
|
80,891,594
|
100.0%
|
$
|
63,354,609
|
100.0%
|
Nine
Months Ended September 30
|
|
2009
vs. 2008
|
|
Segment
|
Percent
increase of Net revenue
|
Bromine
and Crude salt
|
15.2%
|
Chemical
Products
|
65.4%
|
Three
months ended September 30
|
||||||||||||||||
2009
|
%
of Net revenue
|
2008
|
%
of Net revenue
|
|||||||||||||
Cost
of net revenue
|
$
|
15,533,613
|
56.1
|
%
|
$
|
11,388,348
|
64.9
|
%
|
||||||||
Gross
Profit
|
12,133,545
|
43.9
|
%
|
6,166,525
|
35.1
|
%
|
||||||||||
Nine
months ended September 30
|
||||||||||||||||
2009
|
%
of Net revenue
|
2008
|
%
of Net revenue
|
|||||||||||||
Cost
of net revenue
|
$
|
45,520,357
|
56.3
|
%
|
$
|
38,050,971
|
60.0
|
%
|
||||||||
Gross
Profit
|
35,371,237
|
43.7
|
%
|
25,303,638
|
40.0
|
%
|
Income
from Operations by Segment
|
||||||||||||||||
Three
months ended
|
Three
months ended
|
|||||||||||||||
Segment
|
Percent
of total
|
Percent
of total
|
||||||||||||||
Bromine
and Crude salt
|
$
|
8,245,278
|
73.0%
|
$
|
4,086,664
|
74.8%
|
||||||||||
Chemical
Products
|
3,053,245
|
27.0%
|
1,369,393
|
25.2%
|
||||||||||||
Income
from operations before corporate costs
|
11,298,523
|
100%
|
5,465,194
|
100.0%
|
||||||||||||
Corporate
costs
|
(160,654)
|
(382,160)
|
||||||||||||||
Income
from operations
|
$
|
11,137,869
|
$
|
5,083,034
|
Income
from Operations by Segment
|
||||||||||||||||
Nine
months ended
|
Nine
months ended
|
|||||||||||||||
Segment
|
Percent
of total
|
Percent
of total
|
||||||||||||||
Bromine
and Crude salt
|
$
|
23,986,058
|
73.0%
|
$
|
18,427,749
|
77.8%
|
||||||||||
Chemical
Products
|
8,879,769
|
27.0%
|
5,252,071
|
22.2%
|
||||||||||||
Income
from operations before corporate costs
|
32,865,827
|
100.0%
|
23,679,820
|
100.0%
|
||||||||||||
Corporate
costs
|
(836,152)
|
(1,590,412)
|
||||||||||||||
Income
from operations
|
$
|
32,029,675
|
$
|
22,089,408
|
Nine
Months Ended
September
30
|
||||||||
2009
|
2008
|
|||||||
Net
cash provided by operating activities
|
$
|
27,958,786
|
$
|
17,617,854
|
||||
Net
cash used in investing activities
|
(33,828,480)
|
(17,365,195)
|
||||||
Net
cash provided by financing activities
|
(5,747,597)
|
11,144,787
|
||||||
Net
cash inflow (outflow)
|
$
|
(11,621,540)
|
$
|
12,100,485
|
For
the year ended
|
||||||||||||
%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
|
|||||||||||||||
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
|
|||||||||||||||
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
|
||
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
|
|||||||||||||||
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
|
|||||||||||||||
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
|
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
|
Year
of Maturity
|
||||||||
2008
|
2009
|
|||||||
Bank
Borrowing
|
$
|
3,770,250
|
-
|
|||||
Average
Interest Rate
|
6.5
|
%
|
-
|
|||||
Note
payable including Current portion
|
$
|
6,169,500
|
$
|
5,484,000
|
||||
Average
Interest Rate
|
3.33
|
%
|
n/a
|
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
|
-
|
-
|
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
Revenue by Segment
|
||||||||||||||||
Nine
months ended
|
Nine
months ended
|
|||||||||||||||
Segments
|
Percent
of total
|
Percent
of total
|
||||||||||||||
Bromine
and Crude salt
|
$
|
54,874,656
|
67.8%
|
$
|
47,627,468
|
75.2%
|
||||||||||
Chemical
Products
|
26,016,938
|
32.2%
|
15,727,141
|
24.8%
|
||||||||||||
Total
Revenues
|
$
|
80,891,594
|
100.0%
|
$
|
63,354,609
|
100.0%
|
Nine
Months Ended September 30
|
|
2009
vs. 2008
|
|
Segment
|
Percent
increase of Net revenue
|
Bromine
and Crude salt
|
15.2%
|
Chemical
Products
|
65.4%
|
Income
from Operations by Segment
|
||||||||||||||||
Nine
months ended
|
Nine
months ended
|
|||||||||||||||
Segment
|
Percent
of total
|
Percent
of total
|
||||||||||||||
Bromine
and Crude salt
|
$
|
23,986,058
|
73.0%
|
$
|
18,427,749
|
77.8%
|
||||||||||
Chemical
Products
|
8,879,769
|
27.0%
|
5,252,071
|
22.2%
|
||||||||||||
Income
from operations before corporate costs
|
32,865,827
|
100.0%
|
23,679,820
|
100.0%
|
||||||||||||
Corporate
costs
|
(836,152)
|
(1,590,412)
|
||||||||||||||
Income
from operations
|
$
|
32,029,675
|
$
|
22,089,408
|
Net Sales by Segment
|
||||||||||||||||
Twelve
Months Ended
|
Twelve
Months Ended
|
|||||||||||||||
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
|
Twelve
Months Ended
|
|||||||||||||||
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
|
||||||||||||||||
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
|
|||||||||||||||
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.
|
Property
|
Factory
No. 1 – Haoyuan General Factory
|
Area
|
4,135
hectares
|
Date
of Acquisition
|
|
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
|
|
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
|
|
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
|
|
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
|
|
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
|
|
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
|
Property
|
Factory
No. 7 – Qiufen Yuan, Han Wang,
Yufen
Zhang
|
Area
|
652
hectares
|
Date
of Acquisition
|
|
Land
Use Rights Lease Term
|
50
years
|
Land
Use Rights Expiration Date
|
February
22, 2059
|
Prior
Fees Paid for Land Use Rights
|
N/A
|
Annual
Rent
|
RMB163,000
|
Mining
Permit No.:
|
3707000730088
|
Date
of Permission:
|
January
2005, subject to annual renewal
|
Period
of Permission:
|
One
year
|
Property
|
Factory
No. 8- Fengxia Yuan, Han Wang, Qing Yang
|
Area
|
1,102
hectares
|
Date
of Acquisition
|
|
Land
Use Rights Lease Term
|
50
years
|
Land
Use Rights Expiration Date
|
August
19,2059
|
Prior
Fees Paid for Land Use Rights
|
N/A
|
Annual
Rent
|
RMB330,600
|
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 Ratio
|
2008
Utilization Ratio
|
2009
Utilization
Ratio
|
Factory
No. 1
|
4,135
|
776,000
|
10,000
|
92.6%
|
95%
|
97.33%
|
Factory
No. 2
|
747
|
230,000
|
4,700(1)(2)
|
74.8%
|
90%
|
81.05%
|
Factory
No. 3
|
938
|
280,000
|
3,700(1)(3)
|
68.7%
|
87%
|
88.65%
|
Factory
No. 4
|
876
|
225,000
|
3,900(1)(4)
|
22.1%
|
92%
|
89.40%
|
Factory
No. 5
|
935
|
240,000
|
4,700(1)(5)
|
20.5%
|
94%
|
96.32%
|
Factory
No. 6
|
1,069
|
210,000
|
4,700(1)(6)
|
—
|
80%
|
79.21%
|
Factory
No. 7
|
654
|
3,000
|
3,500(1)(7)
|
—
|
—
|
67.86%
|
Factory
No. 8
|
1,102
|
150,000
|
4,100(1)(8)
|
—
|
—
|
10.24%
|
(1)
|
Each
of the properties described above was not in operation when the Company
acquired the asset. The owners of each of the properties did
not hold the proper license for the exploration and production of bromine,
and production at each of the assets acquired had been previously halted
by the government. With respect to Factory No. 2, the property
had not been operational for nine months; with respect to Factory No. 3,
the property had not been operational for eleven months; with respect to
Factory No. 4 and No. 5, the property had not been operational for fifteen
months; with respect to Factory No. 6, the property had not been
operational for eighteen months; with respect to Factory No. 7, the
property had not been operational for more than seven months; and with
respect to Factory No. 8, the property had not been operational for eight
months. This figures represent estimated annual production
capacity based upon existing facilities, historical production rates and
capital expenditure the Company planned for these assets to fund
improvements and make them
operational.
|
Facility
|
2007
|
2008
|
2009
|
|||
Production
(in
tons)
|
Price
(RMB/ton)
|
Production
(in
tons)
|
Price
(RMB/ton)
|
Production
(in
tons)
|
Price
(RMB/ton)
|
|
Factory
No. 1
|
9,264
|
14,435
|
9,502.2
|
14,899
|
11679.60
|
12,583.28
|
Factory
No. 2 (1)
|
3,520
|
14,172
|
4,235.1
|
14,819
|
4052.40
|
12,637.35
|
Factory
No. 3 (2)
|
2,747
|
14,491
|
3,221.1
|
14,858
|
4255.30
|
12,459.16
|
Factory
No. 4 (3)
|
816
|
14,506
|
3,579.3
|
14,822
|
4112.50
|
12,589.84
|
Factory
No. 5 (4)
|
801
|
14,539
|
4,396.8
|
14,843
|
4334.50
|
12,743.72
|
Factory
No. 6 (5)
|
–
|
–
|
3,738.0
|
14,891
|
3802.30
|
12,581.03
|
Factory
No. 7 (6)
|
–
|
–
|
–
|
–
|
2375.00
|
12,852.24
|
Factory
No. 8 (7)
|
–
|
–
|
–
|
–
|
420.00
|
15,356.39
|
Total
|
17,648
|
28,673
|
35,031.60
|
Name
|
Age
|
Title
|
||
Ming
Yang
|
42
|
Chairman
and Director
|
||
Xiaobin
Liu
|
41
|
Chief
Executive Officer and Director
|
||
Min
Li
|
31
|
Chief
Financial Officer
|
||
Naihui
Miao
|
40
|
Secretary
and Director
|
||
Richard
Khaleel
|
58
|
Director
|
||
Biagio
Vignolo
|
61
|
Director
|
||
Shi
Tong Jiang
|
41
|
Director
|
||
Ya
Fei Ji
|
45
|
Director
|
Name
and principal position
|
Year
|
Salary
($)
|
Bonus
($)
|
Stock
awards
($)
|
Option
awards
(1)
|
Non-equity
incentive plan compensation
($)
|
Nonqualified
Deferred Compensation earnings
($)
|
All
other compensation
($)
|
Total
($)
|
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
Ming
Yang, Chief Executive Officer (2)
|
2008
|
20,724
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
20,724
|
2009
|
26,361
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
26,361
|
|
Min
Li Chief Financial Officer
|
2008
|
14,004
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
14,004
|
2009
|
17,574
|
N/A
|
N/A
|
25,000
|
N/A
|
N/A
|
N/A
|
17,574
|
|
Xiaobin
Liu, Chief Executive Officer(3)
|
2008
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
N/A
|
2009
|
43,935
|
N/A
|
N/A
|
25,000
|
N/A
|
N/A
|
N/A
|
43,935
|
|
Option
awards
|
Stock
awards
|
||||||||||||||
Name
|
Number
of securities underlying unexercised options
(#)
exercisable
|
Number
of securities underlying unexercised options
(#)
unexercisable
|
Equity
incentive plan awards: number of securities underlying unexercised
unearned options
(#)
|
Option
exercise price
($)
|
Option
expiration date
|
Number
of shares or units of stock that have not vested
(#)
|
Market
value of shares or units of stock that have not vested
(#)
|
Equity
incentive plan awards: number of unearned shares, units or other rights
that have not vested
(#)
|
Equity
incentive plan awards: market or payout value of unearned shares, units or
other rights that have not vested
($)
|
||||||
(a)
|
(b)
|
(c)
|
(d)
|
(e)
|
(f)
|
(g)
|
(h)
|
(i)
|
(j)
|
||||||
Ming
Yang, CEO
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
||||||
Xiaobin
Liu, CEO
|
25,000
|
4.80
|
3/10/19
|
||||||||||||
Min
Li,
CFO
|
25,000
|
4.80
|
3/10/19
|
Name
|
Fees
Earned or Paid in Cash
($)
|
Stock
Awards
($)
|
Option
Awards
(1)
|
Non-equity
incentive plan compensation
($)
|
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
|
12,500
|
N/A
|
N/A
|
N/A
|
32,500
|
Biagio
Vignolo
|
32,500
|
N/A
|
12,500
|
N/A
|
N/A
|
N/A
|
32,500
|
Shi
Tong Jiang
|
10,000
|
N/A
|
12,500
|
N/A
|
N/A
|
N/A
|
10,000
|
Ya
Fei Ji
|
N/A
|
25,000
|
Name and Address of Beneficial
Owner
|
Amount and Nature of Beneficial
Ownership
|
Percent of Outstanding of Common
Stock
|
||||||
Beneficial owners of more than
5%:
|
||||||||
Billion
Gold Group Limited
|
2,000,000
|
(1)
|
5.8%
|
|||||
FMR
LLC
|
3,740,091
|
(2)
|
10.8%
|
|||||
Topgood
International Limited
|
1,750,000
|
(3)
|
5.1%
|
|||||
Directors and Executive
Officers:
|
||||||||
Ming
Yang
|
10,879,254
|
(4)
|
31.5%
|
|||||
Min
Li
|
25,000
|
(5)
|
*
|
|||||
Naihui
Miao
|
25,000
|
(6)
|
*
|
|||||
Richard
Khaleel
|
37,500
|
(7)
|
*
|
|||||
Biagio
Vignolo
|
37,500
|
(8)
|
*
|
|||||
Shi
Tong Jiang
|
12,500
|
(9)
|
*
|
|||||
Xiaobin
Liu
|
25,000
|
(10)
|
*
|
|||||
Ya
Fei Ji
|
25,000
|
(11)
|
*
|
|||||
All
directors and executive officers as a group
|
11,066,754
|
(4)(5)(6)(7)
(8)(9)(10)(11)
|
31.9%
|
(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
|
·
|
the
name of the Selling Stockholders,
|
·
|
the
number of shares of our Common Stock that the Selling Stockholders
beneficially owned prior to the offering for resale of the shares under
this prospectus,
|
·
|
the
maximum number of shares of our Common Stock that may be offered for
resale for the account of the Selling Stockholders under this prospectus,
and
|
·
|
the
number and percentage of shares of our Common Stock to be beneficially
owned by the Selling Stockholders after the offering of the shares
(assuming all of the offered shares are sold by the Selling
Stockholders).
|
Name
of Selling Stockholder
|
Shares
of Common Stock
Beneficially
Owned Prior to Offering (1)
|
Percentage
Ownership Prior to Offering
|
Maximum
Number
of Shares of Common Stock to be Sold (2)
|
Number
of
Shares
of Common Stock
Owned
After
Offering
|
Percentage
Ownership
After
Offering
|
Common Stock
|
|||||
Alder
Capital Partners I, L.P. (3)
|
88,236
|
*
|
88,236
|
-0-
|
-0-
|
Ancora
Greater China Fund, LP (4)
|
62,794
|
*
|
35,294
|
27,500
|
*
|
Guerrilla
Partners, LP (5)
|
39,050
|
*
|
30,000
|
9,050
|
*
|
Hua-Mei
21st Century Partners, LP (5)
|
79,050
|
*
|
70,000
|
9,050
|
*
|
Jayhawk
Private Equity Fund II, LP (6)
|
70,588
|
*
|
70,588
|
-0-
|
-0-
|
Fidelity
Advisor Series I: Fidelity Advisor Dividend Growth Fund
(7)
|
262,166
|
*
|
200,630
|
61,536
|
*
|
Fidelity
Securities Fund: Fidelity Dividend Growth Fund (7)
|
2,476,640
|
7.17%
|
1,894,460
|
582,180
|
1.69%
|
Fidelity
Advisor Series I: Fidelity Advisor Value Strategies Fund
(7)
|
245,828
|
*
|
180,390
|
65,438
|
*
|
Variable
Insurance Products Fund III: Value Strategies Portfolio
(7)
|
74,573
|
*
|
54,910
|
19,663
|
*
|
Variable
Insurance Products Fund III: Balanced Portfolio (7)
|
337,884
|
*
|
257,850
|
80,034
|
*
|
Straus-GEPT
Partners, L.P. (8)
|
11,765
|
*
|
11,765
|
-0-
|
-0-
|
Straus
Partners, L.P. (8)
|
47,059
|
*
|
47,059
|
-0-
|
-0-
|
Warrant
|
|||||
Brean
Murray, Carret & Co. (9)
|
176,471
|
176,471
|
|||
Total
|
3,972,104
|
3,117,653
|
|
(1)
|
Beneficial
ownership is determined in accordance with the rules and regulations of
the SEC. In computing the number of shares beneficially owned by a person
and the percentage ownership of that person, securities that are currently
convertible or exercisable into shares of our Common Stock, or convertible
or exercisable into shares of our Common Stock within 60 days of the date
hereof are deemed outstanding. Such shares, however, are not deemed
outstanding for the purposes of computing the percentage ownership of any
other person. Except as indicated in the footnotes to the following table,
each stockholder named in the table has sole voting and investment power
with respect to the shares set forth opposite such stockholder’s name. The
percentage of beneficial ownership is based on 34,541,066 shares of Common
Stock outstanding as of January 12,
2010.
|
|
(2)
|
Includes
the number of shares set forth opposite each Selling Stockholders’ name,
and the number of shares that may be issued pursuant to the
Warrant.
|
(3)
|
Michael
Licosati, Managing Partner, has voting and dispositive power over the
shares held by the selling stockholder. Mr.Licosati may be deemed to
beneficially own the shares of Common Stock held by the selling
stockholder. Mr. Licosati disclaims beneficial ownership of such
shares. The address for the selling stockholder is 1223 Camino Del
MarDel Mar, CA 92014.
|
(4)
|
John
P. Micklitsch, CFA, Managing Partner, has voting and dispositive power
over the shares held by the selling stockholder. Mr. Micklitsch may
be deemed to beneficially own the shares of Common Stock held by the
selling stockholder. Mr. Micklitsch disclaims beneficial ownership
of such shares. The address for the selling stockholder is
2000 Auburn Dr. #300 Cleveland, OH
44122.
|
(5)
|
Peter
Siris, Managing Director, and Leigh S. Curry share voting and dispositive
power over the shares held by the selling stockholder. Messrs. Siris
and Curry may be deemed to beneficially own the shares of Common Stock
held by the selling stockholder. Messrs. Siris and Curry disclaim
beneficial ownership of such shares. The address for the
selling stockholder is 237 Park Ave., 9th Fl. New York, NY
10017.
|
(6)
|
Kent
C. McCarthy has voting and dispositive power over the shares held by the
selling stockholder. Mr. McCarthy may be deemed to beneficially own
the shares of Common Stock held by the selling stockholder. Mr.
McCarthy disclaims beneficial ownership of such shares. The address
for the selling stockholder is 930 Tahoe Blvd. 802-281Incline
Village, NV 89451.
|
(7)
|
Fidelity
Management & Research Company ("Fidelity"), 82 Devonshire Street,
Boston, Massachusetts 02109, a wholly-owned subsidiary of FMR LLC and an
investment adviser registered under Section 203 of the Investment Advisers
Act of 1940, is the beneficial owner of 3,397,091 shares of the Common
Stock outstanding of GULF RESOURCES, INC. ("the Company") as a result of
acting as investment adviser to various investment companies registered
under Section 8 of the Investment Company Act of
1940.
|
(8)
|
Melville
Straus, Managing Principal, has voting and dispositive power over the
shares held by the selling stockholder. Mr. Straus may be deemed to
beneficially own the shares of Common Stock held by the selling
stockholder. Mr. Straus disclaims beneficial ownership of such
shares. The address for the selling stockholder is 767 Third Avenue,
New York, NY 10017.
|
(9)
|
Consists
of 176, 471 shares underlying warrants to purchase up to 176,471 shares of
our Common Stock. William J. McCluskey has voting and dispositive
power over the shares held by the selling stockholder. Mr. McCluskey
may be deemed to beneficially own the shares of Common Stock held by the
selling stockholder. Mr. McCluskey disclaims beneficial ownership of
such shares. The address for the selling stockholder is 570 Lexington
Avenue, New York, NY
10022.
|
|
·
|
on
any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of
sale;
|
|
·
|
through
the writing of options, whether such options are listed on an options
exchange or otherwise;
|
|
·
|
block
trades in which the broker-dealer will attempt to sell the shares as agent
but may position and resell a portion of the block as principal to
facilitate the transaction;
|
|
·
|
broker-dealers
may agree with the selling securityholders to sell a specified number of
such shares at a stipulated price per
share;
|
2010
|
High
|
Low
|
||||||
First
Quarter (through January 12)
|
$ | 14.74 | $ | 13.39 |
2009
|
High
|
Low
|
||||||
First
Quarter
|
$ | 0.52 | $ | 0.29 | ||||
Second
Quarter
|
$ | 0.65 | $ | 0.42 | ||||
Third
Quarter
|
$ | 1.75 | $ | 0.49 | ||||
Fourth
Quarter (through October 26)
|
$ | 10.26 | $ | 1.80 | ||||
Fourth
Quarter (from October 27 to December 31)
|
$ | 11.94 | $ | 8.64 |
2008
|
High
|
Low
|
||||||
First
Quarter
|
$ | 3.19 | $ | 1.50 | ||||
Second
Quarter
|
$ | 2.45 | $ | 1.07 | ||||
Third
Quarter
|
$ | 1.90 | $ | 0.33 | ||||
Fourth
Quarter
|
$ | 0.40 | $ | 0.15 |
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
|
0
|
-
|
0
|
Equity
compensation plans not approved by security holders
|
325,000
|
$6.80
|
2,175,000
|
Total
|
325,000
|
-
|
2,175,000
|
PAGE
|
|
Q-1
|
|
Consolidated
Statement of Operations for the Three and Nine Months ended September 30,
2009 and 2008
|
Q-2
|
Consolidated
Statement of Comprehensive Income for the Three and Nine Months ended
September 30, 2009 and 2008.
|
Q-3
|
Consolidated
Statement of Stockholders’ Equity for the Nine Months ended September 30,
2009
|
Q-4
|
Consolidated
Statements of Cash Flows for the Nine Months ended September 3, 2009 and
2008
|
Q-5
- Q-6
|
Reports
of Independent Registered Public Accounting Firm
|
F-1 -
F-3
|
|
|
Consolidated
Balance Sheets for the Years as at December 31, 2008 and
2007
|
F-4
|
F-5
|
|
F-6
|
|
|
|
F-7
|
|
|
|
F-8
- F-9
|
|
|
|
Notes
to Consolidated Financial Statements
|
F-10 -
F-29
|
SEC
Registration Fee
|
$
|
2,856.41
|
||
Legal
Fees and Expenses
|
35,000
|
|||
Accounting
Fees and Expenses *
|
||||
Miscellaneous
*
|
|
|||
Total
|
$
|
39,856.41
|
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.
|
Exhibit
No.
|
Description
|
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.
|
5.1+
|
Opinion
of Loeb & Loeb LLP.
|
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,
incorporated herein by reference to Exhibit 10.8 to the Registrant’ annual
report on Form 10-K filed on March 16, 2009.
|
10.9
|
Agreement
by and between the Registrant and Richard Khaleel, dated October 24, 2007,
incorporated herein by reference to Exhibit 10.9 to the Registrant’ annual
report on Form 10-K filed on March 16, 2009.
|
10.10
|
Employment
Contract by and between the Registrant and Xiaobin Liu, incorporated
herein by reference to Exhibit 10.10 to the Registrant's current report on
Form 8-K filed on March 16, 2009.
|
Exhibit
No.
|
Description
|
10.11
|
Employment
Contract by and between the Registrant and Jiang Shitong, dated April 1,
2008, incorporated herein by reference to Exhibit 10.11 to the Registrant’
annual report on Form 10-K filed on March 16, 2009.
|
10.12
|
Lock-up
Agreement by and among the Registrant, Top King Group Limited, Billion
Gold Group Limited, Topgood International Limited, Ming Yang, Wenxiang Yu,
Zhi Yang and Shandong Haoyuan Industry Group Ltd., dated May
10, 2009, incorporated herein by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K filed on May 14,
2009.
|
10.13
|
Asset
Purchase Agreement by and among the Registrant, Shouguang City Haoyuan
Chemical Company Limited, Fengxia Yuan, Han Wang and Qing Yang, dated
September 7, 2009, incorporated herein by reference to Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K filed on September 10,
2009.
|
10.14
|
Securities
Purchase Agreement by and among the Registrant and institutional investors
dated December 11, 2009, incorporated herein by reference to Exhibit 10.1
to the Registrant’s Current Report on Form 8-K filed on December 11,
2009.
|
10.15
|
Registration
Rights Agreement by and among the Registrant and institutional investors
dated December 11, 2009, incorporated herein by reference to Exhibit 10.1
to the Registrant’s Current Report on Form 8-K filed on December 11,
2009.
|
14
|
Code
of Ethics, incorporated herein by reference to Exhibit 14 to the
Registrant’ annual report on Form 10-K filed on March 16,
2009.
|
21.1
|
List
of Subsidiaries, incorporated herein by reference to Exhibit 21.1 to the
Registrant’s Annual Report on Form 10-K filed on March 12,
2008.
|
23.1+
|
Consent
of Morison & Cogen LLP, an independent registered accounting
firm.
|
23.2+
|
Consent
of Loeb & Loeb LLP (included in its opinion filed as Exhibit
5.1).
|
24.1+
|
Power
of Attorney (contained in the signature page to this registration
statement).
|
GULF
RESOURCES, INC.
|
||
By:
|
/s/
Xiaobin Liu
|
|
Name:
|
Xiaobin
Liu
|
|
Title:
|
Chief
Executive Officer (Principal Executive Officer)
|
|
By:
|
/s/
Min Li
|
|
Name:
|
Min
Li
|
|
Title:
|
Chief
Financial Officer (Principal Financial and Accounting
Officer)
|
Dated:
January 20, 2010
|
By:
|
/s/
Xiaobin Liu
|
Name:
|
Xiaobin
Liu
|
|
Title:
|
Chief
Executive Officer and Director
(Principal
Executive Officer)
|
|
Dated:
January 20, 2010
|
By:
|
/s/
Min Li
|
Name:
|
Min
Li
|
|
Title:
|
Chief
Financial Officer
(Principal
Financial and Accounting Officer)
|
|
Dated:
January 20, 2010
|
By:
|
/s/
Ming Yang
|
Name:
|
Ming
Yang
|
|
Title:
|
Chairman
and Director
|
|
Dated:
January 20, 2010
|
By:
|
/s/
Naihui Miao
|
Name:
|
Naihui
Miao
|
|
Title:
|
Director
|
|
Dated:
January 20, 2010
|
By:
|
/s/
Richard Khaleel
|
Name:
|
Richard
Khaleel
|
|
Title:
|
Director
|
|
Dated:
January 20, 2010
|
By:
|
/s/
Biagio Vignolo
|
Name:
|
Biagio
Vignolo
|
|
Title:
|
Director
|
|
Dated:
January 20, 2010
|
By:
|
/s/
Shi Tong Jiang
|
Name:
|
Shi
Tong Jiang
|
|
Title:
|
Director
|
|
Dated:
January 20, 2010
|
By:
|
/s/
Ya Fei Ji
|
Name:
|
Ya
Fei Ji
|
|
Title:
|
Director
|
|
September 30,
|
||||||||
2008
|
||||||||
(unaudited)
|
(audited)
|
|||||||
ASSETS
|
|
|
||||||
|
|
|||||||
CURRENT
ASSETS
|
|
|
||||||
Cash
|
$ | 19,256,504 | $ | 30,878,044 | ||||
Accounts
receivable, net of allowance
|
15,431,176 | 11,674,645 | ||||||
Inventories
|
471,469 | 418,259 | ||||||
Prepayment
and deposit
|
362,915 | 229,408 | ||||||
Prepaid
land lease
|
15,849 | 15,849 | ||||||
Deferred
tax asset
|
3,453 | 3,453 | ||||||
Other
receivable
|
2,289 | 2,641 | ||||||
35,543,655 | 43,222,299 | |||||||
PROPERTY,
PLANT AND EQUIPMENT, Net
|
81,136,111 | 45,399,456 | ||||||
|
||||||||
PREPAID
LAND LEASE, Net of current portion
|
725,824 | 737,711 | ||||||
|
||||||||
TOTAL
ASSETS
|
$ | 117,405,590 | $ | 89,359,466 | ||||
|
||||||||
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
|
|||||||
|
||||||||
CURRENT
LIABILITIES
|
|
|||||||
Accounts
payable and accrued expenses
|
$ | 6,653,162 | $ | 4,746,993 | ||||
Loan
Payable
|
- | 4,034,250 | ||||||
Retention
Payable
|
660,150 | - | ||||||
Note
and loan payable – related parties
|
- | 4,650,000 | ||||||
Due
to related party
|
769,090 | 852,068 | ||||||
Taxes
payable
|
5,253,780 | 4,269,442 | ||||||
TOTAL
CURRENT LIABILITIES
|
13,336,182 | 18,552,753 | ||||||
|
||||||||
NON
CURRENT LIABILITIES
|
|
|||||||
Note
payable, net of current portion
|
- | 18,337,493 | ||||||
|
||||||||
TOTAL
LIABILITIES
|
13,336,182 | 36,890,246 | ||||||
|
||||||||
STOCKHOLDERS’
EQUITY
|
|
|||||||
|
||||||||
PREFERED
STOCK ; $0.001 par value; 1,000,000 shares
|
|
|||||||
authorized
none outstanding
|
- | - | ||||||
COMMON
STOCK; $0.0005 par value; 100,000,000 shares
|
|
|
||||||
authorized;
31,599,552 and 24,917,210
|
|
|||||||
issues
and outstanding in 2009 and 2008
|
15,800 | 12,459 | ||||||
|
||||||||
ADDITIONAL
PAID-IN CAPITAL
|
40,743,524 | 13,072,668 | ||||||
|
||||||||
RETAINED
EARNINGS – UNAPPROPRIATED
|
55,649,994 | 31,817,465 | ||||||
|
||||||||
RETAINED
EARNINGS – APPROPRIATED
|
3,223,418 | 3,223,418 | ||||||
|
||||||||
CUMULATIVE
TRANSLATION ADJUSTMENT
|
4,436,672 | 4,343,210 | ||||||
|
||||||||
TOTAL
STOCKHOLDERS’ EQUITY
|
104,069,408 | 52,469,220 | ||||||
|
||||||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 117,405,590 | $ | 89,359,466 |
Three
Months Ended
September
30,
|
Nine
Months Ended
|
|||||||||||||||
2008
|
2009
|
2008
|
||||||||||||||
NET
REVENUE
|
||||||||||||||||
Net
sales
|
$
|
27,667,158
|
$
|
17,554,873
|
$
|
80,891,594
|
$
|
63,354,609
|
||||||||
OPERATING
EXPENSES
|
||||||||||||||||
Cost
of net revenue
|
15,533,613
|
11,388,348
|
45,520,357
|
38,050,971
|
||||||||||||
Research
and development cost
|
125,122
|
122,744
|
375,187
|
389,853
|
||||||||||||
General
and administrative expenses
|
870,554
|
960,747
|
2,966,375
|
2,824,377
|
||||||||||||
16,529,289
|
12,471,839
|
48,861,919
|
41,265,201
|
|||||||||||||
INCOME
FROM OPERATIONS
|
11,137,869
|
5,083,034
|
32,029,675
|
22,089,
408
|
||||||||||||
OTHER
INCOME (EXPENSES)
|
||||||||||||||||
Interest
expense
|
(102)
|
-
|
(27,144)
|
(60,111)
|
||||||||||||
Interest
income
|
19,815
|
26,143
|
65,607
|
70,400
|
||||||||||||
Sundry
income (expense)
|
-
|
779
|
-
|
(3,764)
|
||||||||||||
INCOME
BEFORE INCOME TAXES
|
11,157,582
|
5,109,956
|
32,068,138
|
22,095,933
|
||||||||||||
INCOME
TAXES current
|
2,829,772
|
1,373,055
|
8,235,609
|
5,925,532
|
||||||||||||
NET
INCOME
|
$
|
8,327,810
|
$
|
3,736,901
|
$
|
23,832,529
|
$
|
16,170,401
|
||||||||
EARNINGS
PER SHARE:
|
||||||||||||||||
BASIC
|
$
|
0.27
|
$
|
0.15
|
$
|
0.79
|
$
|
0.65
|
||||||||
DILUTED
|
$
|
0.27
|
$
|
0.15
|
$
|
0.79
|
$
|
0.65
|
||||||||
WEIGHTED
AVERAGE NUMBER OF SHARES:
|
||||||||||||||||
BASIC
|
30,806,546
|
24,917,211
|
30,179,367
|
24,917,211
|
||||||||||||
DILUTED
|
30,806,546
|
24,917,211
|
30,179,367
|
24,919,164
|
Three
Months Ended
September 30, |
Nine
Months Ended
|
|||||||||||||||
2008
|
2009
|
2008
|
||||||||||||||
NET
INCOME
|
$
|
8,327,810
|
$
|
3,736,901
|
$
|
23,832,529
|
$
|
16,170,401
|
||||||||
OTHER
COMPREHENSIVE INCOME
|
||||||||||||||||
Foreign
currency translation adjustment
|
148,833
|
228,921
|
93,462
|
2,341,313
|
||||||||||||
COMPREHENSIVE
INCOME
|
$
|
8,476,643
|
$
|
3,965,822
|
$
|
23,925,991
|
$
|
18,511,714
|
Statutory
|
||||||||||||||||||||||||||||
Additional
|
Common
|
Cumulative
|
||||||||||||||||||||||||||
Number
|
Common
|
Paid-in
|
Reserve
|
Retained
|
Translation
|
|||||||||||||||||||||||
of
Shares
|
Stock
|
Capital
|
Fund
|
Earnings
|
Adjustment
|
Total
|
||||||||||||||||||||||
|
|
|
|
|
|
|
||||||||||||||||||||||
BALANCE
AT
|
99,668,842 | $ | 49,834 | $ | 13,035,293 | $ | 3,223,418 | $ | 31,817,465 | $ | 4,343,210 | $ | 52,469,220 | |||||||||||||||
Retroactive
Restatement due to 1:4 stock split
|
(74,751,631 | ) | (37,375 | ) | 37,375 | - | - | - | - | |||||||||||||||||||
Balance
at December 31, 2008
(restated) |
24,917,211 | 12,459 | 13,072,668 | 3,223,418 | 31,817,465 | 4,343,210 | 52,469,220 | |||||||||||||||||||||
Cumulative
translation
Adjustment
|
- | - | - | - | - | 93,462 | 93,462 | |||||||||||||||||||||
Common
stock issuance for settlement of shareholder’s note
payable
|
5,250,000 | 2,625 | 21,284,868 | - | - | - | 21,287,493 | |||||||||||||||||||||
Common
stock issuance for acquiring assets
|
1,432,341 | 716 | 6,027,872 | - | - | - | 6,028,588 | |||||||||||||||||||||
Issuance
of warrants for consulting expenses
|
- | - | 48,616 | - | - | - | 48,616 | |||||||||||||||||||||
Issuance
of stock options
|
- | - | 309,500 | - | - | - | 309,500 | |||||||||||||||||||||
Net
income for nine months ended September 30, 2009
|
- | - | - | - | 23,832,529 | - | 23,832,529 | |||||||||||||||||||||
BALANCE
AT
|
31,599,552 | 15,800 | 40,743,524 | 3,223,418 | 55,649,994 | 4,436,672 | 104,069,408 |
Nine
Months Ended
|
||||||||
2008
|
||||||||
CASH
FLOWS PROVIDED BY OPERATING ACTIVITIES
|
||||||||
Net
income
|
$
|
23,832,529
|
$
|
16,170,401
|
||||
Adjustments
to reconcile net income to
net cash provided by operating activities
|
||||||||
Amortization
of warrants issued for expenses
|
309,500
|
602,142
|
||||||
Amortization
of prepaid expenses by shares issued for consulting fee
|
48,616
|
145,484
|
||||||
Amortization
and prepaid expense
|
11,943
|
-
|
||||||
Depreciation
and amortization
|
4,816,540
|
3,426,455
|
||||||
Bad
debt provision
|
78,150
|
|||||||
(Increase)
decrease in assets
|
||||||||
Accounts
receivable
|
(3,831,618
|
)
|
(4,426,119
|
)
|
||||
Inventories
|
(53,099
|
)
|
(1,659,098
|
)
|
||||
Prepayment
and deposit
|
(133,215
|
)
|
(713,470
|
)
|
||||
Income
tax receivable
|
-
|
-
|
||||||
Increase
(decrease) in liabilities
|
-
|
|||||||
Accounts
payable and accrued expenses
|
1,874,951
|
3,102,777
|
||||||
Taxes
payable
|
1,004,489
|
969,282
|
||||||
Net
cash provided by operating activities
|
27,958,786
|
17,617,854
|
||||||
CASH
FLOWS USED IN INVESTING ACTIVITIES
|
||||||||
Property,
plant and equipment
|
(33,828,480
|
)
|
(17,365,195
|
)
|
||||
Net
cash used in investing activities
|
(33,828,480
|
)
|
(17,365,195
|
)
|
||||
CASH
FLOWS PROVIDED BY FINANCING ACTIVITIES
|
||||||||
Repayment
to bank loan
|
-
|
(3,843,675
|
)
|
|||||
Proceeds
from loan payable
|
-
|
4,023,250
|
||||||
Repayment
to loan payable
|
(4,031,775
|
)
|
-
|
|||||
Proceeds
from Note and loan payable (related parties)
|
-
|
13,635,405
|
||||||
Repayment
to Note and loan payable (related parties)
|
-
|
(2,670,192
|
)
|
|||||
Proceeds
from related party
|
8,452,194
|
-
|
||||||
Repayment
to related party
|
(10,168,016
|
)
|
-
|
|||||
Net
cash used in provided by financing activities
|
(5,747,597
|
)
|
11,144,788
|
|||||
EFFECTS
OF EXCHANGE RATE CHANGE ON CASH
|
(4,249
|
)
|
703,038
|
|||||
NET
INCREASE (DECREASE) IN CASH
|
(11,621,540
|
)
|
12,100,485
|
|||||
CASH
– BEGINNING OF PERIOD
|
30,878,044
|
10,773,875
|
||||||
CASH
– END OF PERIOD
|
$
|
19,256,504
|
$
|
22,874,360
|
Nine
Months Ended
|
||||||||
2008
|
||||||||
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
Cash
paid during the period for:
|
||||||||
Income
taxes
|
$
|
7,681,162
|
$
|
5,444,244
|
||||
Interest
paid
|
$
|
27,009
|
$
|
126,715
|
||||
SUPPLEMENTAL
DISCLOSURE OF NON-CASH FINANCING ACTIVITIES
|
||||||||
Waiver
of accrued interest to Additional Paid In Capital
|
$
|
-
|
$
|
131,533
|
||||
Issuance
of common stock as payment for shareholders note payable
|
$
|
21,287,493
|
$
|
-
|
||||
Issuance
of common stock for prepaid expenses
|
$
|
-
|
$
|
-
|
||||
Issuance
of common stock for purchase of assets
|
$
|
6,028,588
|
$
|
-
|
||||
Purchase
of property, plant and equipment for retention payable
|
$
|
659,745
|
$
|
Provision
Base
|
Aging
|
Provision
rate
|
The
balance of
|
<120
days
|
0.5%
|
Accounts
receivable
|
121
days – 1 year
|
5%
|
1 –
2 year
|
30%
|
|
2 –
3 year
|
50%
|
|
>3
year
|
100%
|
Useful
life
(in years)
|
|
Mineral
rights
|
Period
of lease or 50 years or the equivalent term under the units of production
method, whichever is shorter
|
Buildings
|
20
|
Machinery
|
8
|
Motor
vehicles
|
5
|
Equipment
|
8
|
(unaudited)
|
(audited)
|
|||||||
Raw
Material
|
$
|
322,374
|
$
|
202,435
|
||||
Finished
Goods
|
162,909
|
229,638
|
||||||
Allowance
for obsolete and slow moving inventory
|
(13,814)
|
(13,814)
|
||||||
|
$
|
471,469
|
$
|
418,259
|
(unaudited)
|
(audited)
|
|||||||
At
cost:
|
||||||||
Mineral
rights
|
$
|
5,840,594
|
5,840,594
|
|||||
Buildings
|
21,218,761
|
6,410,813
|
||||||
Plant
and machinery
|
61,443,813
|
37,619,002
|
||||||
Motor
vehicles
|
57,947
|
57,947
|
||||||
Furniture,
fixtures and office equipment
|
4,277,972
|
2,353,789
|
||||||
Total
|
92,838,820
|
52,282,144
|
||||||
Less:
accumulated depreciation and amortization
|
11,702,975
|
6,882,688
|
||||||
Net
book value
|
$
|
81,136,111
|
45,399,456
|
September
30,
|
|||||||||
2008
|
|||||||||
(unaudited)
|
(audited)
|
||||||||
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. This loan is denominated in RMB (a)
|
$
|
-
|
$
|
18,337,493
|
|||||
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. (a)
|
-
|
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
|
|||||||
Less:
current portion
|
-
|
(4,650,000)
|
|||||||
Long-term
loans, less current portion
|
$
|
-
|
$
|
18,337,493
|
|||||
Future
maturities of notes payable-related parties are as
follows:
|
|
|
|||||||
2009
|
|
$
|
-
|
$
|
-
|
||||
2010
|
-
|
-
|
|||||||
2011
|
|
-
|
18,337,493
|
||||||
Total
|
$
|
-
|
$
|
18,337,493
|
(a)
|
Based
on an amendment agreement dated January 24, 2009, the Company issued
5,250,000 shares of its common stock in lieu of repayment of
the Loans to Shenzhen Huayin Guaranty and Investment Company Limited to
the following companies, which assumed the Loans from Shenzhen Hua Yin,
and in the following amounts: Top King, 1,500,000 million shares of common
stock; Billion Gold, 2,000,000 shares of common stock; Topgood, 1,750,000
shares of common stock. Upon the issuance of the shares, the Loans were
deemed paid in full and were
cancelled.
|
Due
to related parties consists of the following:
|
||||||||
(unaudited)
|
(audited)
|
|||||||
Due
to related company - Jiaxing Lighting
|
867,900
|
852,068
|
||||||
Due
from related company – Haoyuan Group
|
(98,810)
|
-
|
||||||
$
|
769,090
|
$
|
852,068
|
Taxes
payable consists of the following:
|
||||||||
(unaudited)
|
(audited)
|
|||||||
Income
tax payable
|
$
|
2,881,664
|
$
|
2,329,227
|
||||
Mineral
resource compensation fee payable
|
327,157
|
291,861
|
||||||
Value
added tax payable and others
|
2,044,959
|
1,648,354
|
||||||
Total
|
$
|
5,253,780
|
$
|
4,269,442
|
Option
&Warrants
Outstanding
|
Option
&Warrants
Vested
|
Range
of
Exercise
Price per Common Share
|
||||||||||
Balance,
December 31, 2008
|
325,000
|
112,500
|
|
$0.84
- $9.80
|
||||||||
Granted
or vested during nine months ended September 30, 2009
|
187,500
|
233,333
|
$4.80
|
|||||||||
Expired
during nine months ended September 30, 2009
|
||||||||||||
Forfeited
during nine months ended September 30, 2009
|
(250,000)
|
(83,333)
|
|
$9.80
|
||||||||
Balance,
September 30, 2009
|
262,500
|
262,500
|
|
$0.84
- $8.20
|
Stock
and Warrants Options Outstanding
|
||||||
Number
Outstanding
|
Weighted
Average
|
Weighted
Average
|
||||
Range
of
|
Currently
Exercisable
|
Remaining
|
Exercise
Price of Options
|
|||
Exercise
Prices
|
Contractual
Life (Years)
|
Currently
Exercisable
|
||||
$0.84-$8.20
|
262,500
|
6.57
|
$ 7.07
|
Three
Months Ended
|
||||||||||||||||||||
(unaudited)
|
Bromine
and
Crude
Salt
|
Chemical
Products
|
Segment
Total
|
Corporate
|
Consolidated
Total
|
|||||||||||||||
Net
sales
|
$
|
18,814,932
|
8,852,226
|
27,667,158
|
-
|
27,667,158
|
||||||||||||||
Income
(loss) from operations
|
8,245,278
|
3,053,245
|
11,298,523
|
(160,654
|
)
|
11,137,869
|
||||||||||||||
Total
assets
|
91,479,066
|
25,776,330
|
117,255,396
|
150,194
|
117,405,590
|
|||||||||||||||
Depreciation
and amortization
|
1,502,376
|
287,284
|
1,789,660
|
-
|
1,789,660
|
|||||||||||||||
Capital
expenditures
|
12,227,274
|
2,638,980
|
14,866,254
|
-
|
14,866,254
|
Three
Months Ended
|
||||||||||||||||||||
(unaudited)
|
Bromine
and
Crude
Salt
|
Chemical
Products
|
Segment
Total
|
Corporate
|
Consolidated
Total
|
|||||||||||||||
Net
sales
|
$
|
13,106,804
|
4,448,069
|
17,554,873
|
-
|
17,554,873
|
||||||||||||||
Income
(loss) from operations
|
4,086,664
|
1,378,530
|
5,465,194
|
(382,160
|
)
|
5,083,034
|
||||||||||||||
Total
assets
|
63,513,465
|
17,961,014
|
81,474,479
|
75,507
|
81,549,986
|
|||||||||||||||
|
|
|
||||||||||||||||||
Depreciation
and amortization
|
1,068,738
|
221,664
|
1,290,402
|
-
|
1,290,402
|
|||||||||||||||
Capital
expenditures
|
519,977
|
-
|
519,977
|
-
|
519,977
|
Nine
Months Ended
|
||||||||||||||||||||
(unaudited)
|
Bromine
and
Crude
Salt
|
Chemical
Products
|
Segment
Total
|
Corporate
|
Consolidated
Total
|
|||||||||||||||
Net
sales
|
$
|
54,874,656
|
26,016,938
|
80,891,594
|
-
|
80,891,594
|
||||||||||||||
Income
(loss) from operations
|
23,986,058
|
8,879,769
|
32,865,827
|
(836,152
|
)
|
32,029,675
|
||||||||||||||
Total
assets
|
91,479,066
|
25,776,330
|
117,255,396
|
150,194
|
117,405,590
|
|||||||||||||||
Depreciation
and amortization
|
4,085,235
|
731,305
|
4,816,540
|
-
|
4,816,540
|
|||||||||||||||
Capital
expenditures
|
27,890,325
|
5,938,155
|
33,828,480
|
-
|
33,828,480
|
Nine
Months Ended
|
||||||||||||||||||||
(unaudited)
|
Bromine
and
Crude
Salt
|
Chemical
Products
|
Segment
Total
|
Corporate
|
Consolidated
Total
|
|||||||||||||||
Net
sales
|
$
|
47,627,468
|
15,727,141
|
63,354,609
|
-
|
63,354,609
|
||||||||||||||
Income
(loss) from operations
|
18,427,749
|
5,252,071
|
23,679,820
|
(1,590,412
|
)
|
22,089,408
|
||||||||||||||
Total
assets
|
63,513,465
|
17,961,014
|
81,474,479
|
75,507
|
81,549,986
|
|||||||||||||||
Depreciation
and amortization
|
3,043,928
|
382,527
|
3,426,455
|
-
|
3,426,455
|
|||||||||||||||
Capital
expenditures
|
10,529,286
|
6,835,909
|
17,365,195
|
-
|
17,365,195
|
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
Reconciliations
|
2009
|
2008
|
2009
|
2008
|
||||||||||||
Total
segment operating income
|
$
|
11,298,523
|
$
|
5,465,194
|
$
|
32,865,828
|
$
|
23,679,820
|
||||||||
Corporate
overhead expenses
|
(160,654
|
)
|
(382,160
|
)
|
(836,152
|
)
|
(1,590,412
|
)
|
||||||||
Other
income (expense)
|
19,713
|
26,922
|
38,462
|
6,525
|
||||||||||||
Income
tax expense
|
(2,829,772
|
)
|
(1,373,055
|
)
|
(8,235,609
|
)
|
(5,925,532
|
)
|
||||||||
Total
consolidated net income
|
$
|
8,327,810
|
$
|
3,736,901
|
$
|
23,832,529
|
$
|
16,170,401
|
(unaudited)
|
(audited)
|
|||||||
Shenzhen
Huayin Guaranty and Investment Company Limited Waiver of accrued interest
during first quarter 2008
|
$
|
-
|
$
|
131,533
|
||||
Note
and loan payable – First Capital Limited (Note 7)
|
$
|
-
|
1,650,000
|
|||||
Shenzhen
Huayin Guaranty and Investment Company Limited (Note 7)
|
$
|
-
|
$
|
21,337,493
|
||||
Due
to related party:
|
||||||||
Jiaxing
Lighting (Note 8)
|
$
|
867,900
|
$
|
852,068
|
||||
Haoyuan
Group (Note 8)
|
$
|
(98,810)
|
$
|
-
|
|
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.
|
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,
|
|||||||||||
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,
|
||||||||||||
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
|
||||||||||||||||||||||||||||||||
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,
|
||||||||||||
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,
|
||||||||||||
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,
|
||||||||
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,
|
||||||||
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,
|
||||||||
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,
|
|||||||||
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,
|
||||||||
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,
|
||||||||
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
|
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
|
|||||||||||||||||
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 | |||||||||||||||
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 | |||||||||||||||
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 |
(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
|
This ‘S-1’ Filing | Date | Other Filings | ||
---|---|---|---|---|
12/19/14 | ||||
12/18/14 | ||||
6/14/12 | ||||
4/20/10 | ||||
3/21/10 | ||||
Filed on: | 1/20/10 | |||
1/15/10 | ||||
1/13/10 | ||||
1/12/10 | ||||
12/31/09 | 10-K | |||
12/21/09 | 8-K | |||
12/19/09 | ||||
12/11/09 | 8-K | |||
11/9/09 | 10-Q | |||
10/27/09 | 8-K | |||
10/9/09 | ||||
10/6/09 | ||||
9/30/09 | 10-Q, 8-K, 8-K/A | |||
9/10/09 | 8-K | |||
9/7/09 | 8-K, 8-K/A | |||
9/3/09 | ||||
8/1/09 | ||||
7/29/09 | ||||
7/10/09 | 8-K | |||
6/30/09 | 10-Q | |||
6/22/09 | 8-K | |||
6/15/09 | 8-K | |||
6/13/09 | 8-K | |||
5/14/09 | 8-K | |||
5/10/09 | 8-K | |||
3/31/09 | 10-Q | |||
3/16/09 | 10-K, 8-K | |||
3/13/09 | ||||
3/12/09 | ||||
3/10/09 | 3, 4, 8-K | |||
3/9/09 | ||||
3/3/09 | ||||
2/6/09 | 8-K | |||
1/30/09 | 8-K | |||
1/24/09 | 8-K, 8-K/A | |||
1/7/09 | 8-K | |||
1/1/09 | ||||
12/31/08 | 10-K | |||
12/15/08 | ||||
11/15/08 | ||||
9/30/08 | 10-Q | |||
9/15/08 | ||||
9/3/08 | ||||
8/31/08 | ||||
8/1/08 | ||||
4/23/08 | 8-K | |||
4/1/08 | ||||
3/31/08 | 10-Q | |||
3/30/08 | ||||
3/19/08 | ||||
3/18/08 | ||||
3/12/08 | 10-K | |||
3/6/08 | 8-K | |||
2/5/08 | ||||
1/8/08 | 8-K | |||
1/1/08 | ||||
12/31/07 | 10-K, 10-K/A | |||
12/4/07 | 8-K | |||
11/28/07 | 8-K | |||
11/15/07 | ||||
11/11/07 | ||||
11/6/07 | 3, DEF 14C | |||
10/31/07 | 8-K | |||
10/30/07 | 3, 8-K | |||
10/26/07 | ||||
10/25/07 | 8-K | |||
10/24/07 | PRE 14C | |||
10/19/07 | PRE 14C | |||
9/6/07 | 8-K | |||
7/28/07 | ||||
7/20/07 | ||||
7/8/07 | ||||
6/11/07 | 8-K | |||
6/8/07 | 8-K | |||
5/7/07 | 8-K | |||
4/10/07 | 8-K | |||
4/7/07 | ||||
4/4/07 | 8-K | |||
3/20/07 | ||||
2/20/07 | 8-K | |||
2/9/07 | 8-K | |||
2/5/07 | 3, 4, 8-K | |||
1/31/07 | ||||
1/1/07 | ||||
12/31/06 | 10KSB | |||
12/15/06 | ||||
12/12/06 | 8-K | |||
12/11/06 | 3 | |||
12/10/06 | 8-K | |||
10/23/06 | ||||
10/16/06 | 10QSB/A | |||
10/9/06 | ||||
8/31/06 | 10QSB, 10QSB/A, 8-K, SC 14F1 | |||
8/25/06 | 3, 8-K | |||
7/28/06 | ||||
3/15/06 | ||||
2/13/06 | ||||
1/1/06 | ||||
12/31/05 | 10KSB | |||
5/18/05 | ||||
10/30/00 | ||||
10/16/98 | DEF 14A | |||
4/1/98 | ||||
8/12/97 | DEF 14A | |||
6/25/97 | SB-2 | |||
11/18/92 | ||||
List all Filings |