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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
|
o
|
Smaller reporting company
|
x
|
(Do not check if smaller reporting company)
|
PART I - FINANCIAL INFORMATION
|
Page No.
|
|
Item 1.
|
Financial Statements:
|
3
|
Consolidated Balance Sheets at March 31, 2014 (unaudited) and December 31, 2013
|
3
|
|
Unaudited Consolidated Statements of Operations and Comprehensive Loss for the Three months ended March 31, 2014 and 2013
|
4
|
|
Unaudited Consolidated Statements of Cash Flows for the Three months ended March 31, 2014 and 2013
|
5
|
|
Notes to Unaudited Consolidated Financial Statements
|
6
|
|
Item 2.
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
37
|
Item 3.
|
Quantitative and Qualitative Disclosures About Market Risk
|
57
|
Item 4.
|
Controls and Procedures
|
57
|
PART II - OTHER INFORMATION
|
||
Item 1.
|
Legal Proceedings
|
58
|
Item 1A.
|
Risk Factors
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
59
|
Item 3.
|
Defaults Upon Senior Securities
|
59
|
Item 4.
|
Mine Safety Disclosures
|
59
|
Item 5.
|
Other Information
|
59
|
Item 6.
|
Exhibits
|
59
|
Signatures
|
60
|
China Carbon Graphite Group, Inc. and subsidiaries
|
||||||
Consolidated Balance Sheets
|
March 31,
2014
|
December 31,
2013
|
|||||||||
(Unaudited)
|
(Audited)
|
|||||||||
ASSETS
|
||||||||||
|
|
|||||||||
Current Assets
|
|
|
||||||||
|
Cash and cash equivalents
|
$ | 429,380 | $ | 131,545 | |||||
|
Restricted cash
|
34,823,380 | 35,643,666 | |||||||
|
Accounts receivable, Net
|
4,078,127 | 4,488,310 | |||||||
|
Advance to suppliers
|
64,680 | 532,178 | |||||||
|
Inventories
|
26,597,290 | 27,901,417 | |||||||
|
Prepaid expenses
|
326,460 | 528,464 | |||||||
|
Shares to be canceled
|
110,000 | 230,000 | |||||||
|
Other receivables, net of allowance of $308,587 and $296,628, respectively
|
191,569 | 194,988 | |||||||
|
|
Total current assets
|
66,620,886 | 69,650,568 | ||||||
|
|
|
|
|
||||||
Goodwill
|
494,540 | 494,540 | ||||||||
|
|
|
|
|
||||||
Property And Equipment, Net
|
19,147,703 | 20,027,083 | ||||||||
|
|
|
|
|
||||||
Construction In Progress
|
31,484,085 | 31,747,010 | ||||||||
|
|
|
|
|
||||||
Land Use Rights, Net
|
9,259,652 | 9,633,302 | ||||||||
Total Assets
|
$ | 127,006,866 | $ | 131,552,503 | ||||||
|
|
|
|
|
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||
|
|
|
|
|
||||||
Current Liabilities
|
|
|
||||||||
|
Accounts payable and accrued expenses
|
$ | 2,477,503 | $ | 2,332,861 | |||||
|
Advance from customers
|
2,338,602 | 2,133,458 | |||||||
|
Shares to be issued
|
- | 600,000 | |||||||
|
Short term bank loans
|
51,927,160 | 40,636,305 | |||||||
|
Notes payable
|
59,841,709 | 68,553,116 | |||||||
|
Other payables
|
2,762,605 | 2,755,529 | |||||||
|
Loan from unrelated parties
|
261,704 | 268,738 | |||||||
|
Dividends payable
|
55,015 | 55,015 | |||||||
Total current liabilities
|
119,664,298 | 117,335,022 | ||||||||
|
|
|
|
|
||||||
|
Amount due to related parties
|
5,026,626 | 5,157,112 | |||||||
|
Long Term Bank Loan
|
17,695,129 | 22,597,750 | |||||||
|
Warrant Liabilities
|
10,972 | 13,467 | |||||||
Total Liabilities
|
142,397,026 | 145,103,351 | ||||||||
|
|
|
|
|
||||||
|
Redeemable convertible series B preferred stock, $0.001 par value;
|
|
|
|||||||
|
3,000,000 shares authorized; 300,000 and 300,000 shares issued
and outstanding at March 31, 2014 and December 31, 2013, respectively.
|
150,000 | 270,000 | |||||||
Stockholders' Equity
|
|
|||||||||
|
Common stock, $0.001 par value; 100,000,000 shares authorized
|
|
||||||||
|
31,518,518 and 26,342,518 shares issued and outstanding at
|
|
||||||||
|
March 31, 2014 and December 31, 2013, respectively
|
31,518 | 26,342 | |||||||
|
Additional paid-in capital
|
19,169,670 | 18,551,966 | |||||||
|
Accumulated other comprehensive income
|
9,808,396 | 9,428,149 | |||||||
|
(Accumulated loss) Retained earnings
|
(44,549,743 | ) | (41,827,304 | ) | |||||
|
|
Total stockholders' equity
|
(15,540,160 | ) | (13,820,847 | ) | ||||
Total Liabilities and Stockholders' Equity
|
$ | 127,006,866 | $ | 131,552,503 |
China Carbon Graphite Group, Inc. and subsidiaries
|
||||||||
Consolidated Statements of Operations and Comprehensive Loss
|
||||||||
For the Three Months Ended March 31, 2014 and 2013
|
||||||||
(Unaudited)
|
|
|
Three months ended March 31,
|
|||||||
|
|
2014
|
2013
|
||||||
|
|
|
|
||||||
Sales | $ | 1,311,755 | $ | 3,060,918 | |||||
|
|
|
|
||||||
Cost of Goods Sold
|
1,732,513 | 3,320,320 | |||||||
Gross (Loss)
|
(420,758 | ) | (259,402 | ) | |||||
|
|
|
|
||||||
Operating Expenses
|
|
|
|||||||
|
Selling expenses
|
14,724 | 17,941 | ||||||
|
General and administrative
|
1,219,919
|
384,582 | ||||||
|
Depreciation and amortization
|
69,266 | 67,888 | ||||||
Total operating expenses
|
1,303,909 | 470,411 | |||||||
|
|
|
|
||||||
Operating Loss Before Other Income (Expense)
|
(1,724,667 | ) | (729,813 | ) | |||||
|
|
|
|
||||||
Other Income (Expense)
|
|
|
|||||||
|
Interest expense
|
(1,123,916 | ) | (862,448 | ) | ||||
|
Interest income
|
52,170 | 45,304 | ||||||
|
Other expense
|
- | - | ||||||
|
Other income (expense), net
|
71,477 | 321 | ||||||
|
Change in fair value of warrants
|
2,495 | 44,368 | ||||||
Total other expense, net
|
(997,773 | ) | (772,455 | ) | |||||
|
|
|
|
||||||
Loss Before Income Tax Expense
|
(2,722,440 | ) | (1,502,268 | ) | |||||
|
|
|
|
||||||
Income Tax Expense
|
- | - | |||||||
|
|
|
|
||||||
Net Loss
|
(2,722,440 | ) | (1,502,268 | ) | |||||
|
|
|
|
||||||
Preferred Stock Dividends
|
- | (4,537 | ) | ||||||
|
|
|
|
||||||
Net Loss Available To Common Shareholders
|
(2,722,440 | ) | (1,506,805 | ) | |||||
|
|
|
|
||||||
Other Comprehensive Income
|
|
|
|||||||
|
Foreign currency translation gain
|
380,249 | 146,277 | ||||||
Total Comprehensive Loss
|
$ | (2,342,191 | ) | $ | (1,355,991 | ) | |||
|
|
|
|
||||||
Share Data
|
|
|
|||||||
|
Basic loss per share
|
$ | (0.09 | ) | $ | (0.06 | ) | ||
|
|
|
|
||||||
|
Diluted loss per share
|
$ | (0.09 | ) | $ | (0.06 | ) | ||
|
|
|
|||||||
|
Weighted average common shares outstanding,
basic
|
30,602,251 | 25,103,518 | ||||||
|
|
|
|||||||
|
Weighted average common shares outstanding,
diluted
|
30,602,251 | 25,103,518 |
China Carbon Graphite Group, Inc. and subsidiaries
|
||||||
Consolidated Statements of Cash Flows
|
||||||
(Unaudited)
|
|
|
|
Three months ended March 31,
|
|||||||
|
|
|
2014
|
2013
|
||||||
Cash Flows from Operating Activities
|
|
|
||||||||
|
Net Loss
|
$
|
(2,722,440
|
)
|
$
|
(1,502,268
|
)
|
|||
|
Adjustments to reconcile net cash (used in) operating activities
|
|
|
|||||||
|
|
Depreciation and Amortization
|
486,796
|
655,449
|
||||||
|
|
Stock compensation
|
22,880
|
60,345
|
||||||
|
|
Change in fair value of warrants
|
(2,495
|
)
|
(44,368
|
)
|
||||
|
|
Bad debt expenses
|
(39,997
|
)
|
(166,601
|
)
|
||||
|
Changes in operating assets and liabilities
|
|
|
|||||||
|
|
Accounts receivable
|
(88,006
|
)
|
4,290,026
|
|||||
|
|
Notes receivable
|
-
|
(7,387,374
|
)
|
|||||
|
|
Other receivables
|
(21,747
|
)
|
(68,745
|
)
|
||||
|
|
Advance to suppliers
|
908,305
|
(11,300,990
|
)
|
|||||
|
|
Inventory
|
584,583
|
386,948
|
||||||
|
|
Prepaid expenses
|
193,315
|
(530,927
|
)
|
|||||
|
|
Accounts payable and accrued liabilities
|
198,991
|
(824,186
|
)
|
|||||
|
|
Advance from customers
|
265,853
|
366,928
|
||||||
|
|
Taxes payable
|
57,837
|
99,446
|
||||||
|
|
Other payables
|
5,634
|
755,723
|
||||||
Net cash used in operating activities
|
(150,492
|
)
|
(15,210,594
|
)
|
||||||
|
|
|
|
|
||||||
Cash flows from investing activities
|
|
|
||||||||
|
|
Acquisition of property, plant and equipment
|
(1,161
|
)
|
(2,292
|
)
|
||||
|
|
Addition of construction in progress
|
(578,581
|
)
|
(11,575,140
|
)
|
||||
Net cash used in investing activities
|
(579,742
|
)
|
(11,577,432
|
)
|
||||||
|
|
|
|
|
||||||
Cash flows from financing activities
|
|
|
||||||||
|
|
Proceeds from short term loans
|
19,664,072
|
11,249,000
|
||||||
|
|
Repayments for short term loans
|
(11,470,709
|
)
|
(4,821,000
|
)
|
||||
|
|
Proceeds from long term loans
|
-
|
11,249,000
|
||||||
|
|
Proceeds from loan from unrelated parties
|
-
|
10,992,029
|
||||||
|
|
Proceeds from loan from related parties
|
4,573
|
448,994
|
||||||
|
|
Repayments to related parties
|
-
|
(622,072
|
)
|
|||||
|
|
Restrict cash
|
(114,707
|
)
|
(160,700
|
)
|
||||
|
|
Proceeds from notes payable
|
24,580,090
|
17,677,000
|
||||||
|
|
Repayments to notes payable
|
(31,626,383
|
)
|
(17,677,000
|
)
|
||||
Net cash provided by financing activities
|
1,036,937
|
28,335,251
|
||||||||
|
|
|
|
|
||||||
Effect of exchange rate fluctuation
|
(8,868
|
)
|
3,283
|
|||||||
|
|
|
|
|
||||||
Net increase in cash
|
297,835
|
1,550,508
|
||||||||
|
|
|
|
|
||||||
Cash and cash equivalents at beginning of period
|
131,545
|
129,746
|
||||||||
|
|
|
|
|
||||||
Cash and cash equivalents at ending of period
|
$
|
429,380
|
$
|
1,680,254
|
||||||
|
|
|
|
|
||||||
Supplemental disclosure of cash flow information
|
|
|
||||||||
|
|
|
|
|
||||||
|
Interest paid
|
$
|
1,441,078
|
$
|
1,040,625
|
|||||
|
Income taxes paid
|
$
|
-
|
$
|
-
|
|||||
|
|
|
|
|
||||||
Non-cash activities:
|
|
|
||||||||
|
|
|
|
|
||||||
|
Issuance of common stock for compensation
|
$
|
22,704
|
$
|
-
|
|||||
|
|
|
|
|
||||||
|
Issuance of common stock for acquisition
|
$
|
600,000
|
$
|
-
|
●
|
Manufacture of Graphene Oxide and graphite bipolar plates. Graphene Oxide has wide applications as a conductive agent, such as in lithium ion batteries, super capacitors, rubber and plastic additives, conductive ink, special coating, transparent conductive thin films and chips. Graphite bipolar plates are primarily used in solar power storage.
|
●
|
A business-to-business and business-to-consumers Internet portal (www.roycarbon.com) for graphite related products. Vendors can sell raw materials, industrial commodities and consumer (household) commodities to both business and consumers through the website by paying a fee for each transaction conducted through the website.
|
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.
|
March 31,
2014
|
December 31,
2013
|
|||||||
2007 Warrants
|
||||||||
Annual dividend yield
|
-
|
-
|
||||||
Expected life (years)
|
-
|
-
|
||||||
Risk-free interest rate
|
0.18
|
%
|
0.18
|
%
|
||||
Expected volatility
|
163
|
%
|
152
|
%
|
March 31,
2014
|
December 31,
2013
|
|||||||
2009 Warrants
|
||||||||
Annual dividend yield
|
-
|
-
|
||||||
Expected life (years)
|
0.46
|
0.71
|
||||||
Risk-free interest rate
|
0.18
|
%
|
0.18
|
%
|
||||
Expected volatility
|
163
|
%
|
152
|
%
|
March 31,
2014
|
December 31,
2013
|
|||||||
2009 Series B Warrants
|
||||||||
Annual dividend yield
|
-
|
-
|
||||||
Expected life (years)
|
0.73
|
0.98
|
||||||
Risk-free interest rate
|
0.18
|
%
|
0.18
|
%
|
||||
Expected volatility
|
163
|
%
|
152
|
%
|
March 31,
2014
|
December 31,
2013
|
|||||||
2010 Series B Warrants
|
||||||||
Annual dividend yield
|
-
|
-
|
||||||
Expected life (years)
|
0.78
|
1.03
|
||||||
Risk-free interest rate
|
0.18
|
%
|
0.18
|
%
|
||||
Expected volatility
|
163
|
%
|
152
|
%
|
Carrying Value at
March 31,
|
Fair Value Measurement at
March 31, 2014
|
|||||||||||||||
2014
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Warrant liability
|
$
|
10,972
|
-
|
-
|
$
|
10,972
|
||||||||||
Notes payable
|
$
|
59,841,709
|
-
|
$
|
59,841,709
|
-
|
Carrying
Value at
December
|
Fair Value Measurement at
December 31, 2013
|
|||||||||||||||
31, 2013
|
Level 1
|
Level 2
|
Level 3
|
|||||||||||||
Warrant liability
|
$
|
13,467
|
-
|
-
|
$
|
13,467
|
||||||||||
Notes payable
|
$
|
68,553,116
|
-
|
$
|
68,553,116
|
-
|
Warrants
|
Weighted
Average
Exercise Price
|
|||||||
Outstanding as of December 31, 2013
|
1,229,200
|
$
|
1.51
|
|||||
Granted
|
-
|
-
|
||||||
Exercised
|
-
|
-
|
||||||
Cancelled
|
-
|
-
|
||||||
Outstanding as of March 31, 2014
|
1,229,200
|
$
|
1.51
|
March 31,
2014
|
March 31,
2013
|
|||||||
Weighted average shares of common stock outstanding (basic)
|
30,602,251
|
25,103,518
|
||||||
Shares issuable upon conversion of Series B Preferred Stock
|
-
|
-
|
||||||
Weighted average shares of common stock outstanding (diluted)
|
30,602,251
|
25,103,518
|
||||||
Net (loss) available to common shareholders
|
$
|
(2,722,440
|
)
|
$
|
(1,506,805
|
)
|
||
Net (loss) per shares of common stock (basic)
|
$
|
(0.09
|
)
|
$
|
(0.06
|
)
|
||
Net (loss) per shares of common stock (diluted)
|
$
|
(0.09
|
)
|
$
|
(0.06
|
)
|
Three months ended
March 31,
|
||||||||
2014
|
2013
|
|||||||
Computed tax at the PRC statutory rate of 15%
|
$
|
-
|
$
|
-
|
||||
Benefit of tax holiday
|
-
|
-
|
||||||
Income tax expenses per books
|
$
|
-
|
$
|
-
|
March 31,
2014
|
December 31,
2013
|
|||||||
Amount outstanding
|
$
|
11,273,783
|
$
|
11,488,063
|
||||
Less: Allowance for doubtful accounts, net
|
(7,195,656
|
)
|
(6,999,753
|
)
|
||||
Net amount
|
$
|
4,078,127
|
$
|
4,488,310
|
March 31,
2014
|
December 31,
2013
|
|||||||
Beginning balance
|
$
|
6,999,753
|
$
|
3,872,082
|
||||
Provision for doubtful accounts
|
195,903
|
3,127,671
|
||||||
Ending balance
|
$
|
7,195,656
|
$
|
6,999,753
|
March 31,
2014
|
December 31,
2013
|
|||||||
Advances for raw material
|
$
|
3,081,793
|
$
|
4,080,246
|
||||
Advances for construction
|
-
|
-
|
||||||
Allowance for advances
|
(3,017,113
|
) |
(3,548,068
|
)
|
||||
Advances to suppliers, net
|
$
|
64,680
|
$
|
532,178
|
March 31,
2014
|
December 31,
2013
|
|||||||
Raw materials
|
$
|
6,541,290
|
$
|
6,801,043
|
||||
Work in process
|
38,932,717
|
40,557,526
|
||||||
Finished goods
|
1,981,840
|
1,962,002
|
||||||
Reserve for slow moving and obsolete inventory
|
(20,858,557
|
)
|
(21,419,154
|
)
|
||||
$
|
26,597,290
|
$
|
27,901,417
|
March 31,
2014
|
December 31,
2013
|
|||||||
Building
|
$
|
26,837,475
|
$
|
27,558,762
|
||||
Machinery and equipment
|
28,826,591
|
29,600,169
|
||||||
Motor vehicles
|
78,720
|
80,836
|
||||||
Impairment of property, plant and equipment
|
(19,214,221
|
) |
(19,730,625
|
) | ||||
36,528,565
|
37,509,142
|
|||||||
Less: accumulated depreciation
|
(17,380,862
|
) |
(17,482,059
|
) | ||||
$
|
19,147,703
|
$
|
20,027,083
|
March 31,
2014
|
December 31,
2013
|
Estimated
completion time
|
Expected
capital
needed to
complete
|
||||||||||
Production facility
|
$
|
20,983,509
|
$
|
21,042,023
|
July 2014
|
$
|
1,608,648
|
||||||
Land improvements
|
10,500,576
|
10,704,987
|
June 2014
|
160,865
|
|||||||||
$
|
31,484,085
|
$
|
31,747,010
|
$
|
1,769,513
|
March 31,
2014
|
December 31,
2013
|
|||||||
Land Use Rights
|
$
|
11,749,190
|
$
|
12,064,963
|
||||
Less: Accumulated amortization
|
(2,489,538
|
) |
(2,431,661
|
) | ||||
$
|
9,259,652
|
$
|
9,633,302
|
March 31,
2014
|
December 31,
2013
|
|||||||
Bank loan from Credit Union, dated April, 2012, due in April 1, 2015, with an annual interest rate of 15.3% payable monthly, secured by machinery.
|
$
|
4,311,177
|
$
|
-
|
||||
Bank loan from China Construction Bank, dated January 15, 2014, due January 15, 2015 with an annual interest rate of 6.0% plus 12% floating rate and interest payable monthly, secured by property, equipment, building and land use rights.
|
$
|
8,043,240
|
$
|
-
|
||||
Bank loan from China Construction Bank, dated June 8, 2013, due June 8, 2014 with an annual interest rate of 6.6% payable monthly, secured by property, equipment, building and land use rights
|
$
|
6,434,592
|
$
|
6,607,529
|
||||
Bank loan from China Construction Bank, dated August 6, 2013, due August 5, 2014 with an annual interest rate of 6.0% plus 10% floating rate and interest payable monthly, secured by property, equipment, building and land use rights.
|
6,434,592
|
6,607,529
|
||||||
Bank loan from China Construction Bank, dated August 22, 2013, due August 21, 2014 with an annual interest rate of 6.0%plus 10% floating rate and interest payable monthly, secured by property, equipment, building and land use rights.
|
6,434,592
|
6,607,529
|
||||||
Bank loan from China Construction Bank, dated March 20, 2014, due March 20, 2015 with an annual interest rate of 6% plus 10% floating rate, payable monthly, secured by property, equipment, building and land use rights.
|
6,434,592
|
6,607,529
|
||||||
Bank loan from China Construction Bank, dated September 10, 2013, due September 9, 2014 with an annual interest rate of 6.0% plus 10% floating rate and interest payable monthly, secured by property, equipment, building and land use rights.
|
4,825,944
|
4,955,647
|
||||||
Bank loan from China Construction Bank, dated January 10, 2014, due January 10, 2015 with an annual interest rate of 6% plus 10% floating rate, payable monthly, secured by property, equipment, building and land use rights.
|
4,825,944
|
4,955,647
|
||||||
Bank loan from China Construction Bank, dated September 17, 2013, due September 16, 2014, with an annual interest rate of 6.0% plus 10% floating rate and interest payable monthly, secured by property, equipment, building and land use rights.
|
4,182,485
|
4,294,894
|
||||||
$
|
51,927,160
|
$
|
40,636,305
|
March 31,
2014
|
December 31,
2013
|
|||||||
Bank loan from China Construction Bank, dated January 22, 2013, due in January 21, 2016, with an annual interest rate of 6.15%, payable monthly, secured by machinery.
|
$
|
11,260,537
|
$
|
11,563,176
|
||||
Bank loan from China Construction Bank, dated July 2, 2013, due in July 1, 2016, with an annual interest rate of 6.0% plus 10% floating rate and interest payable monthly, secured by machinery.
|
6,434,592
|
6,607,529
|
||||||
Bank loan from Credit Union, dated April, 2012, due in April 2015, with an annual interest rate of 15.3% payable monthly, secured by machinery.
|
-
|
4,427,045
|
||||||
$
|
17,695,129
|
$
|
22,597,750
|
March 31,
2014
|
||||
Notes payable from China Everbright Bank Co., Ltd, dated January 14, 2014, due July 13, 2014, and restricted cash required 50% of loan amount
|
$
|
6,434,592
|
||
Notes payable from China Everbright Bank Co., Ltd, dated January 27, 2014, due July 26, 2014, and restricted cash required 50% of loan amount
|
6,434,592
|
|||
Notes payable from China Everbright Bank Co., Ltd, dated November 14, 2013, due May 13, 2014, and restricted cash required 50% of loan amount.
This note payable is paid in full on May 13, 2014.
|
9,651,889
|
|||
Notes payable from China Construction Bank, dated March 11, 2014, due September 10, 2014, and restricted cash required 50% of loan amount
|
4,825,944
|
|||
Notes payable from Huaxia Bank, dated December 03, 2013, due June 03, 2014, and restricted cash required 60% of loan amount
|
8,364,970
|
|||
Notes payable from Huaxia Bank, dated December 11, 2013, due June 11, 2014, and restricted cash required 0% of loan amount
|
4,021,620
|
|||
Notes payable from Huaxia Bank, dated December 17, 2013, due June 17, 2014, and restricted cash required 60% of loan amount
|
4,021,620
|
|||
Notes payable from Credit Union, dated December 27, 2013, due June 27, 2014, and restricted cash required 50% of loan amount
|
9,651,889
|
|||
Notes payable from Bank of Inner Mongolia, dated Febuary 18, 2014, due August 17, 2014, and restricted cash required 50% of loan amount, paid back on February 16, 2014.
|
6,434,592
|
|||
$
|
66,758,896
|
December 31,
2013
|
||||
Notes payable from China Everbright Bank Co., Ltd, dated July 30, 2013, due January 30, 2014, and restricted cash required 50% of loan amount, paid back on January 30, 2014.
|
$
|
6,607,529
|
||
Notes payable from China Everbright Bank Co., Ltd, dated July 22, 2013, due January 22, 2014, and restricted cash required 50% of loan amount, paid back on January 22, 2014.
|
6,607,529
|
|||
Notes payable from China Everbright Bank Co., Ltd, dated November 14, 2013, due May13, 2014, and restricted cash required 50% of loan amount
|
9,911,294
|
|||
Notes payable from China Construction Bank, dated November 26, 2013, due May 26, 2014, and restricted cash required 50% of loan amount
|
7,103,094
|
|||
Notes payable from China Construction Bank, dated September 03, 2013, due March 03, 2014, and restricted cash required 50% of loan amount, paid back on March 3, 2014.
|
4,955,647
|
|||
Notes payable from Huaxia Bank, dated December 03, 2013, due June 03, 2014, and restricted cash required 60% of loan amount
|
8,589,788
|
|||
Notes payable from Huaxia Bank, dated December 11, 2013, due June 11, 2014, and restricted cash required 0% of loan amount
|
4,129,706
|
|||
Notes payable from Huaxia Bank, dated December 17, 2013, due June 17, 2014, and restricted cash required 60% of loan amount
|
4,129,706
|
|||
Notes payable from Credit Union, dated December 27, 2013, due June 27, 2014, and restricted cash required 50% of loan amount
|
9,911,294
|
|||
Notes payable from Bank of Inner Mongolia, dated August 16, 2013, due February 16, 2014, and restricted cash required 50% of loan amount, paid back on February 16, 2014.
|
6,607,529
|
|||
$
|
68,553,116
|
● |
graphite electrodes;
|
● |
fine grain graphite;
|
● |
high purity graphite
;
|
● |
graphite oxide; and
|
● |
graphite bipolar plates.
|
Three months ended March 31,
|
||||||||||||||||
2014
|
2013
|
|||||||||||||||
Sales
|
$
|
1,312
|
100.0
|
%
|
$
|
3,061
|
100.0
|
%
|
||||||||
Cost of goods sold
|
1,733
|
132.1
|
%
|
3,320
|
108.5
|
%
|
||||||||||
Gross loss
|
(421
|
)
|
(32.1
|
)%
|
(259
|
)
|
(8.5
|
)%
|
||||||||
Operating expenses
|
||||||||||||||||
Selling expenses
|
15
|
1.1
|
%
|
18
|
0.6
|
%
|
||||||||||
General and administrative
|
1,220
|
93.0
|
%
|
385
|
12.6
|
%
|
||||||||||
Depreciation and amortization
|
69
|
5.3
|
%
|
68
|
2.2
|
%
|
||||||||||
Loss from operations
|
(1,725
|
)
|
(131.5
|
)%
|
(730
|
)
|
(23.8
|
)%
|
||||||||
Other income
|
71
|
5.4
|
%
|
0.3
|
0.01
|
%
|
||||||||||
Other expense
|
-
|
0.0
|
%
|
-
|
-
|
%
|
||||||||||
Change in fair value of warrants
|
2
|
0.2
|
%
|
44
|
1.4
|
%
|
||||||||||
Interest Income
|
52
|
4.0
|
%
|
-
|
-
|
%
|
||||||||||
Interest expense
|
(1,124
|
)
|
(85.7
|
)%
|
(817
|
)
|
(26.7
|
)%
|
||||||||
Net loss
|
(2,722
|
)
|
(207.5
|
)%
|
(1,502
|
)
|
(49.1
|
)%
|
||||||||
Preferred Stock Dividend
|
-
|
-
|
%
|
(5
|
)
|
(0.1
|
)%
|
|||||||||
Net loss available to common shareholders
|
$
|
(2,722
|
)
|
(207.5
|
)%
|
$
|
(1,507
|
)
|
(49.2
|
)%
|
|
|
March 31,
2014
Sales
|
|
|
% of Total
Sales
|
|
|
March 31,
2013
Sales
|
|
|
% of Total
Sales
|
|
||||
Graphite Electrodes
|
|
$
|
712,832
|
|
|
|
54.3
|
%
|
|
$
|
80,960
|
|
|
|
2.6
|
%
|
Fine Grain Graphite
|
|
|
398,925
|
|
|
|
30.4
|
%
|
|
|
1,394,956
|
|
|
|
45.6
|
%
|
High Purity Graphite
|
|
|
195,142
|
|
|
|
14.9
|
%
|
|
|
1,491,521
|
|
|
|
48.7
|
%
|
Others (1)
|
|
|
4,856
|
|
|
|
0.4
|
%
|
|
|
93,481
|
|
|
|
3.1
|
%
|
Total
|
|
$
|
1,311,755
|
|
|
|
100.0
|
%
|
|
$
|
3,060,918
|
|
|
|
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.
|
|
|
March 31,
2014
|
|
|
December 31,
2013
|
|
||
|
|
|
|
|
|
|
||
Bank loan from Credit Union, dated April, 2012, due in April 1, 2015, with an annual interest rate of 15.3% payable monthly, secured by machinery.
|
$
|
4,311,177
|
|
|
$
|
-
|
||
Bank loan from China Construction Bank, dated January 15, 2014, due January 15, 2015 with an annual interest rate of 6.0% plus 12% floating rate and interest payable monthly, secured by property, equipment, building and land use rights.
|
|
$
|
8,043,240
|
|
|
$
|
-
|
|
Bank loan from China Construction Bank, dated June 8, 2013, due June 8, 2014 with an annual interest rate of 6.6% payable monthly, secured by property, equipment, building and land use rights
|
|
$
|
6,434,592
|
|
|
$
|
6,607,529
|
|
|
|
|
|
|
|
|
|
|
Bank loan from China Construction Bank, dated August 6, 2013, due August 5, 2014 with an annual interest rate of 6.0% plus 10% floating rate and interest payable monthly, secured by property, equipment, building and land use rights.
|
|
|
6,434,592
|
|
|
|
6,607,529
|
|
|
|
|
|
|
|
|
|
|
Bank loan from China Construction Bank, dated August 22, 2013, due August 21, 2014 with an annual interest rate of 6.0%plus 10% floating rate and interest payable monthly, secured by property, equipment, building and land use rights.
|
|
|
6,434,592
|
|
|
|
6,607,529
|
|
|
|
|
|
|
|
|
|
|
Bank loan from China Construction Bank, dated March 20, 2014, due March 20, 2015 with an annual interest rate of 6% plus 10% floating rate, payable monthly, secured by property, equipment, building and land use rights.
|
|
|
6,434,592
|
|
|
|
6,607,529
|
|
|
|
|
|
|
|
|
|
|
Bank loan from China Construction Bank, dated September 10, 2013, due September 9, 2014 with an annual interest rate of 6.0% plus 10% floating rate and interest payable monthly, secured by property, equipment, building and land use rights.
|
|
|
4,825,944
|
|
|
|
4,955,647
|
|
|
|
|
|
|
|
|
|
|
Bank loan from China Construction Bank, dated January 10, 2014, due January 10, 2015 with an annual interest rate of 6% plus 10% floating rate, payable monthly, secured by property, equipment, building and land use rights.
|
|
|
4,825,944
|
|
|
|
4,955,647
|
|
|
|
|
|
|
|
|
|
|
Bank loan from China Construction Bank, dated September 17, 2013, due September 16, 2014, with an annual interest rate of 6.0% plus 10% floating rate and interest payable monthly, secured by property, equipment, building and land use rights.
|
|
|
4,182,485
|
|
|
|
4,294,894
|
|
|
|
$
|
51,927,160
|
|
|
$
|
40,636,305
|
|
|
|
March 31,
2014
|
|
|
December 31,
2013
|
|
||
|
|
|
|
|
|
|
||
Bank loan from China Construction Bank, dated January 22, 2013, due in January 21, 2016, with an annual interest rate of 6.15%, payable monthly, secured by machinery.
|
|
$
|
11,260,537
|
|
|
$
|
11,563,176
|
|
|
|
|
|
|
|
|
|
|
Bank loan from China Construction Bank, dated July 2, 2013, due in July 1, 2016, with an annual interest rate of 6.0% plus 10% floating rate and interest payable monthly, secured by machinery.
|
|
|
6,434,592
|
|
|
|
6,607,529
|
|
|
|
|
|
|
|
|
|
|
Bank loan from Credit Union, dated April, 2012, due in April 2015, with an annual interest rate of 15.3% payable monthly, secured by machinery.
|
|
|
-
|
|
|
|
4,427,045
|
|
|
|
$
|
17,695,129
|
|
|
$
|
22,597,750
|
|
|
March 31,
2014
|
|||
|
|
|||
Notes payable from China Everbright Bank Co., Ltd, dated January 14, 2014, due July 13, 2014, and restricted cash required 50% of loan amount
|
$ | 6,434,592 | ||
|
||||
Notes payable from China Everbright Bank Co., Ltd, dated January 27, 2014, due July 26, 2014, and restricted cash required 50% of loan amount
|
6,434,592 | |||
|
||||
Notes payable from China Everbright Bank Co., Ltd, dated November 14, 2013, due May 13, 2014, and restricted cash required 50% of loan amount
|
9,651,889 | |||
|
||||
Notes payable from China Construction Bank, dated March 11, 2014, due September 10, 2014, and restricted cash required 50% of loan amount
|
4,825,944 | |||
|
||||
Notes payable from Huaxia Bank, dated December 03, 2013, due June 03, 2014, and restricted cash required 60% of loan amount
|
8,364,970 | |||
|
||||
Notes payable from Huaxia Bank, dated December 11, 2013, due June 11, 2014, and restricted cash required 0% of loan amount
|
4,021,620 | |||
|
||||
Notes payable from Huaxia Bank, dated December 17, 2013, due June 17, 2014, and restricted cash required 60% of loan amount
|
4,021,620 | |||
|
||||
Notes payable from Credit Union, dated December 27, 2013, due June 27, 2014, and restricted cash required 50% of loan amount
|
9,651,889 | |||
|
||||
Notes payable from Bank of Inner Mongolia, dated Febuary 18, 2014, due August 17, 2014, and restricted cash required 50% of loan amount, paid back on February 16, 2014.
|
6,434,592 | |||
|
$ | 66,758,896 |
|
|
December 31,
2013
|
|
|
|
|
|
|
|
Notes payable from China Everbright Bank Co., Ltd, dated July 30, 2013, due January 30, 2014, and restricted cash required 50% of loan amount, paid back on January 30, 2014.
|
|
$
|
6,607,529
|
|
|
|
|
|
|
Notes payable from China Everbright Bank Co., Ltd, dated July 22, 2013, due January 22, 2014, and restricted cash required 50% of loan amount, paid back on January 22, 2014.
|
|
|
6,607,529
|
|
|
|
|
|
|
Notes payable from China Everbright Bank Co., Ltd, dated November 14, 2013, due May13, 2014, and restricted cash required 50% of loan amount.
This note payable is paid in full on May 13, 2014.
|
|
|
9,911,294
|
|
|
|
|
|
|
Notes payable from China Construction Bank, dated November 26, 2013, due May 26, 2014, and restricted cash required 50% of loan amount
|
|
|
7,103,094
|
|
|
|
|
|
|
Notes payable from China Construction Bank, dated September 03, 2013, due March 03, 2014, and restricted cash required 50% of loan amount, paid back on March 3, 2014.
|
|
|
4,955,647
|
|
|
|
|
|
|
Notes payable from Huaxia Bank, dated December 03, 2013, due June 03, 2014, and restricted cash required 60% of loan amount
|
|
|
8,589,788
|
|
|
|
|
|
|
Notes payable from Huaxia Bank, dated December 11, 2013, due June 11, 2014, and restricted cash required 0% of loan amount
|
|
|
4,129,706
|
|
|
|
|
|
|
Notes payable from Huaxia Bank, dated December 17, 2013, due June 17, 2014, and restricted cash required 60% of loan amount
|
|
|
4,129,706
|
|
|
|
|
|
|
Notes payable from Credit Union, dated December 27, 2013, due June 27, 2014, and restricted cash required 50% of loan amount
|
|
|
9,911,294
|
|
|
|
|
|
|
Notes payable from Bank of Inner Mongolia, dated August 16, 2013, due February 16, 2014, and restricted cash required 50% of loan amount, paid back on February 16, 2014.
|
|
|
6,607,529
|
|
|
|
$
|
68,553,116
|
|
o
|
we generate sufficient business so that we are able 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.
|
|
|
For Three months ended
March 31
|
|
|||||
|
|
2014
|
|
|
2013
|
|
||
Net cash flows used in operating activities
|
|
$
|
(150,492
|
)
|
|
$
|
(15,210,594
|
)
|
Net cash flows used in investing activities
|
|
$
|
(579,742
|
)
|
|
$
|
(11,577,432
|
)
|
Net cash flows provided by financing activities
|
|
$
|
1,036,937
|
|
|
$
|
28,335,251
|
|
|
●
|
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 liabilities, 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.
|
|
|
Carrying
Value at
March 31,
|
|
|
Fair Value Measurement at
March 31, 2014
|
|
||||||||||
|
|
2014
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||
Warrant liability
|
|
$
|
10,972
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
10,972
|
|
Notes payable
|
|
$
|
59,841,709
|
|
|
|
-
|
|
|
$
|
59,841,709
|
|
|
|
-
|
|
|
|
Carrying
Value at
December 31 ,
|
|
|
Fair Value Measurement at
December 31 , 2013
|
|
||||||||||
|
|
2013
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
||||
Warrant liability
|
|
$
|
13,467
|
|
|
|
-
|
|
|
|
-
|
|
|
$
|
13,467
|
|
Notes payable
|
|
$
|
68,553,116
|
|
|
|
-
|
|
|
$
|
68,553,116
|
|
|
|
-
|
|
Item 4.
|
Controls and Procedures.
|
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: May 15, 2014
|
By:
|
/s/ Donghai Yu
|
|
|
Donghai Yu
|
|
|
Chief Executive Officer
|
Date: May 15, 2014
|
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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