We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Bodisen | LSE:BODI | London | Ordinary Share | COM STK USD0.0001 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 6.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
Hot Features
Premium
TIDMBODI
RNS Number : 1329R
Bodisen Biotech Inc
16 August 2010
16 August 2010
Bodisen Biotech, Inc.
Results for the six month period ended 30 June 2010
Review & Extracts of the Form10-Q as required by the Securities & Exchange
Commission
Bodisen Biotech, Inc. (the "Company") (OTC Pink Sheets: BBCZ; London AIM: BODI;
website: www.bodisen.com) recently announced its six months unaudited results
for the period ended 30 June 2010, which are extracted from the Company's Form
10-Q filed with the SEC.
Result of Operations
Three Months Ended June 30, 2010 as Compared to Three Months Ended June 30, 2009
Revenue. We generated revenue of $2,902,929 for the three months ended June 30,
2010, an increase of $1,832,436 or 171%, compared to $1,070,493 for the three
months ended June 30, 2009. The increase in revenue is primarily attributable to
the overall recovery of the economic environment and the launch of new products
during the quarter.
Gross Profit. We achieved a gross profit of $1,048,213 for the three months
ended June 30, 2010, an increase of $871,151 or 492%, compared to $177,062 for
the three months ended June 30, 2009. Gross margin (gross profit as a percentage
of revenues), was 36% for the three months ended June 30, 2010, compared to 17%
for the three months ended June 30, 2009. The increase in the gross margin
percentage was primarily attributable to the higher profit margins which are
earned on the new products.
Aggregated selling expenses accounted for $204,772 of our operating expenses for
the three months ended June 30, 2010, an increase of $189,900 or 1,277%,
compared to $14,872 for the three months ended June 30, 2009. The increase in
our aggregated selling expenses is primarily attributable to an increase in
marketing promotion and advertising programs.
General and administrative expenses accounted for $1,097,655 of our operating
expenses for the three months ended June 30, 2010, an increase of $2,108,553 or
209%, compared to income of $1,010,898 for the three months ended June 30, 2009.
The increase in general and administrative expenses is primarily attributable to
a decrease in bad debt recoveries in 2010 compared to 2009. During the three
months ended June 30, 2009 the Company recorded a bad debt recovery of $888,737
compared to a charge to bad debt of $562,525 for the three months ended June 30,
2010.
Non Operating Income and Expenses. We had total non-operating expenses of
$34,972 for the three months ended June 30, 2010, a decrease of $383,164
compared to expense of $418,136 for the three months ended June 30, 2009. Other
income (expense) was $(19,227) for the three months ended June 30, 2010 compared
to $(484,081) for the three months ended June 30, 2009. Also included in
non-operating income (expense) for the three months ended June 30, 2009 is a
loss $81,363 related to a loss on the sale of investment and a gain of $147,259
related to equity income of an investment that we account for under the equity
method. During the three months ended June 30, 2010, we did not incur any gains
or losses related to the sale on investment or equity income in investment.
Six Months Ended June 30, 2010 as Compared to Six Months Ended June 30, 2009
Revenue. We generated revenue of $3,934,238 for the six months ended June 30,
2010, an increase of $1,328,710 or 51%, compared to $2,605,528 for the six
months ended June 30, 2009. The increase in revenue is primarily attributable to
the overall recovery of the economic environment and the launch of new products
in May 2010.
Gross Profit. We achieved a gross profit of $1,269,639 for the six months ended
June 30, 2010, an increase of $880,826 or 227%, compared to $388,813 for the six
months ended June 30, 2009. Gross margin (gross profit as a percentage of
revenues), was 32% for the six months ended June 30, 2010, compared to 15% for
the six months ended June 30, 2009. The increase in the gross margin percentage
was primarily attributable to the higher profit margins which are earned on the
new products.
Aggregated selling expenses accounted for $346,186 of our operating expenses for
the six months ended June 30, 2010, an increase of $319,068 or 1,177%, compared
to $27,118 for the six months ended June 30, 2009. The increase in our
aggregated selling expenses is primarily attributable to an increase in
marketing promotion and advertising programs.
General and administrative expenses accounted for $1,518,737 of our operating
expenses for the six months ended June 30, 2010, an increase of $2,377,153 or
277%, compared to income of $858,416 for the six months ended June 30, 2009. The
increase in general and administrative expenses is primarily attributable to a
decrease in bad debt recoveries in 2010 compared to 2009. During the six months
ended June 30, 2009 the Company recorded a bad debt recovery of $1,372,251
compared to a charge to bad debts of $531,020 for the six months ended June 30,
2010.
Non Operating Income and Expenses. We had total non-operating expense of $33,078
for the six months ended June 30, 2010, a decrease of $127,252 compared to
income of $94,174 for the six months ended June 30, 2009. Other income (expense)
was $(19,841) for the six months ended June 30, 2010 compared to $(1,284) for
the six months ended June 30, 2009. Also included in non-operating income
(expense) for the six months ended June 30, 2009 is a loss of $211,610 related
to a loss on the sale of investment and a gain of $306,902 related to equity
income of an investment that we account for under the equity method. During the
six months ended June 30, 2010, we did not incur any gains or losses related to
the sale on investment or equity income in investment.
Liquidity and Capital Resources
We are primarily a parent holding company for the operations carried out by our
indirect operating subsidiary, Yang Ling, which carries out its activities in
the People's Republic of China. Because of our holding company structure, our
ability to meet our cash requirements apart from our financing activities,
including payment of dividends on our common stock, if any, substantially
depends upon the receipt of dividends from our subsidiaries, particularly Yang
Ling.
On March 19, 2010, we obtained a bank loan for 10,000,000 RMB (approximately
$1,437,000). The loan has an 8.1% annual interest rate, matures on March
19, 2010 and is secured by our land and production facility.
As of June 30, 2010, we had $4, 869,341 of cash and cash equivalents compared to
$4,824,135 as of December 31, 2009.
Cash Flows
Operating. We used $1,461,401 of cash for operating activities for the six
months ended June 30, 2010 compared to $721,762 for the six months ended June
30, 2009.
Investing. Our investing activities used $3,268 of cash for the six months ended
June 30, 2010, compared to $720,371 of cash provided by investing activities for
the six months ended June 30, 2009. The decrease is primarily attributable to
the proceeds from the sale of investment in 2009 of $735,656 for which there
were no sales in 2010.
Financing. Our financing activities provided $1,466,900 of cash from a long term
bank financing for the six months ended June 30, 2010 compared to no cash
provided by financing activities for the six months ended June 30, 2009.
Contractual Commitments
In August 2006, we entered into a 30-year land-lease arrangement with the
government of the People's Republic of China, under which we pre-paid $2,529,818
upon execution of the contract of lease expense for the next 15 years. We agreed
to make a prepayment for the next eight years in November 2021, and will make a
final pre-payment in November 2029 for the remaining seven years. The annual
lease expense amounts to approximately $169,580. Our land-lease arrangement is
currently our only material on- and off-balance sheet expected or contractually
committed future obligation.
Off-Balance Sheet Arrangements
We currently do not have any material off-balance sheet arrangements except for
the remaining pre-payments under the land-lease arrangement described above.
About Bodisen Biotech, Inc.
Bodisen Biotech, Inc. is a manufacturer of liquid and organic compound
fertilizers, pesticides, insecticides and agricultural raw material certified by
the Petroleum Chemical Industry Administrative office of China (Chemical
Petroleum Production Administrative Bureau), Shaanxi provincial government and
Chinese government. The company is headquartered in Shaanxi province and is a
Delaware corporation. The company files annual and periodic reports with the
U.S. Securities and Exchange Commission, which are accessible at www.sec.gov.
Safe Harbor Statement
This press release may contain forward-looking statements within the meaning of
the "safe harbor" provisions of the Private Securities Litigation Reform Act of
1995. These statements are based on the current expectations or beliefs of
Bodisen Biotech, Inc. management and are subject to a number of factors and
uncertainties that could cause actual results to differ materially from those
described in the forward-looking statements.
Enquiries:
Bodisen Biotech, Inc.
Bo Chen 0086 29 8707
4957
Charles Stanley Securities
(Nominated Adviser)
Russell Cook / Carl Holmes 020 7149 6000
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) FOR
THE THREE AND SIX MONTH PERIODS ENDED JUNE 30, 2010 AND 2009 (UNAUDITED)
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | Three Month | Six Month Periods |
| | Periods Ended | Ended |
| | June 30 | June 30 |
+------------------------------+-----------------------------------------+-----------------------------------------+
| | 2010 | 2009 | 2010 | 2009 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | $ | $ | $ | $ |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Net revenue | 2,902,929 | 1,070,493 | 3,934,238 | 2,605,528 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Cost of revenue | 1,854,716 | 893,431 | 2,664,599 | 2,216,715 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | ------------------ | ------------------ | ------------------ | ------------------ |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Gross profit | 1,048,213 | 177,062 | 1,269,639 | 388,813 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Operating expenses: | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Selling expenses | 204,772 | 14,872 | 346,186 | 27,118 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| General and administrative | 1,097,655 | (1,010,898) | 1,518,737 | (858,416) |
| expenses | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Write down of assets | - | 92,340 | - | 104,254 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | ------------------ | ------------------ | ------------------ | ------------------ |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Total operating expenses | 1,302,427 | (903,686) | 1,864,923 | (727,044) |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | ------------------ | ------------------ | ------------------ | ------------------ |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Loss from operations | (254,214) | 1,080,748 | (595,284) | 1,115,857 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | | | | |
| Non-operating Income | | | | |
| (expense): | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Other income (expense) | (19,227) | (484,081) | (19,841) | (1,284) |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Interest income | 4,718 | 122 | 7,886 | 314 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Interest expense | (20,463) | (73) | (21,123) | (148) |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Loss on the sale of | - | (81,363) | - | (211,610) |
| investment | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Equity income in investment | - | 147,259 | - | 306,902 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | ------------------ | ------------------ | ------------------ | ------------------ |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Total non-operating income | (34,972) | (418,136) | (33,078) | 94,174 |
| (expense) | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | ------------------ | ------------------ | ------------------ | ------------------ |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Income (loss) before | (289,186) | 662,612 | (628,362) | 1,210,031 |
| provision for income taxes | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Provision (benefit) for | - | - | - | - |
| income taxes | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | ------------------ | ------------------ | ------------------ | ------------------ |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Net income (loss) | (289,186) | 662,612 | (628,362) | 1,210,031 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Other comprehensive income | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Foreign currency translation | 168,197 | (558) | 168,118 | (54,908) |
| gain (loss) | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Unrealised gain (loss) on | 2,240,634 | | 1,110,224 | 4,891,130 |
| marketable equity security | | 5,613,449 | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | ------------------ | ------------------ | ------------------ | ------------------ |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Comprehensive Income (loss) | 2,119,645 | 6,275,503 | 649,980 | 6,046,253 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | ========== | ========== | ========== | ========== |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Weighted average shares | | | | |
| outstanding: | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Basic | 18,710,250 | 18,710,250 | 18,710,250 | 18,710,250 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | ========== | ========== | ========== | ========== |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Diluted | 18,710,250 | 18,710,250 | 18,710,250 | 18,710,250 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | ========== | ========== | ========== | ========== |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Earnings per share: | | | | |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Basic | (0.02) | 0.04 | (0.03) | 0.06 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | ========== | ========== | ========== | ========== |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| Diluted | (0.02) | 0.04 | (0.03) | 0.06 |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
| | ========== | ========== | ========== | ========== |
+------------------------------+--------------------+--------------------+--------------------+--------------------+
CONSOLIDATED BALANCE SHEET
June 30, 2009
+--------------------------------+---------------------------+---------------------------+
| | June 30, | June 30, |
| | 2010 | 2009* |
+--------------------------------+---------------------------+---------------------------+
| | $ | $ |
+--------------------------------+---------------------------+---------------------------+
| ASSETS | | |
+--------------------------------+---------------------------+---------------------------+
| | | |
+--------------------------------+---------------------------+---------------------------+
| CURRENT ASSETS: | | |
+--------------------------------+---------------------------+---------------------------+
| Cash & cash equivalents | 4,869,341 | 84,112 |
+--------------------------------+---------------------------+---------------------------+
| Accounts receivable, net of | | |
| allowance for doubtful | | |
| accounts of $3,296,095 and | 3,836,753 | 3,247,194 |
| $2,751,613 | | |
+--------------------------------+---------------------------+---------------------------+
| Other receivables | 38,978 | 407,454 |
+--------------------------------+---------------------------+---------------------------+
| Inventory, net | 2,500,048 | 1,907,000 |
+--------------------------------+---------------------------+---------------------------+
| Advances to suppliers | 1,058,441 | 398,977 |
+--------------------------------+---------------------------+---------------------------+
| Prepaid expense and other | 746,426 | 739,601 |
| current assets | | |
+--------------------------------+---------------------------+---------------------------+
| | ------------------------- | ------------------------- |
+--------------------------------+---------------------------+---------------------------+
| Total current assets | 13,049,987 | 6,784,338 |
+--------------------------------+---------------------------+---------------------------+
| | | |
+--------------------------------+---------------------------+---------------------------+
| PROPERTY & EQUIPMENT, net | 11,495,948 | 12,212,016 |
+--------------------------------+---------------------------+---------------------------+
| | | |
+--------------------------------+---------------------------+---------------------------+
| CONSTRUCTION IN PROGRESS | 10,465,269 | 10,394,027 |
+--------------------------------+---------------------------+---------------------------+
| | | |
+--------------------------------+---------------------------+---------------------------+
| MARKETABLE SECURITY, | 9,285,514 | 11,082,434 |
| AVAILABLE-FOR-SALE | | |
+--------------------------------+---------------------------+---------------------------+
| | | |
+--------------------------------+---------------------------+---------------------------+
| INTANGIBLE ASSETS, net | 4,783,824 | 4,976,701 |
+--------------------------------+---------------------------+---------------------------+
| | | |
+--------------------------------+---------------------------+---------------------------+
| OTHER ASSETS | - | 2,648,199 |
+--------------------------------+---------------------------+---------------------------+
| | | |
+--------------------------------+---------------------------+---------------------------+
| | ------------------------- | ------------------------- |
+--------------------------------+---------------------------+---------------------------+
| TOTAL ASSETS | 49,080,542 | 48,097,715 |
+--------------------------------+---------------------------+---------------------------+
| | ============== | ============== |
+--------------------------------+---------------------------+---------------------------+
| | | |
+--------------------------------+---------------------------+---------------------------+
| LIABILITIES AND STOCKHOLDERS' | | |
| EQUITY | | |
+--------------------------------+---------------------------+---------------------------+
| | | |
+--------------------------------+---------------------------+---------------------------+
| CURRENT LIABILITIES: | | |
+--------------------------------+---------------------------+---------------------------+
| Accounts payable | 2,545,145 | 294,679 |
+--------------------------------+---------------------------+---------------------------+
| Accrued expenses | 195,042 | 82,042 |
+--------------------------------+---------------------------+---------------------------+
| | ------------------------- | ------------------------- |
+--------------------------------+---------------------------+---------------------------+
| Total current liabilities | 2,740,187 | 376,721 |
+--------------------------------+---------------------------+---------------------------+
| | | |
| Long-term note payable | 1,473,000 | |
| | | |
+--------------------------------+---------------------------+---------------------------+
| TOTAL LIABILITIES | 4,213,187 | 376,721 |
| | | |
| STOCKHOLDERS' EQUITY | | |
+--------------------------------+---------------------------+---------------------------+
| Preferred stock, $0.0001 per | | |
| share; authorised 5,000,000 | | |
| shares; nil issued and | | |
| outstanding | | |
+--------------------------------+---------------------------+---------------------------+
| Common stock, $0.0001 per | | |
| share; authorised 30,000,000 | | |
| shares; issued and outstanding | 1,871 | 1,871 |
| 18,710,250 and 18, 710,250 | | |
| shares | | |
+--------------------------------+---------------------------+---------------------------+
| Additional paid in capital | 33,945,822 | 33,945,822 |
+--------------------------------+---------------------------+---------------------------+
| Other comprehensive income | 14,751,649 | 16,277,184 |
+--------------------------------+---------------------------+---------------------------+
| Statutory reserve | 4,314,488 | 4,314,488 |
+--------------------------------+---------------------------+---------------------------+
| Retained earnings | (8,146,475) | (6,818,371) |
+--------------------------------+---------------------------+---------------------------+
| | ------------------------- | ------------------------- |
+--------------------------------+---------------------------+---------------------------+
| Total stockholders' equity | 44,867,355 | 47,720,994 |
+--------------------------------+---------------------------+---------------------------+
| | | |
+--------------------------------+---------------------------+---------------------------+
| TOTAL LIABILITIES AND | | |
| STOCKHOLDERS' EQUITY | 49,080,542 | 48,097,715 |
+--------------------------------+---------------------------+---------------------------+
| | ============== | ============== |
+--------------------------------+---------------------------+---------------------------+
* The 2009 balance sheet figures are taken from the SEC 10-Q for the quarterly
period ended 30 June 2009.
CONSOLIDATED STATEMENT OF CASH FLOWS
For the six months ended June 30, 2010 and 2009
+---------------------------------------+------------------------+------------------------+
| | Six Month Periods |
| | Ended |
| | June 30, |
+---------------------------------------+-------------------------------------------------+
| | 2010 | 2009 |
+---------------------------------------+------------------------+------------------------+
| | $ | $ |
+---------------------------------------+------------------------+------------------------+
| CASH FLOWS FROM OPERATING ACTIVITIES: | | |
+---------------------------------------+------------------------+------------------------+
| Net Income (loss) | (628,362) | 1,210,031 |
+---------------------------------------+------------------------+------------------------+
| Adjustments to reconcile net income | | |
| to net cash used in operating | | |
| activities: | | |
+---------------------------------------+------------------------+------------------------+
| Depreciation and amortisation | 501,084 | 296,110 |
+---------------------------------------+------------------------+------------------------+
| Loss on disposal of assets | - | 104,254 |
+---------------------------------------+------------------------+------------------------+
| Loss on the sale of investment | - | 211,610 |
+---------------------------------------+------------------------+------------------------+
| Allowance (recovery) of bad debts | 531,020 | (1,372,251) |
+---------------------------------------+------------------------+------------------------+
| Equity income in investment | - | (306,902) |
+---------------------------------------+------------------------+------------------------+
| (Increase) / decrease in assets: | | |
+---------------------------------------+------------------------+------------------------+
| Accounts receivable | (2,560,964) | (1,157,526) |
+---------------------------------------+------------------------+------------------------+
| Other receivables | (12,520) | (32,201) |
+---------------------------------------+------------------------+------------------------+
| Inventory | (1,498,623) | 1,097,828 |
+---------------------------------------+------------------------+------------------------+
| Advances to suppliers | (512,340) | (399,168) |
+---------------------------------------+------------------------+------------------------+
| Prepaid expense | 223,541 | 62,424 |
+---------------------------------------+------------------------+------------------------+
| | | |
+---------------------------------------+------------------------+------------------------+
| Increase/(decrease) in current | | |
| liabilities: | | |
+---------------------------------------+------------------------+------------------------+
| Accounts payable | 2,463,148 | (415,572) |
+---------------------------------------+------------------------+------------------------+
| Accrued expenses | 32,615 | (20,399) |
+---------------------------------------+------------------------+------------------------+
| | ---------------------- | ---------------------- |
+---------------------------------------+------------------------+------------------------+
| Net cash used in operating activities | (1,461,401) | (721,762) |
+---------------------------------------+------------------------+------------------------+
| | ---------------------- | ---------------------- |
+---------------------------------------+------------------------+------------------------+
| | | |
+---------------------------------------+------------------------+------------------------+
| CASH FLOWS FROM INVESTING ACTIVITIES | | |
+---------------------------------------+------------------------+------------------------+
| Acquisition of property and equipment | (3,268) | - |
+---------------------------------------+------------------------+------------------------+
| Additions to construction in progress | - | (15,285) |
+---------------------------------------+------------------------+------------------------+
| Proceeds from other assets | - | 735,656 |
+---------------------------------------+------------------------+------------------------+
| | ---------------------- | ---------------------- |
+---------------------------------------+------------------------+------------------------+
| Net cash provided by (used in) | (3,268) | 720,371 |
| investing activities | | |
+---------------------------------------+------------------------+------------------------+
| | ---------------------- | ---------------------- |
+---------------------------------------+------------------------+------------------------+
| | | |
| CASH FLOWS FROM FINANCING ACTIVITIES | | |
| Proceeds from issuance of long-term | 1,466,900 | - |
| debt | | |
| | 1,466,900 | - |
| Net cash provided by (used in) | | |
| investing activities | | |
| | | |
+---------------------------------------+------------------------+------------------------+
| Effect of exchange rate changes on | | |
| cash and cash equivalents | 42,975 | (5,213) |
+---------------------------------------+------------------------+------------------------+
| | ---------------------- | ---------------------- |
+---------------------------------------+------------------------+------------------------+
| NET DECREASE IN CASH & CASH | 45,206 | (6,604) |
| EQUIVALENTS | | |
+---------------------------------------+------------------------+------------------------+
| | | |
+---------------------------------------+------------------------+------------------------+
| CASH & CASH EQUIVALENTS, BEGINNING OF | | |
| PERIOD | 4,824,135 | 90,716 |
+---------------------------------------+------------------------+------------------------+
| | ---------------------- | ---------------------- |
+---------------------------------------+------------------------+------------------------+
| CASH & CASH EQUIVALENTS, END OF | 4,869,341 | 84,112 |
| PERIOD | | |
+---------------------------------------+------------------------+------------------------+
| | ============ | ============ |
+---------------------------------------+------------------------+------------------------+
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW | | |
| INFORMATION: | | |
+---------------------------------------+------------------------+------------------------+
| Interest paid | - | - |
+---------------------------------------+------------------------+------------------------+
| | ============ | ============ |
+---------------------------------------+------------------------+------------------------+
| Income taxes paid | - | - |
+---------------------------------------+------------------------+------------------------+
| | ============ | ============ |
+---------------------------------------+------------------------+------------------------+
| | | |
+---------------------------------------+------------------------+------------------------+
| SUPPLEMENTAL NON-CASH INVESTING AND | | |
| FINANCING ACTIVITES: | | |
+---------------------------------------+------------------------+------------------------+
| Transfer of construction in process | | |
| to property and equipment | | 7,143,372 |
+---------------------------------------+------------------------+------------------------+
| | ============ | ============ |
+---------------------------------------+------------------------+------------------------+
| Exchange of investment for inventory | | 378,789 |
+---------------------------------------+------------------------+------------------------+
| | ============ | ============ |
+---------------------------------------+------------------------+------------------------+
| | | |
+---------------------------------------+------------------------+------------------------+
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED JUNE 30,
2010 AND 2009 (UNAUDITED)
Note 1 - Organization and Basis of Presentation
The unaudited consolidated financial statements have been prepared by Bodisen
Biotech, Inc., a Delaware corporation (the "Company" or "Bodisen"), pursuant to
the rules and regulations of the Securities Exchange Commission ("SEC"). The
information furnished herein reflects all adjustments (consisting of normal
recurring accruals and adjustments) which are, in the opinion of management,
necessary to fairly present the operating results for the respective periods.
Certain information and footnote disclosures normally present in annual
consolidated financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been omitted
pursuant to such rules and regulations. These consolidated financial statements
should be read in conjunction with the audited consolidated financial statements
and footnotes included in the Company's Annual Report on Form 10-K. The results
for the six months ended June 30, 2010 are not necessarily indicative of the
results to be expected for the full year ending December 31, 2010.
Organization and Line of Business
The accompanying consolidated financial statements include the accounts of
Bodisen Biotech, Inc., its 100% wholly-owned subsidiaries Bodisen Holdings, Inc.
(BHI), Yang Ling Bodisen Agricultural Technology Co., Ltd (Agricultural), which
was incorporated in March 2005, and Sinkiang Bodisen Agriculture Material Co.,
Ltd. (Material), which was incorporated in June 2006, as well as the accounts of
Agricultural's 100% wholly- owned subsidiary Yang Ling Bodisen Biology Science
and Technology Development Company Limited (BBST). The Company is engaged in
developing, manufacturing and selling organic fertilizers, liquid fertilizers,
pesticides and insecticides in the People's Republic of China and produce
numerous proprietary product lines, from pesticides to crop-specific
fertilizers. The Company markets and sells its products to distributors
throughout the People's Republic of China, and these distributors, in turn, sell
the products to farmers.
Basis of Presentation
The accompanying consolidated financial statements have been prepared in
conformity with accounting principles generally accepted in the United States of
America. All significant intercompany transactions and balances have been
eliminated. The Company's functional currency is the Chinese Yuan Renminbi
("RMB"); however the accompanying consolidated financial statements have been
translated and presented in United States Dollars ($ or "USD").
Principles of Consolidation
The accompanying consolidated financial statements include the accounts of
Bodisen Biotech, Inc., and its subsidiaries. All significant inter-company
accounts and transactions have been eliminated in consolidation.
Note 2 - Summary of Significant Accounting Policies
Reclassifications
Certain amounts in the 2009 consolidated financial statements have been
reclassified to conform with the 2010 presentation with no effect to previously
reported net income (loss).
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions.
These estimates and assumptions affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
It is possible that accounting estimates and assumptions may be material to the
Company due to the levels of subjectivity and judgment involved.
Cash and Cash Equivalents
Cash and cash equivalents include cash in hand and cash in time deposits,
certificates of deposit and all highly liquid debt instruments with original
maturities of three months or less.
Accounts Receivable
The Company maintains reserves for potential credit losses for accounts
receivable. Management reviews the composition of accounts receivable and
analyzes historical bad debts, customer concentrations, customer credit
worthiness, current economic trends and changes in customer payment patterns to
evaluate the adequacy of these reserves. Reserves are recorded based on the
Company's historical collection history.
Advances to Suppliers
The Company advances to certain vendors for purchase of its material. The
advances to suppliers are interest free and unsecured.
Inventories
Inventories are valued at the lower of cost (determined on a weighted average
basis) or market. The Management compares the cost of inventories with the
market value and allowance is made for writing down their inventories to market
value, if lower.
Property & Equipment and Capital Work In Progress
Property and equipment are stated at cost. Expenditures for maintenance and
repairs are charged to earnings as incurred; additions, renewals and betterments
are capitalized. When property and equipment are retired or otherwise disposed
of, the related cost and accumulated depreciation are removed from the
respective accounts, and any gain or loss is included in operations.
Depreciation of property and equipment is provided using the straight-line
method for substantially all assets with estimated lives of:
+---------------------------------+-------------+
| Operating equipment | 10 years |
+---------------------------------+-------------+
| Vehicles | 8 years |
+---------------------------------+-------------+
| Office equipment | 5 years |
+---------------------------------+-------------+
| Buildings | 30 years |
+---------------------------------+-------------+
The following are the details of the property and equipment at June 30, 2010 and
December 31, 2009, respectively:
+------------------------------+--------------+----------+--------------+
| | June 30 | | December 31, |
| | 2010 | | 2009 |
+------------------------------+--------------+----------+--------------+
| | | | |
+------------------------------+--------------+----------+--------------+
| Operating equipment | $ 4,671,161 | | $ 4,650,919 |
+------------------------------+--------------+----------+--------------+
| Vehicles | 690,604 | | 687,791 |
+------------------------------+--------------+----------+--------------+
| Office equipment | 87,910 | | 87,552 |
+------------------------------+--------------+----------+--------------+
| Buildings | 8,693,542 | | 8,656,077 |
+------------------------------+--------------+----------+--------------+
| | | | |
+------------------------------+--------------+----------+--------------+
| | 14,143,217 | | 14,082,339 |
+------------------------------+--------------+----------+--------------+
| Less accumulated | (2,647,269) | | (2,244,933) |
| depreciation | | | |
+------------------------------+--------------+----------+--------------+
| Property and equipment, net | $ 11,495,948 | | $ 11,837,406 |
+------------------------------+--------------+----------+--------------+
Depreciation expense for the three and six months ended June 30, 2010 and 2009
was $185,472 and $391,526 and $94,246 and $186,629, respectively.
On June 30, 2010 and December 31, 2009, the Company had "Capital Work in
Progress" representing the construction in progress of the Company's
manufacturing plant amounting $10,465,269 and $10,422,641. During the six months
ended June 30, 2010, there were no transfers from construction in progress to
property and equipment.
Marketable Securities
The Company applies the guidance of ASC Topic 320 "Investments-Debt and Equity
Securities," which requires investments in equity securities to be classified as
either trading securities or available-for-sale securities. Marketable
securities that are bought and held principally for the purpose of selling them
in the near term are classified as trading securities and are reported at fair
value, with unrealized gains and losses recognized in earnings. Marketable
equity securities not classified as trading are classified as available for
sale, and are carried at fair market value, with the unrealized gains and
losses, net of tax, included in the determination of comprehensive income and
reported in shareholders' equity.
Long-Lived Assets
The Company applies the provisions of ASC Topic 360, "Property, Plant, and
Equipment," which addresses financial accounting and reporting for the
impairment or disposal of long-lived assets. ASC 360 requires impairment losses
to be recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be generated
by those assets are less than the assets' carrying amounts. In that event, a
loss is recognized based on the amount by which the carrying amount exceeds the
fair value of the long-lived assets. Loss on long-lived assets to be disposed of
is determined in a similar manner, except that fair values are reduced for the
cost of disposal. Based on its review, the Company believes that as of June 30,
2010
and December 31, 2009, there was no significant impairment of its long-lived
assets.
Intangible Assets
Intangible assets consist of Rights to use land and Fertilizers proprietary
technology rights. The Company evaluates intangible assets for impairment, at
least on an annual basis and whenever events or changes in circumstances
indicate that the carrying value may not be recoverable from its estimated
future cash flows. Recoverability of intangible assets, other long-lived assets
and, goodwill is measured by comparing their net book value to the related
projected undiscounted cash flows from these assets, considering a number of
factors including past operating results, budgets, economic projections, market
trends and product development cycles. If the net book value of the asset
exceeds the related undiscounted cash flows, the asset is considered impaired,
and a second test is
performed to measure the amount of impairment loss.
Fair Value of Financial Instruments
For certain of the Company's financial instruments, including cash and cash
equivalents, restricted cash, accounts receivable, accounts payable, accrued
liabilities and short-term debt, the carrying amounts approximate their fair
values due to their short maturities. In addition, the Company has long-term
debt with financial institutions. The carrying amounts of the line of credit and
other long-term liabilities approximate their fair values based on current rates
of interest for instruments with similar characteristics.
ASC Topic 820, "Fair Value Measurements and Disclosures," requires disclosure of
the fair value of financial instruments held by the Company. ASC Topic 825,
"Financial Instruments," defines fair value, and establishes a three-level
valuation hierarchy for disclosures of fair value measurement that enhances
disclosure requirements for fair value measures. The carrying amounts reported
in the consolidated balance sheets for receivables and current liabilities each
qualify as financial instruments and are a reasonable estimate of their fair
values because of the short period of time between the origination of such
instruments and their expected realization and their current market rate of
interest. The three levels of valuation hierarchy are defined as follows:
· Level 1 inputs to the valuation methodology are quoted prices for
identical assets or liabilities in active markets.
· Level 2 inputs to the valuation methodology include quoted prices for
similar assets and liabilities in active markets, and inputs that are observable
for the asset or liability, either directly or indirectly, for substantially the
full term of the financial instrument.
· Level 3 inputs to the valuation methodology are unobservable and
significant to the fair value measurement.
The Company analyzes all financial instruments with features of both liabilities
and equity under ASC 480, "Distinguishing Liabilities from Equity," and ASC 815.
The following table represents our assets and liabilities by level measured at
fair value on a recurring basis as of June 30, 2010.
+------------------------+------------+------------+------------+
| Description | Level 1 | Level 2 | Level 3 |
+------------------------+------------+------------+------------+
| Assets: | | | |
+------------------------+------------+------------+------------+
| Marketable securities | $ 9 | $ - | $ - |
| | ,285,514 | | |
+------------------------+------------+------------+------------+
The Company did not identify any other non-recurring assets and liabilities that
are required to be presented in the consolidated balance sheets at fair value in
accordance with ASC 825.
Revenue Recognition
The Company's revenue recognition policies are in compliance with Staff
accounting bulletin (SAB) 104. Sales revenue is recognized at the date of
shipment to customers when a formal arrangement exists, the price is fixed or
determinable, the delivery is completed, no other significant obligations of the
Company exist and collectability is reasonably assured. Payments received before
all of the relevant criteria for revenue recognition are satisfied are recorded
as unearned revenue.
Advertising Costs
The Company expenses the cost of advertising as incurred or, as appropriate, the
first time the advertising takes place. Advertising costs for the three and six
months ended June 30, 2010 and 2009 were insignificant.
Stock-Based Compensation
The Company records stock-based compensation in accordance with ASC Topic 718,
"Compensation - Stock Compensation." ASC 718 requires companies to measure
compensation cost for stock-based employee compensation at fair value at the
grant date and recognize the expense over the employee's requisite service
period. The Company recognizes in the statement of operations the grant-date
fair value of stock options and other equity-based compensation issued to
employees and non-employees. There were 426,000 options outstanding as of June
30, 2010.
Income Taxes
The Company accounts for income taxes in accordance with ASC Topic 740, "Income
Taxes." ASC 740 requires a company to use the asset and liability method of
accounting for income taxes, whereby deferred tax assets are recognized for
deductible temporary differences, and deferred tax liabilities are recognized
for taxable temporary differences. Temporary differences are the differences
between the reported amounts of assets and liabilities and their tax bases.
Deferred tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion, or all of, the
deferred tax assets will not be realized. Deferred tax assets and liabilities
are adjusted for the effects of changes in tax laws and rates on the date of
enactment.
Under ASC 740, a tax position is recognized as a benefit only if it is "more
likely than not" that the tax position would be sustained in a tax examination,
with a tax examination being presumed to occur. The amount recognized is the
largest amount of tax benefit that is greater than 50% likely of being realized
on examination. For tax positions not meeting the "more likely than not" test,
no tax benefit is recorded. The adoption had no effect on the Company's
consolidated financial statements.
In March 2005, Bodisen Biotech Inc. formed Agricultural. Under Chinese law, a
newly formed wholly owned subsidiary of a foreign company enjoys an income tax
exemption for the first two years and a 50% reduction of normal income tax rates
for the following 3 years. In order to extend such tax benefits, in June 2005,
Agricultural completed a transaction with BBST, which resulted in Agricultural
owning 100% of BBST.
Foreign Currency Translation
The accounts of the Company's Chinese subsidiaries are maintained in the RMB and
the accounts of the U.S. parent company are maintained in the USD. The accounts
of the Chinese subsidiaries are were translated into USD in accordance with
Accounting Standards Codification ("ASC") Topic 830 "Foreign Currency Matters,"
with the RMB as the functional currency for the Chinese subsidiaries. According
to Topic 830, all assets and liabilities were translated at the exchange rate on
the balance sheet date, stockholders' equity is translated at historical rates
and statement of operations items are translated at the weighted average
exchange rate for the period. The resulting translation adjustments are reported
under other comprehensive income in accordance with ASC Topic 220,
"Comprehensive Income." Gains and losses resulting from the translations of
foreign currency transactions and balances are reflected in the statement of
operations.
Foreign Currency Transactions and Comprehensive Income
Accounting principles generally require that recognized revenue, expenses, gains
and losses be included in net income. Certain statements, however, require
entities to report specific changes in assets and liabilities, such as gain or
loss on foreign currency translation, as a separate component of the equity
section of the balance sheet. Such items, along with net income, are components
of comprehensive income. The functional currency of the Company's Chinese
subsidiaries is the Chinese Yuan Renminbi. Translation gains of $8,295,867 and
$8,127,749 at June 30, 2010 and December 31, 2009, respectively are classified
as an item of other comprehensive income in the stockholders' equity section of
the consolidated balance sheet. During the three and six months ended June 30,
2010, other comprehensive income in the consolidated statements of operations
and other comprehensive income included translation gains (loss) of $168,197 and
$168,118, respectively, and ($558) and ($54,908) for the three and six months
ended June 30, 2009, respectively.
Basic and Diluted Earnings Per Share
Earnings per share is calculated in accordance with the ASC Topic 260, "Earnings
Per Share." Basic earnings per share is based upon the weighted average number
of common shares outstanding. Diluted earnings per share is based on the
assumption that all dilutive convertible shares and stock warrants were
converted or exercised. Dilution is computed by applying the treasury stock
method. Under this method, warrants are assumed to be exercised at the beginning
of the period (or at the time of issuance, if later), and as if funds obtained
thereby were used to purchase common stock at the average market price during
the period. There were 426,000 and 436,000 options as of June 30, 2010 and 2009
that were excluded from the diluted loss per share calculation due to their
antidilutive
effect.
Statement of Cash Flows
In accordance with ASC Topic 230, "Statement of Cash Flows," cash flows from the
Company's operations are calculated based upon the local currencies using the
average translation rates. As a result, amounts related to assets and
liabilities reported on the consolidated statements of cash flows will not
necessarily agree with changes in the corresponding balances on the consolidated
balance sheets.
Segment Reporting
ASC Topic 280, "Segment Report," requires use of the "management approach" model
for segment reporting. The management approach model is based on the way a
company's management organizes segments within the company for making operating
decisions and assessing performance. ASC Topic 280 has no effect on the
Company's consolidated financial statements as the Company consists of one
reportable business segment. All revenue is from customers in People's Republic
of China and all of the Company's assets are located in People's Republic of
China.
Recent Accounting Pronouncements
In October 2009, the FASB issued Accounting Standards Update 2009-15 ("ASU
2009-15") regarding accounting for own-share lending arrangements in
contemplation of convertible debt issuance or other financing. This ASU requires
that at the date of issuance of the shares in a share-lending arrangement
entered into in contemplation of a convertible debt offering or other financing,
the shares issued shall be measured at fair value and be recognized as an
issuance cost, with an offset to additional paid-in capital. Further, loaned
shares are excluded from basic and diluted earnings per share unless default of
the share-lending arrangement occurs, at which time the loaned shares would be
included in the basic and diluted earnings-per-share calculation. This ASU is
effective for fiscal years beginning on or after December 15, 2009, and interim
periods within those fiscal years for arrangements outstanding as of the
beginning of those fiscal years. The adoption of this ASU did not have a
significant impact on the Company's consolidated financial statements.
On December 15, 2009, the FASB issued ASU No. 2010-06 Fair Value Measurements
and Disclosures Topic 820 "Improving Disclosures about Fair Value Measurements".
This ASU requires some new disclosures and clarifies some existing disclosure
requirements about fair value measurement as set forth in Codification Subtopic
820-10. The FASB's objective is to improve these disclosures and, thus, increase
the transparency in financial reporting. The adoption of this ASU did not have a
material impact on the Company's consolidated financial statements.
On February 25, 2010, the FASB issued ASU 2010-09 Subsequent Events Topic 855
"Amendments to Certain Recognition and Disclosure Requirements," effective
immediately. The amendments in the ASU remove the requirement for an SEC filer
to disclose a date through which subsequent events have been evaluated in both
issued and revised financial statements. Revised financial statements include
financial statements revised as a result of either correction of an error or
retrospective application of U.S. GAAP. The FASB believes these amendments
remove potential conflicts with the SEC's literature. The adoption of this ASU
did not have a material impact on the Company's consolidated financial
statements.
On March 5, 2010, the FASB issued ASU No. 2010-11 Derivatives and Hedging Topic
815 "Scope Exception Related to Embedded Credit Derivatives." This ASU clarifies
the guidance within the derivative literature that exempts certain credit
related features from analysis as potential embedded derivatives requiring
separate accounting. The ASU specifies that an embedded credit derivative
feature related to the transfer of credit risk that is only in the form of
subordination of one financial instrument to another is not subject to
bifurcation from a host contract under ASC 815-15-25, Derivatives and Hedging -
Embedded
Derivatives - Recognition. All other embedded credit derivative features should
be analyzed to determine whether their economic characteristics and risks are
"clearly and closely related" to the economic characteristics and risks of the
host contract and whether bifurcation is required. The ASU is effective for the
Company on July 1, 2010. Early adoption is permitted. The adoption of this ASU
will not have a material impact on the Company's consolidated financial
statements.
In April 2010, the FASB codified the consensus reached in Emerging Issues Task
Force Issue No. 08-09, "Milestone Method of Revenue Recognition." FASB ASU No.
2010-17 provides guidance on defining a milestone and determining when it may be
appropriate to apply the milestone method of revenue recognition for research
and development transactions. FASB ASU No. 2010 - 17 is effective for fiscal
years beginning on or after June 15, 2010, and is effective on a prospective
basis for milestones achieved after the adoption date. The Company does not
expect this ASU will have a material impact on its financial position or results
of operations when it adopts this update on January 1, 2011.
Note 3 - Inventory
Inventory at June 30, 2010 and December 31, 2009 consisted of the following:
+----------------------------+-----------------+----------+-----------------+
| | June 30, | | December 31, |
| | 2010 | | 2009 |
+----------------------------+-----------------+----------+-----------------+
| Raw materials | $ 1,310,251 | | $ 355,714 |
+----------------------------+-----------------+----------+-----------------+
| Packaging | 21,164 | | 59,729 |
+----------------------------+-----------------+----------+-----------------+
| Finished goods | 1,168,633 | | 652,202 |
+----------------------------+-----------------+----------+-----------------+
| | 2,500,048 | | 1,067,645 |
+----------------------------+-----------------+----------+-----------------+
| Less obsolescence reserve | - | | (76,505) |
+----------------------------+-----------------+----------+-----------------+
| Inventory, net | $ 2,500,048 | | $ 991,140 |
+----------------------------+-----------------+----------+-----------------+
Note 5 - Marketable Security
During 2008, the Company exchanged $3,291,264 of receivables for a 28.8%
ownership interest in a Chinese company, Shanxi Jiali Pharmaceutical Co. Ltd
("Jiali"). The Company had written down the value of this investment by $987,860
at December 31, 2008. This investment was originally accounted for under the
equity method and the Company recorded equity income in this investment through
September 30, 2009. During the fourth quarter of 2009, Jiali was purchased by
China Pediatric Pharmaceuticals, Inc. ("China Pediatric"), a public company.
After the transaction, the Company owned 18.8% of China Pediatric. The Company
then changed the accounting method for the investment from the equity method to
the fair value method. At the date of the change, the investment was valued at
$2,829,732. As of June 30, 2010 and December 31, 2009, the fair value of the
investment is $9,285,514 and $8,175,290, respectively, which is reflected in the
consolidated balance sheet. The company recognized an unrealized gain of
$2,240,634 and $1,110,224 for the three and six months ended June 30, 2010,
respectively, and an unrealized gain of $5,613,449 and $4,891,130 for the three
and six months ended June 30, 2009, respectively, which is reflected as other
comprehensive income in the consolidated statement of stockholder's equity.
Note 6- Intangible Assets
Net intangible assets at June 30, 2010 and December 31, 2009 were as follows:
+----------------------------+-----------------+----------+-----------------+
| | June 30, | | December 31, |
| | 2010 | | 2009 |
+----------------------------+-----------------+----------+-----------------+
| Rights to use land | $ 5,020,173 | | $ 4,999,725 |
+----------------------------+-----------------+----------+-----------------+
| Fertilizers proprietary | 1,178,400 | | 1,173,600 |
| technology rights | | | |
+----------------------------+-----------------+----------+-----------------+
| | 6,198,573 | | 6,173,325 |
+----------------------------+-----------------+----------+-----------------+
| Less accumulated | (1,414,749) | | (1,299,421) |
| amortization | | | |
+----------------------------+-----------------+----------+-----------------+
| Intangibles, net | $ 4,783,824 | | $ 4,873,904 |
+----------------------------+-----------------+----------+-----------------+
The Company's office and manufacturing site is located in Yang Ling Agricultural
High-Tech Industries Demonstration Zone in the province of Shaanxi, People's
Republic of China. The Company leases land per a real estate contract with the
government of People's Republic of China for a period from November 2001 through
November 2051. Per the People's Republic of China's governmental regulations,
the Government owns all land.
During July 2003, the Company leased another parcel of land per a real estate
contract with the government of the People's Republic of China for a period from
July 2003 through June 2053.
The Company has recognized the amounts paid for the acquisition of rights to use
land as intangible asset and amortizing over a period of fifty years.
The Company acquired Fluid and Compound Fertilizers proprietary technology
rights with a life ending December 31, 2011. The Company is amortizing
Fertilizers proprietary technology rights over a period of ten years.
On July 15, 2008, the Company entered into a 50 year land rights agreement.
Amortization expense for the Company's intangible assets amounted to $54,788 and
$109,558 for the three and six months ended June 30, 2010, respectively and
$54,763 and $109,481 for the three and six months ended June 30, 2009,
respectively.
Note 7 - Long-Term Note Payable
On March 19, 2010, the Company obtained a bank loan for 10,000,000 RMB
(approximately $1,437,000). The loan has an 8.1% annual interest rate, matures
on March 19, 2010 and is secured by the Company's land and facility.
Note 8 - Stock Options
Stock Options
The following is a summary of the stock option activity:
+------------------------+-------------+----------+-----------+----------+------------+
| | | | Weighted | | Aggregate |
| | Options | | Average | | Intrinsic |
| | Outstanding | | Exercise | | Value |
| | | | Price | | |
+------------------------+-------------+----------+-----------+----------+------------+
| Outstanding at | 426,000 | | $ 1.07 | | |
| December 31, 2009 | | | | | |
+------------------------+-------------+----------+-----------+----------+------------+
| Granted | - | | | | |
+------------------------+-------------+----------+-----------+----------+------------+
| Cancelled | - | | | | |
+------------------------+-------------+----------+-----------+----------+------------+
| Exercised | - | | | | |
+------------------------+-------------+----------+-----------+----------+------------+
| Outstanding at June | 426,000 | | $ 1.07 | | |
| 30, 2010 (unaudited) | | | | | |
+------------------------+-------------+----------+-----------+----------+------------+
| Exercisable at June | 426,000 | | $ 1.07 | | $ - |
| 30, 2010 (unaudited) | | | | | |
+------------------------+-------------+----------+-----------+----------+------------+
Note 9 - Statutory Common Welfare Fund
As stipulated by the Company Law of the People's Republic of China (PRC), net
income after taxation can only be distributed as dividends after appropriation
has been made for the following:
i. Making up cumulative prior years' losses, if any;
ii. Allocations to the "Statutory surplus reserve" of at least 10% of income
after tax, as determined under PRC accounting rules and regulations, until the
fund amounts to 50% of the Company's registered capital;
iii. Allocations of 5-10% of income after tax, as determined under PRC
accounting rules and regulations, to the Company's "Statutory common welfare
fund", which is established for the purpose of providing employee facilities and
other collective benefits to the Company's employees; and
iv. Allocations to the discretionary surplus reserve, if approved in the
stockholders' general meeting.
Pursuant to the new Corporate Law effective on January 1, 2006, there is now
only one "Statutory surplus reserve" requirement. The reserve is 10 percent of
income after tax, not to exceed 50 percent of registered capital.
The Company did not appropriate a reserve for the statutory surplus reserve and
welfare fund for the six months ended June 30, 2010 and 2009.
Note 10 - Factory Location and Lease Commitments
The Company's principal executive offices are located at North Part of Xinquia
Road, Yang Ling Agricultural High-Tech Industries Demonstration Zone Yang Ling,
Shaanxi province, People's Republic of China. BBST owns two factories, which
includes three production lines, an office building, one warehouse, and two
research labs and, is located on 10,900 square meters of land. These leases
require monthly rental payments of $2,546 and the leases expire in 2013.
Note 11 - Current Vulnerability Due to Certain Concentrations
Two vendors provided 18.8% and 18.5% of the Company's raw materials for the six
months ended June 30, 2010 and three vendors provided 49.4%, 12.6% and 11.5% of
the Company's raw materials for the six months ended June 30, 2009.
The Company's operations are carried out in the PRC. Accordingly, the Company's
business, financial condition and results of operations may be influenced by the
political, economic and legal environments in the PRC, by the general state of
the PRC's economy. The Company's business may be influenced by changes in
governmental policies with respect to laws and regulations, anti-inflationary
measures, currency conversion and remittance abroad, and rates and methods of
taxation, among other things.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
Cautionary Note Regarding Forward-Looking Statements
We make certain forward-looking statements in this report. Statements concerning
our future operations, prospects, strategies, financial condition, future
economic performance (including growth and earnings), demand for our services,
and other statements of our plans, beliefs, or expectations, including the
statements contained under the captions "Management's Discussion and Analysis of
Financial Condition and Results of Operations," "Business," as well as captions
elsewhere in this document, are forward-looking statements. In some cases these
statements are identifiable through the use of words such as "anticipate,"
"believe," "estimate," "expect," "intend," "plan," "project," "target," "can",
"could," "may," "should," "will," "would," and similar expressions.
We intend such forward-looking statements to be covered by the safe harbor
provisions contained in Section 27A of the Securities Act of 1933, as amended
(the "Securities Act") and in Section 21E of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The forward-looking statements we make
are not guarantees of future performance and are subject to various assumptions,
risks, and other factors that could cause actual results to differ materially
from those suggested by these forward-looking statements. Because such
statements are subject to risks and uncertainties, actual results may differ
materially from those expressed or implied by the forward-looking statements.
Indeed, it is likely that some of our assumptions will prove to be incorrect.
Our actual results and financial position will vary from those projected or
implied in the forward-looking statements and the variances may be material. You
are cautioned not to place undue reliance on such forward-looking statements.
These risks and uncertainties, together with the other risks described from time
to time in reports and documents that we file with the SEC should be considered
in evaluating forward-looking statements.
The nature of our business makes predicting the future trends of our revenue,
expenses, and net income difficult. Thus, our ability to predict results or the
actual effect of our future plans or strategies is inherently uncertain. The
risks and uncertainties involved in our business could affect the matters
referred to in any forward-looking statements and it is possible that our actual
results may differ materially from the anticipated results indicated in these
forward-looking statements. Important factors that could cause actual results to
differ from those in the forward-looking statements include, without limitation,
the following:
· the effect of political, economic, and market conditions and geopolitical
events;
· legislative and regulatory changes that affect our business;
· the availability of funds and working capital;
· the actions and initiatives of current and potential competitors;
· investor sentiment; and
· our reputation
We do not undertake any responsibility to publicly release any revisions to
these forward-looking statements to take into account events or circumstances
that occur after the date of this report. Additionally, we do not undertake any
responsibility to update you on the occurrence of any unanticipated events which
may cause actual results to differ from those expressed or implied by any
forward-looking statements.
The following discussion and analysis should be read in conjunction with our
consolidated financial statements and the related notes thereto as filed with
the SEC and other financial information contained elsewhere in this Report.
Except as otherwise indicated by the context, references in this Form 10-Q to
"we," "us," "our," "the Registrant", "our Company," or "the Company" are Bodisen
Biotech, Inc., a Delaware corporation and its consolidated subsidiaries,
including Yang Ling Bodisen Biology Science and Technology Development Company
Limited, ("Yang Ling"), our operating subsidiary. Unless the context otherwise
requires, all references to (i) "PRC" and "China" are to the People's Republic
of China; (ii) "U.S. dollar," "$" and "US$" are to United States dollars; (iii)
"RMB" are to Yuan Renminbi of China; (iv) "Securities Act" are to the Securities
Act of 1933, as amended; and (v) "Exchange Act" are to the Securities Exchange
Act of 1934, as amended.
Critical Accounting Policies and Estimates
Our financial statements and related public financial information are based on
the application of accounting principles generally accepted in the United States
("US GAAP"). US GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, revenues and expenses amounts reported. These estimates can
also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial condition. We
believe our use of estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. We base our estimates on
historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ materially from
these estimates under different assumptions or conditions. We continue to
monitor significant estimates made during the preparation of our financial
statements.
We believe the following is among the most critical accounting policies that
impact our consolidated financial statements. We suggest that our significant
accounting policies, as described in our condensed consolidated financial
statements in the Summary of Significant Accounting Policies, be read in
conjunction with this Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Accounts receivable
We maintain reserves for potential credit losses on accounts receivable and
record them primarily on a specific identification basis. In order to establish
reserves, we review the composition of accounts receivable and analyze
historical bad debts, customer concentrations, customer credit worthiness,
current economic trends and changes in customer payment patterns to evaluate the
adequacy of these reserves. This analysis and evaluation requires the use of
judgments and estimates. Because of the nature of the evaluation, certain
judgments and estimates are subject to change, which may require adjustments in
future periods.
Inventories
We value inventories at the lower of cost (determined on a weighted average
basis) or market. When evaluating our inventory, we compare the cost with the
market value and make allowance to write them down to market value, if lower.
The determination of market value requires the use of estimates and judgment by
our management.
Intangible assets
We evaluate intangible assets for impairment, at least on an annual basis and
whenever events or changes in circumstances indicate that the carrying value may
not be recoverable from its estimated future cash flows. This evaluation
requires the use of judgments and estimates, in particular with respect to
recoverability.
Recoverability of intangible assets, other long-lived assets and, goodwill is
measured by comparing their net book value to the related projected undiscounted
cash flows from these assets, considering a number of factors including past
operating results, budgets, economic projections, market trends and product
development cycles. If the net book value of the asset exceeds the related
undiscounted cash flows, the asset is considered impaired, and a second test is
performed to measure the amount of impairment loss.
Recent Accounting Pronouncements
In October 2009, the FASB issued Accounting Standards Update 2009-15 ("ASU
2009-15") regarding accounting for own-share lending arrangements in
contemplation of convertible debt issuance or other financing. This ASU requires
that at the date of issuance of the shares in a share-lending arrangement
entered into in contemplation of a convertible debt offering or other financing,
the shares issued shall be measured at fair value and be recognized as an
issuance cost, with an offset to additional paid-in capital. Further, loaned
shares are excluded from basic and diluted earnings per share unless default of
the share-lending arrangement occurs, at which time the loaned shares would be
included in the basic and diluted earnings-per-share calculation. This ASU is
effective for fiscal years beginning on or after December 15, 2009, and interim
periods within those fiscal years for arrangements outstanding as of the
beginning of those fiscal years. The adoption of this ASU did not have a
significant impact on the Company's consolidated financial statements.
On December 15, 2009, the FASB issued ASU No. 2010-06 Fair Value Measurements
and Disclosures Topic 820 "Improving Disclosures about Fair Value Measurements".
This ASU requires some new disclosures and clarifies some existing disclosure
requirements about fair value measurement as set forth in Codification Subtopic
820-10. The FASB's objective is to improve these disclosures and, thus, increase
the transparency in financial reporting. The adoption of this ASU did not have a
material impact on the Company's consolidated financial statements.
On February 25, 2010, the FASB issued ASU 2010-09 Subsequent Events Topic 855
"Amendments to Certain Recognition and Disclosure Requirements," effective
immediately. The amendments in the ASU remove the requirement for an SEC filer
to disclose a date through which subsequent events have been evaluated in both
issued and revised financial statements. Revised financial statements include
financial statements revised as a result of either correction of an error or
retrospective application of U.S. GAAP. The FASB believes these amendments
remove potential conflicts with the SEC's literature. The adoption of this ASU
did not have a material impact on the Company's consolidated financial
statements.
On March 5, 2010, the FASB issued ASU No. 2010-11 Derivatives and Hedging Topic
815 "Scope Exception Related to Embedded Credit Derivatives." This ASU clarifies
the guidance within the derivative literature that exempts certain credit
related features from analysis as potential embedded derivatives requiring
separate accounting. The ASU specifies that an embedded credit derivative
feature related to the transfer of credit risk that is only in the form of
subordination of one financial instrument to another is not subject to
bifurcation from a host contract under ASC 815-15-25, Derivatives and Hedging -
Embedded Derivatives - Recognition. All other embedded credit derivative
features should be analyzed to determine whether their economic characteristics
and risks are "clearly and closely related" to the economic characteristics and
risks of the host contract and whether bifurcation is required. The ASU is
effective for the Company on July 1, 2010. Early adoption is permitted. The
adoption of this ASU will not have a material impact on the Company's
consolidated financial statements.
In April 2010, the FASB codified the consensus reached in Emerging Issues Task
Force Issue No. 08-09, "Milestone Method of Revenue Recognition." FASB ASU No.
2010-17 provides guidance on defining a milestone and determining when it may be
appropriate to apply the milestone method of revenue recognition for research
and development transactions. FASB ASU No. 2010 - 17 is effective for fiscal
years beginning on or after June 15, 2010, and is effective on a prospective
basis for milestones achieved after the adoption date. The Company does not
expect this ASU will have a material impact on its financial position or results
of operations when it adopts this update on January 1, 2011.
Results of Operations
Three Months Ended June 30, 2010 as Compared to Three Months Ended June 30, 2009
Revenue. We generated revenue of $2,902,929 for the three months ended June 30,
2010, an increase of $1,832,436 or 171%, compared to $1,070,493 for the three
months ended June 30, 2009. The increase in revenue is primarily attributable to
the overall recovery of the economic environment and the launch of new products
during the quarter.
Gross Profit. We achieved a gross profit of $1,048,213 for the three months
ended June 30, 2010, an increase of $871,151 or 492%, compared to $177,062 for
the three months ended June 30, 2009. Gross margin (gross profit as a percentage
of revenues), was 36% for the three months ended June 30, 2010, compared to 17%
for the three months ended June 30, 2009. The increase in the gross margin
percentage was primarily attributable to the higher profit margins which are
earned on the new products.
Aggregated selling expenses accounted for $204,772 of our operating expenses for
the three months ended June 30, 2010, an increase of $189,900 or 1,277%,
compared to $14,872 for the three months ended June 30, 2009. The increase in
our aggregated selling expenses is primarily attributable to an increase in
marketing promotion and advertising programs.
General and administrative expenses accounted for $1,097,655 of our operating
expenses for the three months ended June 30, 2010, an increase of $2,108,553 or
209%, compared to income of $1,010,898 for the three months ended June 30, 2009.
The increase in general and administrative expenses is primarily attributable to
a decrease in bad debt recoveries in 2010 compared to 2009. During the three
months ended June 30, 2009 the Company recorded a bad debt recovery of $888,737
compared to a charge to bad debt of $562,525 for the three months ended June 30,
2010.
Non Operating Income and Expenses. We had total non-operating expenses of
$34,972 for the three months ended June 30, 2010, a decrease of $383,164
compared to expense of $418,136 for the three months ended June 30, 2009. Other
income (expense) was $(19,227) for the three months ended June 30, 2010 compared
to $(484,081) for the three months ended June 30, 2009. Also included in
non-operating income (expense) for the three months ended June 30, 2009 is a
loss $81,363 related to a loss on the sale of investment and a gain of $147,259
related to equity income of an investment that we account for under the equity
method. During the three months ended June 30, 2010, we did not incur any gains
or losses related to the sale on investment or equity income in investment.
Six Months Ended June 30, 2010 as Compared to Six Months Ended June 30, 2009
Revenue. We generated revenue of $3,934,238 for the six months ended June 30,
2010, an increase of $1,328,710 or 51%, compared to $2,605,528 for the six
months ended June 30, 2009. The increase in revenue is primarily attributable to
the overall recovery of the economic environment and the launch of new products
in May 2010.
Gross Profit. We achieved a gross profit of $1,269,639 for the six months ended
June 30, 2010, an increase of $880,826 or 227%, compared to $388,813 for the six
months ended June 30, 2009. Gross margin (gross profit as a percentage of
revenues), was 32% for the six months ended June 30, 2010, compared to 15% for
the six months ended June 30, 2009. The increase in the gross margin percentage
was primarily attributable to the higher profit margins which are earned on the
new products.
Aggregated selling expenses accounted for $346,186 of our operating expenses for
the six months ended June 30, 2010, an increase of $319,068 or 1,177%, compared
to $27,118 for the six months ended June 30, 2009. The increase in our
aggregated selling expenses is primarily attributable to an increase in
marketing promotion and advertising programs.
General and administrative expenses accounted for $1,518,737 of our operating
expenses for the six months ended June 30, 2010, an increase of $2,377,153 or
277%, compared to income of $858,416 for the six months ended June 30, 2009. The
increase in general and administrative expenses is primarily attributable to a
decrease in bad debt recoveries in 2010 compared to 2009. During the six months
ended June 30, 2009 the Company recorded a bad debt recovery of $1,372,251
compared to a charge to bad debts of $531,020 for the six months ended June 30,
2010.
Non Operating Income and Expenses. We had total non-operating expense of $33,078
for the six months ended June 30, 2010, a decrease of $127,252 compared to
income of $94,174 for the six months ended June 30, 2009. Other income (expense)
was $(19,841) for the six months ended June 30, 2010 compared to $(1,284) for
the six months ended June 30, 2009. Also included in non-operating income
(expense) for the six months ended June 30, 2009 is a loss of $211,610 related
to a loss on the sale of investment and a gain of $306,902 related to equity
income of an investment that we account for under the equity method. During the
six months ended June 30, 2010, we did not incur any gains or losses related to
the sale on investment or equity income in investment.
Liquidity and Capital Resources
We are primarily a parent holding company for the operations carried out by our
indirect operating subsidiary, Yang Ling, which carries out its activities in
the People's Republic of China. Because of our holding company structure, our
ability to meet our cash requirements apart from our financing activities,
including payment of dividends on our common stock, if any, substantially
depends upon the receipt of dividends from our subsidiaries, particularly Yang
Ling.
On March 19, 2010, we obtained a bank loan for 10,000,000 RMB (approximately
$1,437,000). The loan has an 8.1% annual interest rate, matures on March 19,
2010 and is secured by our land and production facility.
As of June 30, 2010, we had $4, 869,341 of cash and cash equivalents compared to
$4,824,135 as of December 31, 2009.
Cash Flows
Operating. We used $1,461,401 of cash for operating activities for the six
months ended June 30, 2010 compared to $721,762 for the six months ended June
30, 2009.
Investing. Our investing activities used $3,268 of cash for the six months ended
June 30, 2010, compared to $720,371 of cash provided by investing activities for
the six months ended June 30, 2009. The decrease is primarily attributable to
the proceeds from the sale of investment in 2009 of $735,656 for which there
were no sales in 2010.
Financing. Our financing activities provided $1,466,900 of cash from a long term
bank financing for the six months ended June 30, 2010 compared to no cash
provided by financing activities for the six months ended June 30, 2009.
Contractual Commitments
In August 2006, we entered into a 30-year land-lease arrangement with the
government of the People's Republic of China, under which we pre-paid $2,529,818
upon execution of the contract of lease expense for the next 15 years. We agreed
to make a prepayment for the next eight years in November 2021, and will make a
final pre-payment in November 2029 for the remaining seven years. The annual
lease expense amounts to approximately $169,580. Our land-lease arrangement is
currently our only material on- and off-balance sheet expected or contractually
committed future obligation.
Off-Balance Sheet Arrangements
We currently do not have any material off-balance sheet arrangements except for
the remaining pre-payments under the land-lease arrangement described above.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of our Disclosure Controls
As of the end of the period covered by this Quarterly Report on Form 10-Q, our
principal executive officer and principal financial officer have evaluated the
effectiveness of our "disclosure controls and procedures" ("Disclosure
Controls"). Disclosure Controls, as defined in Rule 13a-15(e) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), are procedures that are
designed with the objective of ensuring that information required to be
disclosed in our reports filed under the Exchange Act, such as this Quarterly
Report, is recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms.
Disclosure Controls are also designed with the objective of ensuring that such
information is accumulated and communicated to our management, including our
Chief Executive Officer, Bo Chen, and our Chief Financial Officer, Junyan Tong,
as appropriate to allow timely decisions regarding required disclosure. Our
management does not expect that our Disclosure Controls will prevent all error
and all fraud. A control system, no matter how well conceived and operated, can
provide only reasonable, not absolute, assurance that the objectives of the
control system are met. Further, the design of a control system must reflect the
fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs. Because of the inherent limitations in all
control systems, no evaluation of controls can provide absolute assurance that
all control issues and instances of fraud, if any, within the company have been
detected. These inherent limitations include the realities that judgments in
decision-making can be faulty, and that breakdowns can occur because of simple
error or mistake. The design of any system of controls also is based in part
upon certain assumptions about the likelihood of future events, and there can be
no assurance that any design will succeed in achieving its stated goals under
all potential future conditions.
Management conducted its evaluation of disclosure controls and procedures under
the supervision of our chief executive officer and our chief financial officer.
Based on that evaluation, Messrs. Bo and Tong concluded that because of the
material weakness in internal control over financial reporting described below,
our disclosure controls and procedures were not effective as of June 30, 2010.
Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f)
under the Securities Exchange Act. Our management is also required to assess and
report on the effectiveness of our internal control over financial reporting in
accordance with Section 404 of the Sarbanes-Oxley Act of 2002 ("Section 404").
Management assessed the effectiveness of our internal control over financial
reporting as of December 31, 2009. In making this assessment, we used the
criteria set forth by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO) in Internal Control - Integrated Framework.
Notwithstanding the aforementioned controls implemented in December 2006, during
management's assessment of the effectiveness of internal control over financial
reporting as of December 31, 2009, management identified deficiencies related to
(i) the U.S. GAAP expertise of our internal accounting staff, (ii) a lack of
segregation of duties within accounting functions, (iii) our internal risk
assessment functions, and (iv) our communication functions. Management believes
that these deficiencies amount to a material weakness that render our internal
controls over financial reporting ineffective as of June 30, 2010.
A material weakness (within the meaning of PCAOB Auditing Standard No. 5) is a
deficiency, or a combination of deficiencies, in internal control over financial
reporting, such that there is a reasonable possibility that a material
misstatement of our annual or interim financial statements will not be prevented
or detected on a timely basis.
In order to correct the foregoing deficiencies, we have taken the following
remediation measures:
· Although our accounting staff is professional and experienced in
accounting requirements and procedures generally accepted in the PRC, management
has determined that they require additional training and assistance in U.S. GAAP
matters. Management has determined that our internal audit function is also
significantly deficient due to insufficient qualified resources to perform
internal audit functions. We retained an outside consulting firm in September
2006, which has since been assisting us in the implementation of Section 404.
· We have committed to the establishment of effective internal audit
functions and have instituted various anti-fraud control and financial and
account management policies and procedures to strengthen our internal controls
over financial reporting. Due to the scarcity of qualified candidates with
extensive experience in U.S. GAAP reporting and accounting in the region, we
were not able to hire sufficient internal audit resources before the end of
2009. However, we will increase our search for qualified candidates with
assistance from recruiters and through referrals.
· Due to our size and nature, segregation of all conflicting duties may not
always be possible and may not be economically feasible. However, to the extent
possible, we will implement procedures to assure that the initiation of
transactions, the custody of assets and the recording of transactions will be
performed by separate individuals.
· As of the fiscal year ended December 31, 2009, we have not yet
established an effective risk assessment system that enables us to collect
related information comprehensively and systematically, assess risks in a
timely, realistic manner, and take appropriate measures to control risks
effectively. The Company is working with its outside consultant to devise an
effective risk assessment system and our Chief Financial Officer Junyan Tong is
responsible for overseeing such measures.
· As of the six months ended June 30, 2010, we are working to strengthen
efforts to establish an effective communication system with clear procedures
that will enable us to collect, process and deliver information related to
internal controls in a timely fashion. Due to our limited staff, our Chief
Financial Officer, Mr. Tong, will initially be primarily responsible for
collecting and delivering such information among the different levels of Company
management.
We believe that the foregoing steps will remediate the material weakness
identified above, and we will continue to monitor the effectiveness of these
steps and make any changes that our management deems appropriate.
Notwithstanding the conclusion that our internal control over financial
reporting was not effective as of the end of the period covered by this report,
the Chief Executive Officer and the Chief Financial Officer believe that the
financial statements and other information contained in this annual report
present fairly, in all material respects, our business, financial condition and
results of operations. Nothing has come to the attention of management that
causes them to believe that any material inaccuracies or errors exist in our
financial statements as of June 30, 2010. The reportable conditions and other
areas of our internal control over financial reporting identified by us as
needing improvement have not resulted in a material restatement of our financial
statements. Nor are we aware of any instance where such reportable conditions or
other identified areas of weakness have resulted in a material misstatement of
omission in any report we have filed with or submitted to the Commission.
Because of its inherent limitations, internal control over financial reporting
may not prevent or detect misstatements. Projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies and procedures may deteriorate.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal controls over financial reporting
during our second quarter of 2010 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.
A copy of our Form 10-Q is available at:
http://www.sec.gov/Archives/edgar/data/1178552/000114420410043907/v193676_10q.h
m
Copies may also be obtained by contacting the Investor Relations Department at
our corporate offices by sending an e-mail message to info@bodisen.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR DMGMRMVFGGZM
1 Year Bodisen Biotech Chart |
1 Month Bodisen Biotech Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
