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Share Name | Share Symbol | Market | Type |
---|---|---|---|
China Carbon Graphite Group Inc (CE) | USOTC:CHGI | 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% | 0.0001 | 0.00 | 01:00:00 |
Nevada
|
98-0550699
|
|
(State or other jurisdiction of
incorporation of organization)
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
|
o
|
Accelerated filer
|
o
|
Non-accelerated filer
(Do not check if smaller reporting company)
|
o
|
Smaller reporting company
|
x
|
PART I - FINANCIAL INFORMATION
|
Page
No.
|
|
Item 1.
|
Financial Statements:
|
1
|
Condensed Consolidated Balance Sheets at September 30, 2012 (unaudited) and December 31, 2011
|
1
|
|
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the Three and Nine Months Ended September 30, 2012 and 2011
|
2
|
|
Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011
|
3
|
|
Notes to Unaudited Condensed Consolidated Financial Statements
|
4
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
31
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
48
|
Item 4.
|
Controls and Procedures
|
49
|
PART II - OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
50
|
Item 1A.
|
Risk Factors
|
50
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
51
|
Item 3.
|
Defaults Upon Senior Securities
|
51
|
Item 4.
|
Mine Safety Disclosures
|
51
|
Item 5.
|
Other Information
|
52
|
Item 6.
|
Exhibits
|
52
|
Signatures
|
53
|
Item 1.
|
Financial Statements.
|
September 30, 2012
|
December 31, 2011
|
|||||||
ASSETS
|
||||||||
(
Unaudited)
|
(
Audited)
|
|||||||
Current Assets
|
||||||||
Cash and cash equivalents
|
$ | 119,885 | $ | 521,450 | ||||
Restricted cash
|
13,364,400 | 11,694,820 | ||||||
Accounts receivable, Net
|
11,812,372 | 12,541,321 | ||||||
Notes receivable
|
33,566 | 188,880 | ||||||
Advance to suppliers
|
2,556,244 | 5,921,970 | ||||||
Inventories
|
47,867,399 | 37,430,248 | ||||||
Prepaid expenses
|
74,017 | 452,730 | ||||||
Other receivables, net of allowance of $24,661
|
565,656 | 513,000 | ||||||
Total current assets
|
76,393,539 | 69,264,419 | ||||||
Property And Equipment, Net
|
35,643,025 | 36,719,595 | ||||||
Construction In Progress
|
7,973,865 | 6,414,847 | ||||||
Land Use Rights, Net
|
10,414,822 | 10,699,059 | ||||||
Total Assets
|
$ | 130,425,251 | $ | 123,097,920 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current Liabilities
|
||||||||
Accounts payable and accrued expenses
|
$ | 4,699,301 | $ | 1,340,498 | ||||
Advance from customers
|
1,330,935 | 1,360,989 | ||||||
Short term bank loans
|
32,774,600 | 45,488,600 | ||||||
Notes payable
|
24,342,300 | 16,763,100 | ||||||
Other payables
|
2,655,742 | 3,227,067 | ||||||
Loan from unrelated parties
|
2,215,217 | - | ||||||
Dividends payable
|
42,279 | 28,099 | ||||||
Total current liabilities
|
68,060,374 | 68,208,353 | ||||||
Amount Due To A Related Party
|
6,270,940 | 5,542,855 | ||||||
Long Term Bank Loan
|
4,741,180 | - | ||||||
Warrant Liabilities
|
396,651 | 174,805 | ||||||
Total Liabilities
|
79,469,145 | 73,926,013 | ||||||
Redeemable convertible series B preferred stock, $0.001 par value;
|
||||||||
3,000,000 shares authorized; 300,000 and 426,110 shares issued
|
||||||||
and outstanding at September 30, 2012 and December 31, 2011, respectively.
|
360,000 | 511,332 | ||||||
Stockholders' Equity
|
||||||||
Common stock, $0.001 par value; 100,000,000 shares authorized
|
||||||||
24,212,518 and 22,981,408 shares issued and outstanding at
|
||||||||
September 30, 2012 and December 31, 2011, respectively
|
24,212 | 22,981 | ||||||
Additional paid-in capital
|
18,158,294 | 17,054,045 | ||||||
Accumulated other comprehensive income
|
8,461,994 | 7,943,542 | ||||||
Retained earnings
|
23,951,606 | 23,640,007 | ||||||
Total stockholders' equity
|
50,596,106 | 48,660,575 | ||||||
Total Liabilities and Stockholders' Equity
|
$ | 130,425,251 | $ | 123,097,920 |
Three months ended September 30,
|
Nine months ended September 30,
|
||||||||||||||||
2012
|
2011
|
2012
|
2011
|
||||||||||||||
Sales
|
$ | 6,491,133 | $ | 13,591,978 | $ | 28,429,886 | $ | 37,200,337 | |||||||||
Cost of Goods Sold
|
4,722,151 | 10,515,933 | 20,850,882 | 28,855,956 | |||||||||||||
Gross Profit
|
1,768,982 | 3,076,045 | 7,579,004 | 8,344,381 | |||||||||||||
Operating Expenses
|
|||||||||||||||||
Selling expenses
|
64,487 | 51,223 | 140,437 | 158,398 | |||||||||||||
General and administrative
|
1,056,283 | 1,316,048 | 3,078,144 | 3,919,776 | |||||||||||||
Depreciation and amortization
|
56,198 | 97,832 | 160,028 | 191,586 | |||||||||||||
Total operating expenses
|
1,176,968 | 1,465,103 | 3,378,609 | 4,269,760 | |||||||||||||
Operating Income Before Other Income (Expense)
|
592,014 | 1,610,942 | 4,200,395 | 4,074,621 | |||||||||||||
Other Income (Expense)
|
|||||||||||||||||
Interest expense
|
(1,208,969 | ) | (957,434 | ) | (3,658,844 | ) | (2,364,238 | ) | |||||||||
Other expense
|
272 | - | (215,196 | ) | - | ||||||||||||
Other income, net
|
6,080 | 14,118 | 221,270 | 89,902 | |||||||||||||
Change in fair value of warrants
|
(188,046 | ) | 508 | (221,846 | ) | 83,200 | |||||||||||
Total other expense
|
(1,390,663 | ) | (942,808 | ) | (3,874,616 | ) | (2,191,136 | ) | |||||||||
Net Income (Loss)
|
$ | (798,649 | ) | $ | 668,134 | $ | 325,779 | $ | 1,883,485 | ||||||||
Dividend Distribution
|
(4,537 | ) | (13,525 | ) | (14,180 | ) | (21,654 | ) | |||||||||
Net Income (Loss) Available To Common Shareholders
|
$ | (803,186 | ) | $ | 654,609 | $ | 311,599 | $ | 1,861,831 | ||||||||
Other Comprehensive Income (Loss)
|
|||||||||||||||||
Foreign currency translation gain
|
528,509 | 508,300 | 518,452 | 1,329,748 | |||||||||||||
Total Comprehensive Income (Losss)
|
$ | (270,140 | ) | $ | 1,176,434 | $ | 844,231 | $ | 3,213,233 | ||||||||
Share Data
|
|||||||||||||||||
Basic earnings (loss) per share
|
$ | (0.03 | ) | $ | 0.03 | $ | 0.01 | $ | 0.08 | ||||||||
Diluted earnings (loss) per share
|
$ | (0.03 | ) | $ | 0.03 | $ | 0.01 | $ | 0.08 | ||||||||
Weighted average common shares outstanding,
basic
|
24,260,834 | 22,307,980 | 23,843,306 | 22,231,842 | |||||||||||||
|
|||||||||||||||||
Weighted average common shares outstanding,
diluted
|
24,560,834 | 22,749,990 | 24,143,306 | 22,766,260 |
Nine months ended September 30,
|
||||||||
2012
|
2011
|
|||||||
Cash flows from operating activities
|
||||||||
Net Income
|
$ | 325,779 | $ | 1,883,485 | ||||
Adjustments to reconcile net cash provided by
operating activities
|
||||||||
Depreciation and amortization
|
1,925,159 | 1,328,990 | ||||||
Related party interest expenses contribution
|
344,401 | - | ||||||
Stock compensation
|
512,158 | 980,800 | ||||||
Change in fair value of warrants
|
221,846 | (83,200 | ) | |||||
Change in operating assets and liabilities
|
||||||||
Accounts receivable
|
858,426 | (5,507,003 | ) | |||||
Notes receivable
|
156,266 | (10,951 | ) | |||||
Other receivable
|
(46,790 | ) | (2,075,385 | ) | ||||
Advance to suppliers
|
3,405,974 | (1,866,969 | ) | |||||
Inventories
|
(9,963,519 | ) | (6,664,546 | ) | ||||
Prepaid expenses
|
1,906 | 231,613 | ||||||
Accounts payable and accrued liabilities
|
3,460,160 | (2,682,072 | ) | |||||
Advance from customers
|
(44,443 | ) | 3,027,518 | |||||
Taxes payable
|
(760,615 | ) | - | |||||
Other payables
|
141,370 | 1,521,693 | ||||||
Net cash provided by (used in) operating activities
|
538,078 | (9,916,027 | ) | |||||
Cash flows from investing activities
|
||||||||
Acquisition of property and equipment
|
(65,156 | ) | (27,265 | ) | ||||
Construction in progress
|
(1,479,435 | ) | (7,110,556 | ) | ||||
Net cash used in investing activities
|
(1,544,591 | ) | (7,137,821 | ) | ||||
Cash flows from financing activities
|
||||||||
Proceeds from issuing common stock
|
472,000 | 160,000 | ||||||
Proceeds from warrants exercise
|
- | 371,714 | ||||||
Dividends paid for series B preferred stock
|
- | (32,996 | ) | |||||
Proceeds from short-term bank loans
|
37,256,400 | 44,534,900 | ||||||
Payment to short-term bank loans
|
(50,370,400 | ) | (33,824,950 | ) | ||||
Proceeds from long-term bank loans
|
4,708,400 | - | ||||||
Proceeds from loans from unrelated parties
|
11,351,261 | - | ||||||
Payment of loans from unrelated parties
|
(9,151,360 | ) | - | |||||
Payments to an related party
|
(158,000 | ) | - | |||||
Proceeds from an related party
|
821,600 | 1,327,928 | ||||||
Proceeds from stock not yet issued
|
(137,000 | ) | - | |||||
Restricted cash
|
(1,532,600 | ) | (14,392,940 | ) | ||||
Proceeds from notes payable
|
35,234,000 | 19,647,750 | ||||||
Payment to notes payable
|
(27,887,000 | ) | - | |||||
Net cash provided by financing activities
|
607,301 | 17,791,406 | ||||||
Effect of exchange rate fluctuation
|
(2,353 | ) | 17,369 | |||||
Net increase (decrease) in cash
|
(401,565 | ) | 754,927 | |||||
Cash and cash equivalents at beginning of period
|
521,450 | 296,311 | ||||||
Cash and cash equivalents at end of period
|
$ | 119,885 | $ | 1,051,238 | ||||
Supplemental disclosure of cash flow information
|
||||||||
Interest paid
|
$ | 3,358,169 | $ | 2,364,238 | ||||
Non-cash activities:
|
||||||||
Preferred stock conversion to common stock
|
$ | 151 | $ | 813 | ||||
Reclassfication of warrant liability with equity
|
$ | - | $ | 14,993 | ||||
Issuance of common stock for compensation
|
$ | 135,350 | $ | 1,787,600 |
1.
|
10% of after tax income to be allocated to a statutory surplus reserve until the reserve amounts to 50% of the company’s registered capital.
|
2.
|
If the
cumulative
balance of statutory surplus reserve is not enough to make up the Company’s cumulative prior years’ losses, the current year’s after tax income should be first used to make up the losses before the statutory surplus reverse is drawn.
|
3.
|
Allocation can be made to the discretionary surplus reserve, if such a reserve is approved at the meeting of the equity owners.
|
Buildings
|
25 - 40 years
|
Machinery and equipment
|
10 - 20 years
|
Motor vehicles
|
5 years
|
●
|
Level 1 inputs to the valuation methodology are quoted prices (unadjusted) 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 assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.
|
●
|
Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.
|
September 30,
2012
(unaudited)
|
December 31, 2011
|
|||||||
2007 Warrants
|
||||||||
Annual dividend yield
|
-
|
-
|
||||||
Expected life (years)
|
0.29
|
1.04
|
||||||
Risk-free interest rate
|
0.18
|
%
|
0.18
|
%
|
||||
Expected volatility
|
128
|
%
|
90
|
%
|
September 30,
2012
(unaudited)
|
December 31, 2011
|
|||||||
2009 Warrants
|
||||||||
Annual dividend yield
|
-
|
-
|
||||||
Expected life (years)
|
1.96
|
2.71
|
||||||
Risk-free interest rate
|
0.18
|
%
|
0.18
|
%
|
||||
Expected volatility
|
128
|
%
|
90
|
%
|
September 30,
2012
(unaudited)
|
December 31, 2011
|
|||||||
2009 Series B Warrants
|
||||||||
Annual dividend yield
|
-
|
-
|
||||||
Expected life (years)
|
2.23
|
2.98
|
||||||
Risk-free interest rate
|
0.18
|
%
|
0.18
|
%
|
||||
Expected volatility
|
128
|
%
|
90
|
%
|
September 30,
2012
(unaudited)
|
December 31, 2011
|
|||||||
2010 Series B Warrants
|
||||||||
Annual dividend yield
|
-
|
-
|
||||||
Expected life (years)
|
2.28
|
3.03
|
||||||
Risk-free interest rate
|
0.18
|
%
|
0.18
|
%
|
||||
Expected volatility
|
128
|
%
|
90
|
%
|
Carrying Value at September 30,
|
Fair Value Measurement at
September 30, 2012
|
|||||||||||||||
2012
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Warrant liability
|
$
|
396,651
|
-
|
-
|
$
|
396,651
|
||||||||||
Notes receivables
|
$
|
33,566
|
$
|
33,566
|
-
|
|||||||||||
Notes payable
|
$
|
24,342,300
|
$
|
24,342,300
|
-
|
Warrants
|
Weighted Average
Exercise Price
|
|||||||
Outstanding as of December 31, 2011
|
1,229,200
|
$
|
1.51
|
|||||
Granted
|
-
|
-
|
||||||
Exercised
|
-
|
-
|
||||||
Cancelled
|
-
|
-
|
||||||
Outstanding as of September 30, 2012
|
1,229,200
|
$
|
1.51
|
September 30, 2012
(unaudited)
|
September 30, 2011
|
|||||||
Weighted average shares of common stock outstanding (basic)
|
23,843,306
|
22,231,842
|
||||||
Shares issuable upon conversion of Series B Preferred Stock
|
300,000
|
442,010
|
||||||
Shares issuable upon exercise of warrants
|
-
|
92,408
|
||||||
Weighted average shares of common stock outstanding (diluted)
|
24,143,306
|
22,766,260
|
||||||
Net income available to common shareholders
|
$
|
311,599
|
$
|
1,861,831
|
||||
Net income per shares of common stock (basic)
|
$
|
0.01
|
$
|
0.08
|
||||
Net income per shares of common stock (diluted)
|
$
|
0.01
|
$
|
0.08
|
September 30, 2012
(unaudited)
|
September 30, 2011
|
|||||||
Weighted average shares of common stock outstanding (basic)
|
24,260,834
|
22,307,980
|
||||||
Shares issuable upon conversion of Series B Preferred Stock
|
300,000
|
442,010
|
||||||
Shares issuable upon exercise of warrants
|
-
|
-
|
||||||
Weighted average shares of common stock outstanding (diluted)
|
24,560,834
|
22,749,990
|
||||||
Net income (loss) available to common shareholders
|
$
|
(803,186
|
)
|
$
|
654,609
|
|||
Net income (loss) per shares of common stock (basic)
|
$
|
(0.03
|
)
|
$
|
0.03
|
|||
Net income (loss) per shares of common stock (diluted)
|
$
|
(0.03
|
)
|
$
|
0.03
|
September 30,
|
||||||||
2012
(unaudited)
|
2011
(unaudited)
|
|||||||
Computed tax at the PRC statutory rate of 15%
|
$
|
235,909
|
$
|
534,872
|
||||
Benefit of tax holiday
|
(235,909
|
)
|
(534,872
|
)
|
||||
Income tax expenses per books
|
$
|
-
|
$
|
-
|
September 30, 2012
(unaudited)
|
December 31, 2011
|
|||||||
Amount outstanding
|
$
|
14,633,174
|
$
|
15,331,983
|
||||
Less: Allowance for doubtful accounts
|
(2,820,802
|
)
|
(2,790,662
|
)
|
||||
Net amount
|
$
|
11,812,372
|
$
|
12,541,321
|
September 30, 2012
(unaudited)
|
December 31, 2011
|
|||||||
Beginning balance
|
$
|
2,790,662
|
$
|
2,505,867
|
||||
Provision for doubtful accounts
|
30,140
|
284,795
|
||||||
Ending balance
|
$
|
2,820,802
|
$
|
2,790,662
|
September 30, 2012
(unaudited)
|
December 31, 2011
|
|||||||
Raw materials
|
$
|
5,576,080
|
$
|
3,299,372
|
||||
Work in process
|
40,825,095
|
32,926,480
|
||||||
Finished goods
|
1,466,224
|
1,204,396
|
||||||
$
|
47,867,399
|
$
|
37,430,248
|
September 30, 2012
(unaudited)
|
December 31, 2011
|
|||||||
Building
|
$
|
26,543,048
|
$
|
26,241,768
|
||||
Machinery and equipment
|
22,962,905
|
22,670,300
|
||||||
Motor vehicles
|
33,411
|
33,054
|
||||||
49,539,364
|
48,945,122
|
|||||||
Less: accumulated depreciation
|
13,896,339
|
12,225,527
|
||||||
$
|
35,643,025
|
$
|
36,719,595
|
September 30, 2012
|
December 31, 2011
|
Estimated completion time
|
Expected capital needed to complete
|
||||||||||
(unaudited)
|
|||||||||||||
Construction of factory
|
$
|
3,685,872
|
$
|
3,427,962
|
Depends on
testing
|
$
|
1,591,000
|
||||||
Land improvements
|
4,287,993
|
2,792,489
|
2012
|
1,272,800
|
|||||||||
$
|
7,973,865
|
$
|
6,220,451
|
$
|
3,863,800
|
September 30, 2012
(unaudited)
|
December 31, 2011
|
|||||||
Land Use Rights
|
$
|
11,255,395
|
$
|
11,371,230
|
||||
Less: Accumulated amortization
|
840,573
|
672,171
|
||||||
$
|
10,414,822
|
$
|
10,699,059
|
September 30, 2012
(unaudited)
|
December 31, 2011
|
|||||||
Bank loan from China Everbright Bank, dated July 11, 2011, due and repaid on July 11, 2012, with an annual interest rate of 8.528% payable quarterly, secured by property and equipment and land use rights
|
$
|
-
|
$
|
6,296,000
|
||||
Bank loan from China Construction Bank, dated January 10, 2012, due January 11, 2013, with an annual interest rate of 6.56% payable quarterly, secured by property and equipment and land use rights
|
$
|
4,773,000
|
$
|
4,722,000
|
||||
Bank loan from China Construction Bank, dated August 23, 2012, due August 22, 2013 with an annual interest rate of 6.10% payable quarterly, secured by land use rights
|
$
|
6,364,000
|
$
|
6,296,000
|
||||
Bank loan from China Construction Bank, dated August 3, 2012, due August 2, 2013 with an annual interest rate of 6.10% payable quarterly, secured by land use rights
|
$
|
6,364,000
|
$
|
6,296,000
|
||||
Bank loan from China Construction Bank, dated June 6, 2012, due June 5, 2013 with an annual interest rate of 9.184% payable quarterly, secured by land use rights
|
$
|
6,364,000
|
$
|
6,296,000
|
||||
Bank loan from China Construction Bank, dated September 7, 2012, due September 6, 2013 with an annual interest rate of 6.10% payable quarterly, secured by land use rights
|
$
|
4,773,000
|
$
|
4,722,000
|
||||
Bank loan from China Construction Bank, dated September 17, 2012, due September 16, 2013 with an annual interest rate of 6.10% payable quarterly, secured by land use rights
|
$
|
4,136,600
|
$
|
4,092,400
|
||||
Bank loan from Huaxia Bank, dated June 14, 2011, due and repaid on June 14, 2012, with an annual interest rate of 8.203% payable quarterly, secured by equipment and land use rights
|
$
|
-
|
$
|
5,509,000
|
||||
Bank loan from Credit Union, dated February 1, 2011, originally due in August 2012, repaid in April 2012, with an annual interest rate of 13.66% payable monthly, secured by guarantee from major shareholder’s wife
|
$
|
-
|
$
|
1,259,200
|
||||
$
|
32,774,600
|
$
|
45,488,600
|
Item 2.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
|
o
|
graphite electrodes;
|
o
|
fine grain graphite; and
|
o
|
high purity graphite.
|
Three months ended September 30,
|
||||||||||||||||
2012
|
2011
|
|||||||||||||||
Sales
|
$
|
6,491
|
100.0
|
%
|
$
|
13,592
|
100.0
|
%
|
||||||||
Cost of goods sold
|
4,722
|
72.7
|
%
|
10,516
|
77.4
|
%
|
||||||||||
Gross profit
|
1,769
|
27.3
|
%
|
3,076
|
22.6
|
%
|
||||||||||
Operating expenses
|
||||||||||||||||
Selling expenses
|
64
|
1.0
|
%
|
51
|
0.4
|
%
|
||||||||||
General and administrative
|
1,056
|
16.3
|
%
|
1, 316
|
9.7
|
%
|
||||||||||
Depreciation and amortization
|
56
|
0.9
|
%
|
98
|
0.7
|
%
|
||||||||||
Income from operations
|
1,177
|
18.1
|
%
|
1,611
|
11.9
|
%
|
||||||||||
Other income
|
6
|
0.1
|
%
|
14
|
0.1
|
%
|
||||||||||
Other expense
|
0.3
|
0.0
|
%
|
-
|
|
-
|
%
|
|||||||||
Change in fair value of warrants
|
(188
|
)
|
(2.9
|
)%
|
1
|
0.0
|
%
|
|||||||||
Interest expense
|
(1,209
|
)
|
(18.6
|
)%
|
(957
|
)
|
(7.0
|
)%
|
||||||||
Income before income tax expense
|
(799
|
)
|
(12.3
|
)%
|
668
|
4.9
|
%
|
|||||||||
Net income
|
(799
|
)
|
(12.3
|
)%
|
668
|
4.9
|
%
|
|||||||||
Dividend
|
(5
|
)
|
(0.1
|
)%
|
(14
|
)
|
(0.1
|
)%
|
||||||||
Net income available to common shareholders
|
(803
|
)
|
(12.4
|
)%
|
655
|
4.8
|
%
|
|||||||||
Foreign currency translation adjustment
|
529
|
8.1
|
%
|
508
|
3.7
|
%
|
||||||||||
Total comprehensive income
|
$
|
(270
|
)
|
(4.2
|
)%
|
$
|
1,176
|
8.7
|
%
|
September 30, 2012
Sales
|
% of Total
Sales
|
September 30, 2011
Sales
|
% of Total
Sales
|
|||||||||||||
Graphite Electrodes
|
$
|
788,769
|
12.1
|
%
|
$
|
1,812,189
|
13.3
|
%
|
||||||||
Fine Grain Graphite
|
2,666,957
|
41.1
|
%
|
5,780,071
|
42.5
|
%
|
||||||||||
High Purity Graphite
|
2,763,836
|
42.6
|
%
|
5,729,840
|
42.2
|
%
|
||||||||||
Others (1)
|
271,571
|
4.2
|
%
|
269,878
|
2.0
|
%
|
||||||||||
Total
|
$
|
6,491,133
|
100.0
|
% |
$
|
13,591,978
|
100.0
|
% |
Nine months ended September 30,
|
||||||||||||||||
2012
|
2011
|
|||||||||||||||
Sales
|
$
|
28,430
|
100.0
|
%
|
$
|
37,200
|
100.0
|
%
|
||||||||
Cost of goods sold
|
20,851
|
73.3
|
%
|
28,856
|
77.6
|
%
|
||||||||||
Gross profit
|
7,579
|
26.7
|
%
|
8,344
|
22.4
|
%
|
||||||||||
Operating expenses
|
||||||||||||||||
Selling expenses
|
140
|
0.5
|
%
|
158
|
0.4
|
%
|
||||||||||
General and administrative
|
3,078
|
10.8
|
%
|
3,920
|
10.5
|
%
|
||||||||||
Depreciation and amortization
|
160
|
0.6
|
%
|
192
|
0.5
|
%
|
||||||||||
Income from operations
|
4,200
|
14.8
|
%
|
4,075
|
11.0
|
%
|
||||||||||
Other income
|
221
|
0.8
|
%
|
90
|
0.2
|
%
|
||||||||||
Other expense
|
(215
|
)
|
(0.8
|
)%
|
-
|
|
-
|
%
|
||||||||
Change in fair value of warrants
|
(222
|
)
|
(0.8
|
)%
|
83
|
0.2
|
%
|
|||||||||
Interest expense
|
(3,659
|
)
|
(12.9
|
)%
|
(2,364
|
)
|
(6.4
|
)%
|
||||||||
Income before income tax expense
|
326
|
1.1
|
%
|
1,883
|
5.1
|
%
|
||||||||||
Net income
|
326
|
1.1
|
%
|
1,883
|
5.1
|
%
|
||||||||||
Dividend
|
(14
|
)
|
(0.0
|
)%
|
22
|
(0.1
|
)%
|
|||||||||
Net income available to common shareholders
|
312
|
1.1
|
%
|
1,862
|
5.0
|
%
|
||||||||||
Foreign currency translation adjustment
|
518
|
1.8
|
%
|
1,330
|
3.6
|
%
|
||||||||||
Total comprehensive income
|
$
|
844
|
3.0
|
%
|
$
|
3,213
|
8.6
|
%
|
September 30, 2012
Sales
|
% of Total
Sales
|
September 30, 2011
Sales
|
% of Total
Sales
|
|||||||||||||
Graphite Electrodes
|
$
|
3,434,285
|
12.1
|
%
|
$
|
5,535,851
|
14.9
|
%
|
||||||||
Fine Grain Graphite
|
12,443,155
|
43.8
|
%
|
15,773,229
|
42.4
|
%
|
||||||||||
High Purity Graphite
|
12,024,784
|
42.3
|
%
|
15,125,154
|
40.7
|
%
|
||||||||||
Others (1)
|
527,662
|
1.8
|
%
|
766,103
|
2.0
|
%
|
||||||||||
Total
|
$
|
28,429,886
|
100.0
|
% |
$
|
37,200,337
|
100.0
|
% |
1.
|
10% of after tax income to be allocated to a statutory surplus reserve until the reserve amounts to 50% of the company’s registered capital.
|
2.
|
If the accumulate balance of statutory surplus reserve is not enough to make up the Company’s cumulative prior years’ losses, the current year’s after tax income should be first used to make up the losses before the statutory surplus reverse is drawn.
|
3.
|
Allocation can be made to the discretionary surplus reserve, if such a reserve is approved at the meeting of the equity owners.
|
September 30, 2012
(unaudited)
|
December 31, 2011
|
|||||||
Bank loan from China Everbright Bank, dated July 11, 2011, due and repaid on July 11, 2012, with an annual interest rate of 8.528% payable quarterly, secured by property and equipment and land use rights
|
$
|
-
|
$
|
6,296,000
|
||||
Bank loan from China Construction Bank, dated January 10, 2012, due January 11, 2013, with an annual interest rate of 6.56% payable quarterly, secured by property and equipment and land use rights
|
$
|
4,773,000
|
$
|
4,722,000
|
||||
Bank loan from China Construction Bank, dated August 23, 2012, due August 22, 2013 with an annual interest rate of 6.10% payable quarterly, secured by land use rights
|
$
|
6,364,000
|
$
|
6,296,000
|
||||
Bank loan from China Construction Bank, dated August 3, 2012, due August 2, 2013, with an annual interest rate of 6.10% payable quarterly, secured by land use rights
|
$
|
6,364,000
|
$
|
6,296,000
|
||||
Bank loan from China Construction Bank, dated June 6, 2012, due June 5, 2013 with an annual interest rate of 9.184% payable quarterly, secured by land use rights
|
$
|
6,364,000
|
$
|
6,296,000
|
||||
Bank loan from China Construction Bank, dated September 7, 2012, due September 6, 2013 with an annual interest rate of 6.10% payable quarterly, secured by land use rights
|
$
|
4,773,000
|
$
|
4,722,000
|
||||
Bank loan from China Construction Bank, dated September 17, 2012, due September 16, 2013 with an annual interest rate of 6.10% payable quarterly, secured by land use rights
|
$
|
4,136,600
|
$
|
4,092,400
|
||||
Bank loan from Huaxia Bank, dated June 14, 2011, due and repaid on June 14, 2012, with an annual interest rate of 8.203% payable quarterly, secured by equipment and land use rights
|
$
|
-
|
$
|
5,509,000
|
||||
Bank loan from Credit Union, dated February 1, 2011, originally due in August 2012, repaid in April 2012, with an annual interest rate of 13.66% payable monthly, secured by guarantee from major shareholder’s wife
|
$
|
-
|
$
|
1,259,200
|
||||
$
|
32,774,600
|
$
|
45,488,600
|
o
|
We continue to generate sufficient business to generate substantial profits, which cannot be assured;
|
o
|
Our banks continue to provide us with the necessary working capital financing; and
|
o
|
We are able to generate savings by improving the efficiency of our operations.
|
Cash Flows Data:
|
||||||||
For Nine Months Ended
September 30,
|
||||||||
2012
|
2011
|
|||||||
Net cash flows provided by (used in) operating activities
|
$
|
538,078
|
$
|
(9,916,027
|
)
|
|||
Net cash flows used in investing activities
|
$
|
(1,544,591
|
)
|
$
|
(7,137,821
|
)
|
||
Net cash flows provided by financing activities
|
$
|
607,301
|
$
|
17,791,406
|
Item 3.
|
Quantitative and Qualitative Disclosures about Market Risk.
|
Item 4.
|
Controls and Procedures.
|
Item 2.
|
Unregistered Sales Of Equity Securities And Use Of Proceeds
|
Item 3.
|
Defaults Upon Senior Securities
|
Item 4.
|
Mine Safety Disclosures
|
Item 5.
|
Other Information
|
Item 6.
|
Exhibits
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer
|
32.1
|
Section 1350 Certification of Chief Executive Officer
|
32.2
|
Section 1350 Certification of Chief Financial Officer
|
CHINA CARBON GRAPHITE GROUP, INC.
|
||
Date: November
13
, 2012
|
By:
|
/s/ Donghai Yu
|
Donghai Yu
|
||
Chief Executive Officer
|
Date: November
13
, 2012
|
By:
|
/s/ Zhenfang Yang
|
Zhenfang Yang
|
||
Chief Financial Officer
|
1 Year China Carbon Graphite (CE) Chart |
1 Month China Carbon Graphite (CE) Chart |
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