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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Capstone Technologies Group Inc (PK) | USOTC:CATG | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 2.00 | 1.25 | 2.50 | 0.00 | 12:34:49 |
x
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the fiscal year ended August 31, 2012
|
|
OR
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|
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from _______________
|
|
Commission file number 000-54321
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Nevada
(State or other jurisdiction of incorporation or organization)
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68-0678185
(I.R.S. Employer Identification No.)
|
|
No. 2 Longbao Street
Xiaodian Zone, Taiyuan City
Shanxi Province, P.R. China
(Address of principal executive offices)
|
030031
(Zip Code)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a small reporting company)
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Smaller reporting company
x
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Page
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3
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12
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20
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20
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21
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21
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21
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22
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23
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28
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F-1
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29
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29
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30
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34
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36
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37
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37
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38
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●
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overall economic and business conditions;
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●
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the demand for our services;
|
|
●
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competitive factors in the industries in which we compete;
|
|
●
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changes in tax requirements (including tax rate changes, new tax laws and revised tax law interpretations);
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●
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the outcome of litigation and governmental proceedings;
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|
●
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interest rate fluctuations and other changes in borrowing costs;
|
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●
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other capital market conditions, including availability of funding sources;
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●
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potential impairment of our indefinite-lived intangible assets and/or our long-lived assets; and
|
|
●
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changes in government regulations related to the education industry.
|
|
1)
|
RMB 119,782,067 (approximately $18,900,822) to be paid by August 31, 2012, but was paid on September 3, 2012
|
|
|
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2)
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RMB 100,000,000 (or RMB 87,589,800, approximately $13,821,094, net of discount) by August 31, 2013, and
|
|
|
|
3)
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RMB 100,000,000 (or RMB 93,849,000, approximately $14,808,754, net of discount) by August 31, 2014.
|
•
|
The Wholly Foreign Owned Enterprise Law (1986), as amended;
|
||
•
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The Wholly Foreign Owned Enterprise Law Implementing Rules (1990), as amended;
|
||
•
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The Sino-foreign Equity Joint Venture Enterprise Law (1979), as amended; and
|
||
•
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The Sino-foreign Equity Joint Venture Enterprise Law Implementing Rules (1983), as amended.
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·
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any reduction in student enrollment at any of these educational institutions;
|
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·
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any increase in competition from other schools; and
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·
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the failure to attract and retain high quality teaching staff in our schools.
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•
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levying fines and confiscating illegal income;
|
||
•
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requiring us to discontinue all or a portion of our business; and/or
|
||
•
|
revoking business licenses.
|
·
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changes in our industry;
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·
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competitive pricing pressures;
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·
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our ability to obtain working capital financing;
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·
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additions or departures of key personnel;
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·
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limited “public float” following the Merger, in the hands of a small number of persons whose sales or lack of sales could result in positive or negative pricing pressure on the market price for our common stock;
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·
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sales of our common stock;
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·
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our ability to execute our business plan;
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·
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operating results that fall below expectations;
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·
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loss of any strategic relationship;
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·
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regulatory developments;
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·
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economic and other external factors;
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·
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period-to-period fluctuations in our financial results; and
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·
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inability to develop or acquire new or needed technology.
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|
·
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to elect or defeat the election of our directors;
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·
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to amend or prevent amendment of our Certificate of Incorporation or By-laws;
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·
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to effect or prevent a merger, sale of assets or other corporate transaction; and
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·
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to control the outcome of any other matter submitted to our stockholders for vote.
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Certificate No.
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How Held
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Location
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Purpose
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Area (sq. m.)
|
Reg. Date
|
|||||
Shanxi North Campus
|
||||||||||
Bing Govt. Land (2000)
No. 00048
|
Granted
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18 Longbao Street
Taiyuan, Shanxi
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For Education
|
19,865
|
May 2002
|
|||||
Bing Govt. Land (2000)
No. 00047
|
Granted
|
18 Longbao Street
Taiyuan, Shanxi
|
For Education
|
28,502
|
May 2002
|
|||||
Bing Govt. Land (2006)
No. 20196
|
Allocated
|
18 Longbao Street
Taiyuan, Shanxi
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For Education
|
44,251
|
September 2006
|
|||||
Bing Govt. Land (2000)
No. 20087
|
Allocated
|
40 Double Tower South Road Taiyuan, Shanxi
|
For Dormitory
|
6,763
|
February 2006
|
|||||
Shanxi South Campus
|
||||||||||
Jing Kai Govt. Land (2007)
No. 0206005
|
Allocated
|
108 State Road south, Yu tai Road, Jinzhong, Shanxi
|
For Education
|
8,399
|
April 2007
|
|||||
Jing Kai Govt. Land (2007)
No. 0206004
|
Allocated
|
108 State Road south, Yu tai Road, Jinzhong, Shanxi
|
For Education
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38,399
|
April 2007
|
|||||
Jing Kai Govt. Land (2008)
No. 0206010
|
Granted
|
108 State Road south, Yu tai Road, Jinzhong, Shanxi
|
For Education
|
113,983
|
August 2006
|
|||||
Jing Kai Govt. Land (2009)
No. 0206002
|
Allocated
|
108 State Road south, Yu tai Road, Jinzhong, Shanxi
|
For Education
|
141,040
|
April 2009
|
|||||
Jing Kai Govt. Land (2008)
No. 0206011
|
Granted
|
108 State Road south, Yu tai Road, Jinzhong, Shanxi
|
For Education
|
8,609
|
September 2008
|
|||||
Sichuan Guang’an School
|
||||||||||
China registered (2002)
No. 1437
|
Allocated
|
Shanhe Duan, Guanghua St.
Huaying City, Sichuan
|
For Education
|
81,549
|
July 2002
|
|||||
China registered (2004)
No. 1505
|
Allocated
|
Shanhe Duan, Guanghua St.
Huaying City, Sichuan
|
For Education & Dormitory
|
7,911
|
November 2004
|
Year Ended August 31, 2012
|
High Price
|
Low Price
|
||||||
1
st
Quarter Ended November 30, 2011
|
$
|
2.65
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$
|
0.51
|
||||
2
nd
Quarter Ended February 28, 2012
|
$
|
2.25
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$
|
0.55
|
||||
3
rd
Quarter Ended May 31, 2012
|
$
|
1.05
|
$
|
0.31
|
||||
4
th
Quarter Ended August 31, 2012
|
$
|
1.03
|
$
|
0.51
|
Year Ended August 31, 2011
|
High Price
|
Low Price
|
||||||
1
st
Quarter Ended November 30, 2010
|
$
|
4.40
|
$
|
3.04
|
||||
2
nd
Quarter Ended February 28, 2011
|
$
|
4.00
|
$
|
2.50
|
||||
3
rd
Quarter Ended May 31, 2011
|
$
|
3.82
|
$
|
1.30
|
||||
4
th
Quarter Ended August 31, 2011
|
$
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3.25
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$
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1.05
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·
|
Highlights and Executive Summary
|
·
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Results of Operations—an analysis of the Company’s consolidated results of operations, for the period presented in the consolidated financial statements
|
·
|
Liquidity and Capital Resources—an analysis of the effect of the Company’s operating, financing and investing activities on the Company’s liquidity and capital resources
|
·
|
Off-Balance Sheet Arrangements—a discussion of such commitments and arrangements
|
·
|
Critical Accounting Policies and Estimates—a discussion of accounting policies that require significant judgments and estimates
|
Years Ended
August 31,
|
||||||||
2012
|
2011
|
|||||||
(Unaudited)
|
||||||||
Cash at beginning of period
|
$
|
15,090,521
|
$
|
10,891,487
|
||||
Net cash provided by operating activities
|
26,205,622
|
15,648,064
|
||||||
Net cash used in investing activities
|
(963,997)
|
(19,475,434)
|
||||||
Net cash provided by (used in) financing activities
|
(10,004,901)
|
8,420,939
|
||||||
Effect of exchange rate changes on cash
|
83,738
|
(394,535
|
)
|
|||||
Cash at end of period
|
$
|
30,410,983
|
$
|
15,090,521
|
August 31,
2012
|
August 31,
2011
|
|||||||
ASSETS
|
||||||||
CURRENT ASSETS:
|
||||||||
Cash and cash equivalents
|
$
|
30,410,983
|
$
|
15,090,521
|
||||
Inventory
|
-
|
3,489
|
||||||
Other current assets
|
4,078,038
|
9,606,682
|
||||||
Total Current Assets
|
34,489,021
|
24,700,692
|
||||||
LONG-TERM ASSETS:
|
||||||||
Property, plant and equipment, net
|
82,250,434
|
84,120,568
|
||||||
Land use rights, net
|
48,118,088
|
48,950,660
|
||||||
Deposit paid for long-term assets
|
-
|
18,778
|
||||||
Total Long-Term Assets
|
130,368,522
|
133,090,006
|
||||||
TOTAL ASSETS
|
$
|
164,857,543
|
$
|
157,790,698
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||
CURRENT LIABILITIES:
|
||||||||
Accounts payable
|
$
|
165,743
|
$
|
48,824
|
||||
Short-term payable-acquisition
|
32,721,915
|
22,560,426
|
||||||
Due to related parties
|
4,550,762
|
7,842,522
|
||||||
Other Payables
|
951,468
|
333,202
|
||||||
Refundable deposits
|
134,661
|
795,848
|
||||||
Deferred school fees
|
45,902,425
|
39,498,972
|
||||||
Home purchase down payment
|
919,458
|
878,668
|
||||||
Short-term bank loan
|
-
|
15,685,044
|
||||||
Accrued expenses and other current liabilities
|
1,026,225
|
908,268
|
||||||
Total Current Liabilities
|
86,372,657
|
88,551,774
|
||||||
LONG-TERM LIABILITIES:
|
||||||||
Long-term bank loan
|
11,045,539
|
-
|
||||||
Long-term payable-acquisition
|
14,808,754
|
26,602,306
|
||||||
TOTAL LIABILITIES
|
112,226,950
|
115,154,080
|
||||||
STOCKHOLDERS’ EQUITY:
|
||||||||
Common Stock, $0.001par value; 75,000,000 shares authorized; 30,069,629, 30,014,528 issued and outstanding as of August 31, 2012 and 2011
|
30,070
|
30,015
|
||||||
Additional paid in capital
|
163,389
|
67,421
|
||||||
Retained earnings
|
49,746,368
|
40,100,740
|
||||||
Accumulated other comprehensive income
|
2,690,766
|
2,438,442
|
||||||
TOTAL STOCKHOLDERS’ EQUITY
|
52,630,593
|
42,636,618
|
||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$
|
164,857,543
|
$
|
157,790,698
|
For the Years Ended
August 31,
|
||||||||
2012
|
2011
|
|||||||
(Unaudited ) | ||||||||
REVENUES
|
42,200,354 | 25,419,516 | ||||||
COST OF REVENUES
|
23,839,738 | 10,172,606 | ||||||
GROSS PROFIT
|
18,360,616 | 15,246,910 | ||||||
OPERATING EXPENSES
|
||||||||
General and Administrative Expenses
|
3,140,188 | 1,745,189 | ||||||
TOTAL OPERATING EXPENSES
|
3,140,188 | 1,745,189 | ||||||
INCOME FROM OPERATIONS
|
15,220,428 | 13,501,721 | ||||||
OTHER INCOME (EXPENSE)
|
||||||||
Interest Income
|
56,605 | 26,604 | ||||||
Interest Expense
|
(5,631,405 | ) | (95,571 | ) | ||||
NET INCOME BEFORE INCOME TAXES
|
$ | 9,645,628 | $ | 13,432,754 | ||||
INCOME TAX EXPENSE
|
- | - | ||||||
NET INCOME
|
$ | 9,645,628 | $ | 13,432,754 | ||||
Earnings per Common Share:
|
||||||||
Basic
|
$ | 0.32 | $ | 0.45 | ||||
Diluted
|
$ | 0.32 | $ | 0.45 | ||||
Weighted Average Common Shares Outstanding:
|
||||||||
Basic
|
30,094,205 | 30,010,932 | ||||||
Diluted
|
30,094,205 | 30,010,932 |
For the Eight Months Ended August 31,2011
|
For the Year Ended December 31, 2010
|
|||||||
|
|
|||||||
REVENUES
|
$ | 17,297,051 | $ | 24,367,395 | ||||
COST OF REVENUES
|
6,558,876 | 10,841,190 | ||||||
GROSS PROFIT
|
10,738,175 | 13,526,205 | ||||||
OPERATING EXPENSES
|
||||||||
General and Administrative Expenses
|
1,214,060 | 1,593,386 | ||||||
TOTAL OPERATING EXPENSES
|
1,214,060 | 1,593,386 | ||||||
INCOME FROM OPERATIONS
|
9,524,115 | 11,932,819 | ||||||
OTHER INCOME (EXPENSE)
|
||||||||
Interest Income
|
15,516 | 33,262 | ||||||
Interest Expense
|
(95,571 | ) | - | |||||
NET INCOME BEFORE INCOME TAXES
|
9,444,060 | 11,966,081 | ||||||
INCOME TAX EXPENSE
|
- | - | ||||||
NET INCOME
|
$ | 9,444,060 | $ | 11,966,081 | ||||
Earnings per Common Share:
|
||||||||
Basic
|
$ | 0.31 | $ | 0.43 | ||||
Diluted
|
$ | 0.31 | $ | 0.43 | ||||
Weighted Average Common Shares Outstanding:
|
||||||||
Basic
|
30,008,014 | 28,044,698 | ||||||
Diluted
|
30,008,014 | 28,044,698 | ||||||
For the Years Ended
August 31,
|
||||||||
2012
|
2011
|
|||||||
(Unaudited ) | ||||||||
NET INCOME
|
$
|
9,645,628
|
$
|
13,432,754
|
||||
Foreign currency translation, net of tax
|
252,324
|
1,699,817
|
||||||
COMPREHENSIVE INCOME
|
$
|
9,897,952
|
$
|
15,132,571
|
For the Eight Months Ended August 31,2011
|
For the Year Ended December 31, 2010
|
|||||||
|
|
|||||||
NET INCOME
|
$ | 9,444,060 | $ | 11,966,081 | ||||
Foreign currency translation, net of tax
|
1,432,623 | 801,583 | ||||||
COMPREHENSIVE INCOME
|
$ | 10,876,683 | $ | 12,767,664 |
Accumulated
|
||||||||||||||||||||||||
Additional
|
Other
|
Total
|
||||||||||||||||||||||
Common Stock
|
Paid-In
|
Comprehensive
|
Retained
|
Stockholders'
|
||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Income
|
Earnings
|
Equity (Deficit)
|
|||||||||||||||||||
Balance, December 31, 2009
|
26,100,076
|
$
|
26,100
|
$
|
23,900
|
$
|
204,236
|
$
|
18,690,599
|
$
|
18,944,835
|
|||||||||||||
Recapitalization
|
3,899,929
|
3,900
|
(3,900
|
)
|
-
|
-
|
-
|
|||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
801,583
|
-
|
801,583
|
||||||||||||||||||
Net Income
|
-
|
-
|
-
|
-
|
11,966,081
|
11,966,081
|
||||||||||||||||||
Balance, December 31, 2010
|
30,000,005
|
$
|
30,000
|
$
|
20,000
|
$
|
1,005,819
|
$
|
30,656,680
|
$
|
31,712,499
|
|||||||||||||
Stock Based Compensation
|
14,523
|
15
|
47,421
|
-
|
-
|
47,436
|
||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
1,432,623
|
-
|
1,432,623
|
||||||||||||||||||
Net Income
|
-
|
-
|
-
|
-
|
9,444,060
|
9,444,060
|
||||||||||||||||||
Balance, August 31, 2011
|
30,014,528
|
$
|
30,015
|
$
|
67,421
|
$
|
2,438,442
|
$
|
40,100,740
|
$
|
42,636,618
|
|||||||||||||
Stock Based Compensation
|
55,101
|
55
|
95,968
|
-
|
-
|
96,023
|
||||||||||||||||||
Foreign currency translation adjustment
|
-
|
-
|
-
|
252,324
|
-
|
252,324
|
||||||||||||||||||
Net Income
|
-
|
-
|
-
|
-
|
9,645,628
|
9,645,628
|
||||||||||||||||||
Balance, August 31, 2012
|
30,069,629
|
$
|
30,070
|
$
|
163,389
|
$
|
2,690,766
|
$
|
49,746,368
|
$
|
52,630,593
|
For The Years
Ended August 31,
|
||||||||
2012
|
2011
|
|||||||
Unaudited
|
||||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$
|
9,645,628
|
$
|
13,432,754
|
||||
Depreciation of property and equipment
|
3,359,844
|
906,701
|
||||||
Amortization of land use rights
|
1,127,377
|
152,319
|
||||||
Stock based compensation
|
105,361
|
105,449
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Adjustments in net cash (used in) provided by operating activities
|
||||||||
Other current assets
|
5,588,956
|
(216,787
|
)
|
|||||
Inventories
|
3,511
|
129,951
|
||||||
Accounts payable
|
116,679
|
(91,023
|
)
|
|||||
Other payables
|
616,545
|
(1,302,400
|
)
|
|||||
Accrued expenses
|
103,663
|
418,063
|
||||||
Refundable deposits
|
(666,277)
|
(743,761
|
)
|
|||||
Deferred school fees
|
6,168,811
|
2,726,856
|
||||||
Home purchase
|
35,524
|
129,942
|
||||||
Net cash provided by (used in) operating activities
|
26,205,622
|
15,648,064
|
||||||
Cash flows from investing activities:
|
||||||||
Deposits - long term assets
|
-
|
(18,230
|
)
|
|||||
Fixed asset additions
|
(963,997
|
)
|
(223,111
|
)
|
||||
Business combination
|
-
|
(16,021,106)
|
||||||
Advances to related parties receivables
|
-
|
(3,212,987)
|
||||||
Net cash used in investing activities
|
(963,997
|
)
|
(19,475,434)
|
|||||
Cash flows from financing activities:
|
||||||||
Payments on acquisition payables
|
(1,928,508
|
)
|
-
|
|||||
(Repayments) of related party loans payables
|
(3,340,423
|
)
|
-
|
|||||
Proceeds debt
|
11,050,596
|
8,420,939
|
||||||
(Repayments) short term debt
|
(15,786,566
|
)
|
-
|
|||||
Net cash provided by (used in) financing activities
|
(10,004,901
|
)
|
8,420,939
|
|||||
Effect of exchange rate changes on cash
|
83,738
|
(394,535
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
15,320,462
|
4,199,034
|
||||||
Cash and cash equivalents, beginning of year
|
15,090,521
|
10,891,487
|
||||||
Cash and cash equivalents, end of year
|
$
|
30,410,983
|
$
|
15,090,521
|
||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for interest
|
$
|
2,211,530
|
$
|
95,571
|
||||
Cash paid for taxes
|
$
|
-
|
$
|
-
|
||||
Non cash investing and financing activities:
|
||||||||
Long-term bank loan
|
$
|
-
|
$
|
-
|
||||
Related party loan
|
$
|
-
|
$
|
7,842,522
|
||||
Short-term bank loan
|
$
|
-
|
$
|
15,685,044
|
||||
Short-term payable – acquisition
|
$
|
-
|
$
|
22,560,426
|
||||
Long-term payable – acquisition
|
$
|
-
|
$
|
26,602,306
|
||||
Deposit-long-term asset transfer to fixed asset
|
$
|
18,230
|
$
|
-
|
For the
Eight
Months Ended
August 31, 2011
|
For the
Year Ended
December 31, 2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 9,444,060 | $ | 11,966,081 | ||||
Depreciation of property and equipment
|
651,674 | 965,795 | ||||||
Amortization of land use rights
|
102,434 | 148,637 | ||||||
Stock based compensation
|
105,449 | 18,000 | ||||||
Changes in operating assets and liabilities:
|
||||||||
Adjustments in net cash (used in) provided by operating activities
|
||||||||
Other current assets
|
(2,515,705 | ) | (845,830 | ) | ||||
Inventories
|
108,421 | (19,948 | ) | |||||
Accounts payable
|
(90,525 | ) | (94,450 | ) | ||||
Other payables
|
(16,873 | ) | 126,057 | |||||
Accrued expenses
|
(64,765 | ) | (234,874 | ) | ||||
Refundable deposits
|
(347,269 | ) | (1,076,964 | ) | ||||
Deferred school fees
|
9,139,176 | (1,712,385 | ) | |||||
Home purchase
|
23,168 | 146,457 | ||||||
Net cash provided by (used in) operating activities
|
16,539,245 | 9,386,576 | ||||||
Cash flows from investing activities:
|
||||||||
Deposits - long term assets
|
(18,389 | ) | (8,618,441 | ) | ||||
Fixed asset additions
|
(225,055 | ) | (191,953 | ) | ||||
Business combination
|
(16,021,106 | ) | - | |||||
Proceeds from related parties receivables
|
- | 3,062,969 | ||||||
Net cash used in investing activities
|
(16,264,550 | ) | (5,747,425 | ) | ||||
Cash flows from financing activities:
|
||||||||
Repayments from related party loans
|
- | (1,215,691 | ) | |||||
Loans-other
|
8,420,939 | - | ||||||
Net cash provided by (used in) financing activities
|
8,420,939 | (1,215,691 | ) | |||||
Effect of exchange rate changes on cash
|
1,081,677 | 122,666 | ||||||
Net increase (decrease) in cash and cash equivalents
|
9,777,311 | 2,546,126 | ||||||
Cash and cash equivalents, beginning of year
|
5,313,210 | 2,767,084 | ||||||
Cash and cash equivalents, end of year
|
$ | 15,090,521 | $ | 5,313,210 | ||||
Supplemental disclosures of cash flow information:
|
||||||||
Cash paid for interest
|
$ | 95,571 | $ | - | ||||
Cash paid for taxes
|
$ | - | $ | - | ||||
Non cash investing and financing activities:
|
||||||||
Related party loan
|
$ | 7,842,522 | $ | - | ||||
Short-term bank loan
|
$ | 15,685,044 | $ | - | ||||
Short-term payable – acquisition
|
$ | 22,560,426 | $ | - | ||||
Long-term payable – acquisition
|
$ | 26,602,306 | $ | - | ||||
Deposit paid for long-term assets
|
$ | (8,782,894 | ) | $ | - |
|
1)
|
RMB 119,782,067 (approximately $18,900,822) to be paid by August 31, 2012, but was paid on September 3, 2012
|
|
|
|
2)
|
RMB 100,000,000 (or RMB 87,589,800, approximately $13,821,094, net of discount) by August 31, 2013, and
|
|
|
|
3)
|
RMB 100,000,000 (or RMB 93,849,000, approximately $14,808,754, net of discount) by August 31, 2014.
|
Subsidiaries
|
State and Countries Registered In
|
% Ownership
|
|||
Kahibah Limited
|
British Virgin Island
|
100 | % | ||
Taiyuan Taiji Industry Development Co., Ltd.
|
People’s Republic of China
|
100 | % | ||
Shanxi Taiji Industrial Development Co., Ltd.(i)
|
People’s Republic of China
|
95 | % | ||
Shanxi Modern Bilingual School (ii)
|
People’s Republic of China
|
100 | % | ||
Sichuan Guang’an Experimental High School (iii)
|
People’s Republic of China
|
100 | % | ||
Shanxi Rising Education Investment Company Ltd. (iv)
|
People’s Republic of China
|
100 | % | ||
Shanxi Rising School (v)
|
People’s Republic of China
|
100 | % |
Twelve Month Period Ended August 31
|
August 31, 2012
|
August 31, 2011
|
||||||
2012
|
$
|
-
|
$
|
36,651,052
|
||||
2013
|
42,898,207
|
1,627,048
|
||||||
2014
|
2,009,646
|
1,220,872
|
||||||
Thereafter
|
994,572
|
-
|
||||||
Total
|
$
|
45,902,425
|
$
|
39,498,972
|
August 31, 2012
|
August 31, 2011
|
|||||||
Course materials
|
$
|
-
|
$
|
-
|
||||
Low consumable items
|
6,524
|
6,485
|
||||||
Low consumable tools
|
$
|
6,524
|
$
|
6,485
|
||||
Less: Inventory provision*
|
(6,524
|
)
|
(2,996)
|
|||||
Total
|
$
|
-
|
$
|
3,489
|
August 31, 2012
|
August 31, 2011
|
|||||||
Cash – individual bank accounts
|
$ | 3,216,850 | $ | 8,734,422 | ||||
Advances to suppliers
|
568,324 | 737,741 | ||||||
Other prepaid
|
- | 66,710 | ||||||
Other receivables
|
292,864 | 67,809 | ||||||
Total
|
$ | 4,078,038 | $ | 9,606,682 |
August 31, 2012
|
August 31, 2011
|
|||||||
Ren Zhiqing (i)
|
$
|
4,550,762
|
$
|
7,842,522
|
||||
Total
|
$
|
4,550,762
|
7,842,522
|
|
(i) Ren Zhiqing is the president and a director of the Company, as well as the majority controlling shareholder of the Company. The amounts due to Ren Zhiqing as of August 31, 2012 and 2011, represent loans to the Company, which are unsecured, interest-free and payable to Ren Zhiqing, primarily used for paying the equity holders of the Investment Company as part of the Equity Transfer Agreement dated August 31, 2011.
|
August 31, 2012
|
August 31, 2011
|
|||||||
Cost of land use rights
|
$
|
50,161,574
|
$
|
49,861,806
|
||||
Less: Accumulated amortization
|
(2,043,486
|
)
|
(911,146
|
)
|
||||
Land use rights, net
|
$
|
48,118,088
|
$
|
48,950,660
|
2013
|
$
|
1,127,377
|
||
2014
|
1,127,377
|
|||
2015
|
1,127,377
|
|||
2016
|
1,127,377
|
|||
2017
|
1,127,377
|
|||
Thereafter
|
42,481,203
|
|||
Total
|
48,118,088
|
August 31, 2012
|
August 31, 2011
|
|||||||
Buildings
|
$
|
83,567,268
|
$
|
82,145,505
|
||||
Transportation equipment
|
1,014,036
|
1,007,976
|
||||||
Furniture & education equipment
|
8,090,748
|
7,988,188
|
||||||
Kitchen equipment
|
963,322
|
957,565
|
||||||
Computer & software
|
872,596
|
867,381
|
||||||
Total cost
|
$
|
94,507,970
|
$
|
92,966,615
|
||||
Less: Accumulated depreciation
|
(12,257,536
|
)
|
(8,846,047
|
)
|
||||
Property and equipment, net
|
$
|
82,250,434
|
$
|
84,120,568
|
Description
|
Useful Lives
|
Buildings
|
40 years
|
Transportation Equipment
|
10 years
|
Kitchen Equipment
|
5 years
|
Furniture, Education Equipment, Computers
|
3 years
|
August 31, 2012
|
August 31, 2011
|
||||||||
Accrued payroll
|
$
|
702,338
|
$
|
624,351
|
|||||
Individual tax withholding
|
7,159
|
6,184
|
|||||||
Other accrued expenses
|
316,728
|
277,733
|
|||||||
Total
|
$
|
1,026,225
|
$
|
908,268
|
For the Years Ended August 31,
|
||||||||
2012
|
2011
|
|||||||
Tax savings
|
$
|
2,411,407
|
3,358,188
|
For the Years Ended August 31,
|
||||||||
2012
|
2011
|
|||||||
Net income before tax provision, as reported
|
$
|
9,645,628
|
$
|
13,432,754
|
||||
Less tax provision exempted
|
(2,411,407
|
)
|
(3,358,188
|
)
|
||||
Pro-forma net income
|
$
|
7,234,221
|
$
|
10,074,566
|
For the
Eight Months Ended August 31, 2011
|
For the
Year Ended December 31, 2010
|
|||||||
Tax savings
|
$
|
2,361,015
|
2,991,520
|
For the
Eight Months Ended August 31, 2011
|
For the
Year Ended
December 31, 2010
|
|||||||
Net income before tax provision, as reported
|
$
|
9,444,060
|
$
|
11,966,081
|
||||
Less tax provision exempted
|
(2,361,015
|
)
|
(2,991,520
|
)
|
||||
Pro-forma net income
|
$
|
7,083,045
|
$
|
8,974,561
|
For The Years
Ended August 31,
|
||||||||
2012
|
2011
|
|||||||
Net income
|
$
|
9,645,628
|
$
|
13,432,754
|
||||
Basic weighted average outstanding shares of common stock
|
30,094,205
|
30,010,932
|
||||||
Diluted weighted average common stock and stock equivalents
|
30,094,205
|
30,010,932
|
||||||
Earnings per share:
|
||||||||
Basic
|
$
|
0.32
|
$
|
0.45
|
||||
Diluted
|
$
|
0.32
|
$
|
0.45
|
For The
Eight Months Ended August 31, 2011
|
For The
Year Ended December 31, 2010
|
|||||||
Net income
|
$
|
9,444,060
|
$
|
11,966,081
|
||||
Basic weighted average outstanding shares of common stock
|
30,008,014
|
28,044,698
|
||||||
Diluted weighted average common stock and stock equivalents
|
30,008,014
|
28,044,698
|
||||||
Earnings per share:
|
||||||||
Basic
|
$
|
0.31
|
$
|
0.43
|
||||
Diluted
|
$
|
0.31
|
$
|
0.43
|
|
1)
|
RMB 119,782,067 (approximately $18,900,822) to be paid by August 31, 2012, but was paid on September 3rd, 2012
|
|
|
|
2)
|
RMB 100,000,000 (or RMB 87,589,800, approximately $13,821,094, net of discount) by August 31, 2013, and
|
|
|
|
3)
|
RMB 100,000,000 (or RMB 93,849,000, approximately $14,808,754, net of discount) by August 31, 2014.
|
For the Year Ended
August 31, 2011
|
||||
(in thousands, except for earnings per share data)
|
(Unaudited)
|
|||
Sales
|
$
|
32,625
|
||
Net income
|
$
|
12,693
|
||
Earnings per share, basic and diluted
|
$
|
0.42
|
August 31, 2011 | August 31, 2011 | |||||||||||
As Reported | Correction | As Adjusted | ||||||||||
ASSETS | ||||||||||||
CURRENT ASSETS:
|
||||||||||||
Cash and cash equivalents
|
$ | 15,090,521 | $ |
-
|
$ | 15,090,521 | ||||||
Inventory
|
3,489 |
-
|
3,489 | |||||||||
Due from related parties
|
- |
-
|
- | |||||||||
Other current assets
|
9.606,682 |
-
|
9,606,682 | |||||||||
Total Current Assets
|
24,700,692 |
-
|
24,700,692 | |||||||||
|
|
|||||||||||
LONG-TERM ASSETS:
|
|
|
||||||||||
Property, plant and equipment, net
|
81,958,342 | 2,162,226 | 84,120,568 | |||||||||
Land use rights, net
|
45,783,579 | 3,167,081 | 48,950,660 | |||||||||
Deposit paid for long-term assets
|
18,778 |
-
|
18,778 | |||||||||
Total Long-Term Assets
|
127,760,699 | 5,329,307 | 133,090,006 | |||||||||
|
|
|||||||||||
TOTAL ASSETS
|
$ | 152,461,391 | $ | 5,329,307 | $ | 157,790,698 |
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
||||||||||||
CURRENT LIABILITIES:
|
|
|
||||||||||
Accounts Payable
|
$ | 48,824 |
-
|
$ | 48,824 | |||||||
Short-term payable-acquisition
|
21,177,319 | 1,383,107 | 22,560,426 | |||||||||
Due to related parties
|
7,842,522 |
-
|
7,842,522 | |||||||||
Other Payables
|
333,202 |
-
|
333,202 | |||||||||
Refundable deposits
|
795,848 |
-
|
795,848 | |||||||||
Prepaid School Fees
|
39,498,972 |
-
|
39,498,972 | |||||||||
Home purchase down payment
|
878,668 |
-
|
878,668 | |||||||||
Short-term bank loan
|
15,685,044 |
-
|
15,685,044 | |||||||||
Accrued expenses and other current liabilities
|
908,268 |
-
|
908,268 | |||||||||
Total Current Liabilities
|
87,168,667 | 1,383,107 | 88,551,774 | |||||||||
|
|
|
||||||||||
LONG-TERM LIABILITIES:
|
|
|
|
|||||||||
Long-term bank loan
|
$ |
|
$ |
|
$ | - | ||||||
Long-term payable-acquisition
|
22,656,106 | 3,946,200 | 26,602,306 | |||||||||
|
|
|
||||||||||
TOTAL LIABILITIES
|
109,824,773 | 3,946,200 | 115,154,080 | |||||||||
|
|
|
||||||||||
STOCKHOLDERS’ EQUITY:
|
|
|
|
|||||||||
Common Stock, $0.001par value; 75,000,000 shares authorized; 30,069,624, 30,014,528 issued and outstanding as of August 31, 2012 and 2011
|
30,015 |
-
|
30,015 | |||||||||
Additional paid in capital
|
67,421 |
-
|
67,421 | |||||||||
Retained earnings
|
40,100,740 |
-
|
40,100,740 | |||||||||
Accumulated other comprehensive income
|
2,438,442 |
-
|
2,438,442 | |||||||||
|
-
|
|
||||||||||
TOTAL STOCKHOLDERS’ EQUITY
|
42,636,618 | - | 42,636,618 | |||||||||
|
|
|
||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
|
$ | 152,461,391 | 5,329,307 | $ | 157,790,698 |
·
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the company;
|
·
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
|
·
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company's assets that could have a material effect on the financial statements.
|
Name
|
Age
|
Positions with the Company
|
||
Dr. Ren Zhiqing
|
55
|
Chairman and Chief Executive Officer
|
||
Pan Mingxiao
|
36
|
Executive Vice President and Director
|
||
Ren Xudong
|
29
|
Vice President and Secretary
|
||
Michael Toups
|
47
|
Chief Financial Officer
|
||
Dora Dong
|
52
|
Director
|
||
Dr. Jun Zhang
|
48
|
Director
|
||
Ying Fengmei
|
59
|
Director
|
Name and Principal Position
|
Year
|
Salary
($)(1)
|
Bonus
($)
|
Stock Awards
($)*
|
Option
Awards
($)
|
Nonequity Incentive Plan Compensation ($)
|
All Other Compensation ($)
|
Total
($)
|
|||||||||||||||
Ren Zhiqing
|
2012
|
$
|
9,472
|
-
|
-
|
-
|
-
|
-
|
$
|
9,472
|
|||||||||||||
Chief Executive Officer and Chairman of the Board
|
2011
|
$
|
9,136
|
-
|
-
|
-
|
-
|
-
|
$
|
9,136
|
|||||||||||||
Pan Mingxiao
|
2012
|
$
|
9,472
|
-
|
-
|
-
|
-
|
-
|
$
|
9,472
|
|||||||||||||
Executive Vice-President and Director
|
2011
|
$
|
9,136
|
-
|
-
|
-
|
-
|
-
|
$
|
9,136
|
|||||||||||||
Ren Xudong
|
2012
|
$
|
9,472
|
-
|
-
|
-
|
-
|
-
|
$
|
9,472
|
|||||||||||||
Vice President and Secretary
|
2011
|
$
|
9,136
|
-
|
-
|
-
|
-
|
-
|
$
|
9,136
|
|||||||||||||
Michael Toups (2)
|
2012
|
$
|
72,000
|
-
|
72,000
|
-
|
-
|
-
|
$
|
144,000
|
|||||||||||||
Chief Financial Officer
|
2011
|
$
|
48,000
|
-
|
48,000
|
-
|
-
|
-
|
$
|
96,000
|
(1)
|
The Company pays salaries in RMB to all executive officers on a monthly basis, except its USA-based CFO is paid monthly in US dollars. The RMB amount is translated into US dollars when the Company files SEC documents. The exchange rates used were the average rates of for the fiscal years ended August 31, 2012 and 2011 (twelve months), which were 6.3345 and 6.5673, respectively.
|
(2)
|
Mr. Toups’ compensation is $6,000 per month cash compensation and $6,000 per month stock compensation in restricted common shares, which vest on a quarterly basis. During the twelve months ended August 31, 2012, Mr. Toups earned and was vested in 88,240 shares of restricted common stock as part of his consideration. As of August 31, 2012, the Company has accrued 74,067 shares of restricted common stock to be issued to Mr. Toups.
|
Outstanding Equity Awards At Fiscal Year-End
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
OPTION AWARDS
|
STOCK AWARDS
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Name
|
Number
of
Securities
Underlying
Unexercised
Options (#)
exercisable
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Earned
Options (#)
unexercisable
|
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options(#)
|
Option
Exercise
Price ($)
|
Option
Expiration
Date
|
Number of
Shares or
Units of
Stock that
have not Vested (#)
|
Market
Value of
Shares or
Units of
Stock that
have not Vested ($)
|
Equity Incentive
Plan Awards:
Number of
Unearned Shares,
Units or
Other
Rights that
have not
Vested (#)
|
Equity Incentive
Plan Awards:
Market or
Payout Value
of Unearned
Shares, Units
or other
Rights that
have not
Vested ($)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||
Ren Zhiqing
|
-
|
-
|
-
|
$
|
-
|
-
|
-
|
$
|
-
|
-
|
$
|
-
|
||||||||||||||||||||||||||||||||||||||||||||||||||
Pan Mingxiao
|
-
|
-
|
-
|
$
|
-
|
-
|
-
|
$
|
-
|
-
|
$
|
-
|
||||||||||||||||||||||||||||||||||||||||||||||||||
Ren Xudong
|
-
|
-
|
-
|
$
|
-
|
-
|
-
|
$
|
-
|
-
|
$
|
-
|
||||||||||||||||||||||||||||||||||||||||||||||||||
Michael Toups(1)
|
-
|
-
|
-
|
$
|
-
|
-
|
-
|
$
|
-
|
-
|
$
|
-
|
·
|
Each shareholder who beneficially owns more than 5% of our common;
|
·
|
Each of our named executive officers;
|
·
|
Each of our directors; and
|
·
|
Executive officers and directors as a group.
|
Name and Address of Beneficial Owner(1)
|
Amount and Nature
of Beneficial
Ownership
|
Percentage
of Class (1)
|
||||||
Ren Zhiqing
|
20,400,000
|
67.6%
|
||||||
Pan Mingxiao
|
1,499,997
|
5.0%
|
||||||
Ren Xudong
|
1,470,001
|
4.9%
|
||||||
Michael Toups (2)
|
113,614
|
*
|
||||||
Dora Dong (3)
|
13,602
|
*
|
||||||
Dr. Jun Zhang (4)
|
13,602
|
*
|
||||||
Ying Fengmei (5)
|
1,389
|
*
|
||||||
All such directors and executive officers as a group (8 persons)
|
23,512,205
|
77.9%
|
(1)
|
All shares are owned of record and beneficially. Total shares outstanding were 30,069,629 as of November 28, 2012, (plus accrued shares of 110,916 equal total shares of 30,180,545). Except as otherwise noted, each shareholder’s address is c/o China Bilingual Technology & Education Group Inc., No. 2 Longbao Street, Xiodian Zone, Taiyuan City, Shanxi Province, China 030031.
|
(2)
|
Pursuant to his previous agreement with the Company, Michael Toups shall receive $6,000 per month in consideration for his services as Chief Financial Officer of the Company. In addition, Mr. Toups is entitled to receive a stock award of $72,000 in shares of the Company's common stock, which vest on a quarterly basis. The Company has issued 39,547 shares of common stock to Mr. Toups as compensation for his service tendered and has accrued an additional 74,067 shares of common stock as of August 31, 2012.
|
(3)
|
Pursuant to her previous agreement with the Company, Dora Dong shall receive $9,000 annually in consideration of her services as an independent director. In addition, Ms. Dong is entitled to receive a stock award of $9,000 per annum in shares of the Company's common stock, which vest on a quarterly basis. The Company has issued 4,344 shares of common stock to Ms. Dong as compensation for her service tendered and has accrued an additional 9,258 shares of common stock as of August 31, 2012.
|
(4)
|
Pursuant to his previous agreement with the Company, Dr. Jun Zhang shall receive $9,000 annually in consideration of his services as an independent director. In addition, Dr. Zhang is entitled to receive a stock award of $9,000 per annum in shares of the Company's common stock, which vest on a quarterly basis. The Company has issued 4,344 shares of common stock to Dr. Zhang as compensation for his service tendered and has accrued an additional 9,258 shares of common stock as of August 31, 2012.
|
(5)
|
The Company issued 1,389 shares of common stock to Ying Fengmei as compensation for her services rendered to the Company for the last quarter of 2010 and the first quarter of 2011. Ms. Ying currently does not receive any restricted common stock for her services.
|
August 31, 2012
|
August 31, 2011
|
|||||||
Ren Zhiqing (i)
|
$
|
4,550,762
|
$
|
7,842,522
|
||||
Total
|
$
|
4,550,762
|
$ |
7,842,522
|
(i)
|
Ren Zhiqing is the president and a director of the Company, as well as the majority controlling shareholder of the Company. The amounts due to Ren Zhiqing as of August 31, 2012 and 2011 represent loans to the Company, which are unsecured, interest-free and payable to Ren Zhiqing. The amount due to Ren Zhiqing as of August 31, 2012 and 2011 represents a loan to the Company primarily used for paying the equity holders of the Investment Company as part of the Equity Transfer Agreement dated August 31, 2011.
|
Exhibit No.
|
Description
|
|
3.1
|
Articles of Incorporation (Incorporated by reference to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on September 24, 2009).
|
|
3.2
|
By-Laws (Incorporated by reference to the Registrant’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on September 24, 2009).
|
|
10.1
|
Agreement and Plan of Merger dated June 30, 2010 (filed with 8-K filed on July 2, 2010 and incorporated herein by reference)
|
|
10.2
|
Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations dated June 30, 2010. (filed with 8-K filed on July 2, 2010 and incorporated herein by reference)
|
|
10.3
|
Consulting Agreement between China Bilingual Technology & Education Group Inc. and Michael Toups, dated September 16, 2011 (filed with 8-K filed on October 27, 2011 and incorporated herein by reference)
|
|
10.4
|
Equity Transfer Agreement, dated August 31, 2011, by and between the Company and all the equity holders of Shanxi Rising Education Investment Co., Ltd.(filed with Current Report on Form 8-K on September 9, 2011 and incorporated herein by reference)
|
|
10.5
|
Loan Agreement, dated August 16, 2011, by and between Shanxi Taiji and Shanxi Trust Co., Ltd.
(filed with Annual Report on Form 10-K on November 29, 2011 and incorporated herein by reference)
|
|
EX-101.INS
|
XBRL Instance Document *
|
|
EX-101.SCH
|
XBRL Taxonomy Extension Schema Document*
|
|
EX-101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase*
|
|
EX-101.DEF
|
XBRL Taxonomy Extension Definition Linkbase*
|
|
EX-101.LAB
|
XBRL Taxonomy Extension Labels Linkbase*
|
|
EX-101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase*
|
China Bilingual Technology & Education Group Inc.
|
|||
November 29, 2012
|
By:
|
/s/ Ren Zhiqing
|
|
Ren Zhiqing
|
|||
Chief Executive Officer
(Principal Executive Officer)
|
|||
November 29, 2012
|
By:
|
/s/ Michael Toups
|
|
Michael Toups
|
|||
Chief Financial Officer
(Principal Financial Officer)
|
Signature
|
Title
|
Date
|
||
/s/ Ren Zhiqing
|
Chief Executive Officer and Chairman
(Principal Executive Officer)
|
November 29, 2012
|
||
Ren Zhiqing
|
||||
/s/ Pan Mingxiao
|
Executive Vice-President and Director
|
November 29, 2012
|
||
Pan Mingxiao
|
||||
/s/ Michael Toups
|
Chief Financial Officer
(Principal Financial Officer)
|
November 29, 2012
|
||
Michael Toups
|
||||
/s/ Dora Dong
|
Director
|
November 29, 2012
|
||
Dora Dong
|
||||
/s/ Dr. Jun Zhang
|
Director
|
November 29, 2012
|
||
Dr. Jun Zhang
|
||||
/s/ Ying Fengmei
|
Director
|
November 29, 2012
|
||
Ying Fengmei
|
||||
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