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Share Name | Share Symbol | Market | Type |
---|---|---|---|
China Industrial Waste Management Inc (CE) | USOTC:CIWT | 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 |
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
The Quarterly Period Ended September 30,
2010
|
o
|
TRANSITION
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
The Transition Period From __________________ to
__________________________
|
Commission
File Number: 2-95836-NY
|
China
Industrial Waste Management, Inc.
|
(Name
of registrant as specified in its
charter)
|
Nevada
|
13-3250816
|
(State
or other jurisdiction of incorporation or organization)
|
(I.R.S.
Employer Identification No.)
|
c/o
Dalian Dongtai Industrial Waste Treatment Co.
No.
1 Huaihe West Road, E-T-D Zone, Dalian, China
|
116600
|
(Address
of principal executive offices)
|
(Zip
Code)
|
011-86-411-85811229
|
(Registrant's
telephone number, including area
code)
|
N/A
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
Large
accelerated filer
o
|
|
Accelerated
filer
o
|
|
Non-accelerated
filer
o
(Do
not check if smaller reporting company)
|
Smaller
reporting company
x
|
Page
No.
|
|||||
PART
I. - FINANCIAL INFORMATION
|
|||||
Item
1.
|
Financial
Statements.
|
1 | |||
Item
2.
|
Management's
Discussion and Analysis of Financial Condition and Results of
Operations.
|
21 | |||
Item
3.
|
Quantitative
and Qualitative Disclosures About Market Risk.
|
28 | |||
Item
4T
|
Controls
and Procedures.
|
28 | |||
Item
1.
|
Legal
Proceedings.
|
29 | |||
Item
1A.
|
Risk
Factors.
|
29 | |||
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds.
|
29 | |||
Item
3.
|
Defaults
Upon Senior Securities.
|
29 | |||
Item
4.
|
Removed
and Reserved.
|
29 | |||
Item
5.
|
Other
Information.
|
30 | |||
Item
6.
|
Exhibits.
|
30 |
|
·
|
the
timing and magnitude of technological
advances;
|
|
·
|
the
prospects for future acquisitions;
|
|
·
|
the
effects of political, economic and social uncertainties regarding the
governmental, economic and political circumstances in the People’s
Republic of China;
|
|
·
|
the
possibility that a current customer could be acquired or otherwise be
affected by a future event that would diminish their waste management
requirements;
|
|
·
|
the
competition in the waste management industry and the impact of such
competition on pricing, revenues and
margins;
|
|
·
|
uncertainties
surrounding budget reductions or changes in funding priorities of existing
government programs;
|
|
·
|
the
cost of attracting and retaining highly skilled
personnel;
|
|
·
|
our
projected sales, profitability, and cash flows;
|
|
·
|
our
growth strategies; anticipated trends in our
industries;
|
|
·
|
our
future financing plans; and
|
|
·
|
our
anticipated needs for working
capital.
|
September
30,
2010
|
December
31,
2009
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
Current
assets
|
||||||||
Cash
and cash equivalents
|
$ | 4,575,185 | $ | 11,419,129 | ||||
Notes
receivable
|
119,573 | 335,780 | ||||||
Accounts
receivable, net
|
4,684,976 | 2,021,421 | ||||||
Construction
reimbursement receivable
|
- | 846,270 | ||||||
Other
receivables
|
88,241 | 91,872 | ||||||
Inventories
|
2,454,894 | 2,085,029 | ||||||
Advances
to suppliers
|
2,184,101 | 800,694 | ||||||
Deferred
expense
|
14,703 | 14,650 | ||||||
Total
current assets
|
14,121,672 | 17,614,845 | ||||||
Long-term
equity investment
|
149,466 | 87,900 | ||||||
Property,
plant and equipment, net
|
31,943,427 | 32,319,145 | ||||||
Construction
in progress
|
14,562,102 | 9,123,927 | ||||||
Land
usage right, net of accumulated amortization
|
2,007,118 | 1,994,394 | ||||||
BOT
franchise right
|
4,185,038 | 4,102,023 | ||||||
Certificate
of deposit
|
- | 293,002 | ||||||
Restricted
cash
|
3,393,503 | 96,707 | ||||||
Other
asset
|
1,172,509 | 1,074,531 | ||||||
Deferred
tax asset
|
324,408 | 377,381 | ||||||
Related
party receivable
|
239,145 | 234,401 | ||||||
TOTAL
ASSETS
|
$ | 72,098,388 | $ | 67,318,256 | ||||
LIABILITIES
|
||||||||
Current
liabilities
|
||||||||
Accounts
payable
|
$ | 1,488,264 | $ | 418,435 | ||||
Short-term
loan
|
2,989,313 | 6,739,038 | ||||||
Tax
payable
|
475,296 | 200,957 | ||||||
Advance
from customers
|
733,518 | 544,125 | ||||||
Deferred
sales
|
300,565 | 958,930 | ||||||
Accrued
expenses
|
43,649 | 301,531 | ||||||
Construction
projects payable
|
2,660,852 | 3,932,297 | ||||||
Other
payable
|
148,280 | 235,211 | ||||||
Long-term
loan-current portion
|
2,259,825 | 2,245,125 | ||||||
Related
party payable
|
388,611 | 380,902 | ||||||
Total
current liabilities
|
11,488,173 | 15,956,551 | ||||||
Long-term
loan
|
14,446,700 | 13,755,512 | ||||||
Asset
retirement obligation
|
650,825 | 610,445 | ||||||
Government
subsidy
|
6,376,163 | 2,464,079 | ||||||
TOTAL
LIABILITIES
|
32,961,860 | 32,786,587 | ||||||
EQUITY
|
||||||||
Stockholders'
equity of the Company
|
||||||||
Preferred
stock: par value $.001; 5,000,000
|
||||||||
shares
authorized; none issued and outstanding
|
- | - | ||||||
Common
stock: par value $.001; 95,000,000 shares authorized;
|
||||||||
15,336,535
and 15,274,035 shares issued and outstanding as of
|
||||||||
September
30, 2010 and December 31, 2009, respectively
|
15,337 | 15,274 | ||||||
Additional
paid-in capital
|
7,602,625 | 7,162,867 | ||||||
Deferred
stock-based compensation
|
(711,155 | ) | (884,139 | ) | ||||
Accumulated
other comprehensive income
|
2,868,775 | 2,326,292 | ||||||
Retained
earnings
|
20,339,788 | 17,490,919 | ||||||
Total
stockholders' equity of the Company
|
30,115,369 | 26,111,213 | ||||||
Noncontrolling
interest
|
9,021,159 | 8,420,456 | ||||||
TOTAL
EQUITY
|
39,136,528 | 34,531,669 | ||||||
TOTAL
LIABILITIES AND EQUITY
|
$ | 72,098,388 | $ | 67,318,256 |
For
the Three Months Ended
September
30,
|
For
the Nine Months Ended
September
30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Revenues
|
||||||||||||||||
Service
fees
|
$ | 2,722,643 | $ | 2,039,002 | $ | 8,894,125 | $ | 4,879,448 | ||||||||
Sales
of recycled commodities
|
1,884,577 | 1,082,266 | 4,732,517 | 2,306,765 | ||||||||||||
Total
revenues
|
4,607,220 | 3,121,268 | 13,626,642 | 7,186,213 | ||||||||||||
Cost
of revenues
|
||||||||||||||||
Cost
of service fees
|
1,302,925 | 612,036 | 3,559,797 | 1,452,911 | ||||||||||||
Cost
of recycled commodities
|
901,099 | 571,015 | 1,933,075 | 1,336,227 | ||||||||||||
Total
cost of revenues
|
2,204,024 | 1,183,051 | 5,492,872 | 2,789,138 | ||||||||||||
Gross
profit
|
2,403,196 | 1,938,217 | 8,133,770 | 4,397,075 | ||||||||||||
Operating
expenses
|
||||||||||||||||
Selling
expenses
|
181,815 | 172,054 | 502,119 | 394,125 | ||||||||||||
General
and administrative expenses
|
880,308 | 976,647 | 2,893,165 | 2,495,232 | ||||||||||||
Total
operating expenses
|
1,062,123 | 1,148,701 | 3,395,284 | 2,889,357 | ||||||||||||
Income
from operations
|
1,341,073 | 789,516 | 4,738,486 | 1,507,718 | ||||||||||||
Other
income (expense)
|
||||||||||||||||
Other
income
|
120,574 | 87,601 | 208,167 | 61,846 | ||||||||||||
Other
expense
|
(189,493 | ) | (49,122 | ) | (642,045 | ) | (41,039 | ) | ||||||||
Settlement
expense
|
- | - | (439,821 | ) | - | |||||||||||
Total
other income (expense)
|
(68,919 | ) | 38,479 | (873,699 | ) | 20,806 | ||||||||||
Net
income before tax provision
|
||||||||||||||||
Tax
provision
|
224,462 | 110,472 | 612,404 | 215,750 | ||||||||||||
Net
income
|
1,047,692 | 717,524 | 3,252,383 | 1,312,774 | ||||||||||||
Net
income attributable to the noncontrolling interest
|
12,870 | 12,557 | 403,515 | (20,844 | ) | |||||||||||
Net
income attributable to the Company
|
$ | 1,034,822 | $ | 704,966 | $ | 2,848,869 | $ | 1,333,618 | ||||||||
Foreign
currency translation adjustment
|
357,498 | (133,238 | ) | 542,483 | (141,241 | ) | ||||||||||
Comprehensive
income attributable to the Company
|
1,392,319 | 571,729 | 3,391,351 | 1,192,377 | ||||||||||||
Comprehensive
income attributable to the noncontrolling interest
|
12,870 | 12,557 | 403,515 | (20,844 | ) | |||||||||||
Comprehensive
income
|
$ | 1,405,190 | $ | 584,286 | $ | 3,794,866 | $ | 1,171,533 | ||||||||
Basic
and diluted weighted average shares outstanding
|
||||||||||||||||
Basic
|
15,336,535 | 15,265,085 | 15,327,606 | 15,267,387 | ||||||||||||
Diluted
|
17,570,241 | 15,265,085 | 17,557,116 | 15,267,387 | ||||||||||||
Basic
and diluted net earnings per share
|
||||||||||||||||
Basic
|
$ | 0.07 | $ | 0.05 | $ | 0.19 | $ | 0.09 | ||||||||
Diluted
|
$ | 0.06 | $ | 0.05 | $ | 0.16 | $ | 0.09 |
For
the Nine Months Ended
September
30,
|
||||||||
2010
|
2009
|
|||||||
Cash
flows from operating activities:
|
||||||||
Net
income attributable to the Company
|
$ | 2,848,869 | $ | 1,333,618 | ||||
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
- | - | ||||||
Nontrolling
interest
|
403,515 | (20,844 | ) | |||||
Depreciation
|
1,557,266 | 943,487 | ||||||
Amortization
|
51,270 | 51,310 | ||||||
Amortization
of deferred stock-based compensation
|
172,983 | - | ||||||
Bad
debt allowance
|
113,808 | - | ||||||
Stock
and warrant issued for settlement
|
439,821 | 34,660 | ||||||
Accretion
expenses
|
27,549 | 27,086 | ||||||
Government
subsidy recognized as income
|
(23,485 | ) | (46,944 | ) | ||||
Changes
in operating assets and liabilities:
|
||||||||
Notes
receivable
|
219,212 | (14,637 | ) | |||||
Accounts
receivable
|
(2,584,834 | ) | (815,494 | ) | ||||
Construction
reimbursement receivable
|
741,683 | - | ||||||
Other
receivables
|
5,354 | (212,649 | ) | |||||
Inventories
|
(322,098 | ) | 76,715 | |||||
Advance
to suppliers
|
(1,344,098 | ) | (498,676 | ) | ||||
Deferred
expense
|
240 | 2,196 | ||||||
Other
asset
|
(86,057 | ) | (238,349 | ) | ||||
Deferred
tax assets
|
59,581 | - | ||||||
Accounts
payable
|
1,043,319 | 5,448 | ||||||
Tax
payable
|
265,678 | (36,809 | ) | |||||
Advance
from customers
|
175,349 | 7,714 | ||||||
Accrued
expense
|
(259,496 | ) | (335,402 | ) | ||||
Other
payable
|
(129,103 | ) | (98,627 | ) | ||||
Deferred
income
|
(666,251 | ) | (46,578 | ) | ||||
Net
cash provided by operating activities
|
2,710,074 | 117,226 | ||||||
Cash
flows from investing activities
|
||||||||
Investment
in Xiangtan Dongtai
|
(58,770 | ) | (87,823 | ) | ||||
Deposit
for business acquisition
|
- | (1,463,722 | ) | |||||
Purchase
of property and equipment
|
(544,990 | ) | (335,573 | ) | ||||
Construction
in progress
|
(4,583,006 | ) | (7,581,652 | ) | ||||
Purchase
of intangible assets
|
(12,982 | ) | (23,830 | ) | ||||
Due
from related party
|
- | (373,249 | ) | |||||
Certificate
of deposit
|
293,850 | (1,683,280 | ) | |||||
Cash
received from a third party to acquire additional equity interest in
Sino-Norway
|
19,100 | - | ||||||
Net
cash used in investing activities
|
(4,886,798 | ) | (11,549,129 | ) | ||||
Cash
flows from financing activities
|
||||||||
Repayment
of construction project payable
|
(1,328,059 | ) | (3,014,586 | ) | ||||
Proceeds
from short-term loan
|
2,938,497 | 6,835,580 | ||||||
Repayment
of short-term loans
|
(6,758,544 | ) | (3,366,560 | ) | ||||
Proceeds
from long-term loan
|
1,616,173 | 16,100,938 | ||||||
Repayment
of long-term loans
|
(1,240,597 | ) | - | |||||
Cash
released from escrow account
|
- | 750,000 | ||||||
Subsidy
received from government
|
- | 1,463,722 | ||||||
Net
cash (used in) provided by financing activities
|
(4,772,530 | ) | 18,769,094 | |||||
Effect
of exchange rate on cash
|
105,309 | (17,606 | ) | |||||
Net
increase (decrease) in cash and cash equivalents
|
(6,843,944 | ) | 7,319,585 | |||||
Cash
and cash equivalents, beginning of period
|
11,419,129 | 5,709,129 | ||||||
Cash
and cash equivalents, end of period
|
$ | 4,575,185 | $ | 13,028,714 | ||||
Supplemental
cash flow information:
|
- | |||||||
Cash
paid during the year for:
|
||||||||
Interest
|
$ | 1,019,545 | $ | 620,915 | ||||
Income
taxes
|
$ | 485,458 | $ | 329,537 | ||||
Supplemental
disclosures of non cash activity
|
||||||||
Reclassification
of construction reimbursement receivables to fixed assets
|
$ | 107,426 | $ | - |
•
|
Full
Treasure Investments Ltd. (“Full
Treasure”)
|
•
|
Dalian
Dongtai Industrial Waste Treatment Co., Ltd. (“Dalian
Dongtai”)
|
•
|
Dalian
Dongtai Water Recycling Co., Ltd. (“Dongtai
Water”)
|
•
|
Dalian
Dongtai Organic Waste Treatment Co., Ltd. (“Dongtai
Organic”)
|
•
|
Dalian
Zhuorui Resource Recycling Co., Ltd.
(“Zhuorui”)
|
•
|
Dalian
Lipp Environmental Energy Engineering & Technology Co., Ltd. (“Dalian
Lipp”)
|
•
|
Yingkou
Dongtai Industrial Waste Treatment Co., Ltd. (“Yingkou
Dongtai”)
|
•
|
Hunan
Hanyang Environmental Protection Science & Technology Co., Ltd.
(“Hunan Hanyang”)
|
•
|
Sino-Norway
Dalian Energy Efficiency Center Co., Ltd. (“Sino-Norway
EEC”)
|
•
|
Environmental
protection services
|
•
|
Technology
consultation
|
•
|
Pollution
treatment services
|
•
|
Waste
management design processing
services
|
•
|
Waste
disposal solutions
|
•
|
Waste
transportation services
|
•
|
Onsite
waste management services
|
•
|
Environmental
pollution remediation services
|
Useful
Life
|
||
Buildings
|
20
Years
|
|
Machinery
|
10-14
Years
|
|
Vehicles
|
4
Years
|
|
Office
equipment
|
3-5
Years
|
September
30,
2010
|
December
31,
2009
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
Xiangtan
Dongtai
|
$ | 149,466 | $ | 87,900 |
Effective
Date
|
Expiration
Date
|
Area
(Square
Meter)
|
Address
|
Status
|
|||||||||
01-01-2003
|
01-01-2053
|
8,433 |
No.1,
Huaihe West Road, Dalian Development Area
|
Mortgaged
|
|||||||||
01-01-2003
|
01-01-2053 | 6,784 |
No.
100, Tieshan West Road, Dalian Development Area
|
Mortgaged
|
|||||||||
04-14-2003
|
04-13-2053
|
1,841 |
No.1-1,
Huaihe West Third Road, Dalian Development Area
|
Mortgaged
|
|||||||||
07-28-2003
|
07-27-2053
|
61,535 |
No.
85, Dagu Hill, Dalian Development Area
|
Mortgaged
|
|||||||||
06-06-2007
|
06-06-2057
|
56,397 |
Dalian
Huayuankou Economic Zone
|
Mortgaged
|
|||||||||
03-24-2010
|
12-23-2056
|
25,000 |
Yingkou
Coastal Industrial Base
|
Unencumbered
|
|||||||||
-
|
-
|
10,500 |
Haiqing
Island, Dalian Development Area
|
Unencumbered
|
i)
|
Grants
related to revenue, such as certain export subsidies and price control
subsidies, should be recognized in the period of the related
events.
|
ii)
|
Grants
to reimburse current expenditures, such as research and development costs,
wages, training costs and transportation costs, should be treated as a
reduction of current or future related expense, depending on when the
related expense is recognized.
|
iii)
|
Grants
related to developing property, such as timberlands, or mineral reserves,
should be recognized over the useful lives of the
assets.
|
September
30,
2010
|
December
31,
2009
|
|||||||
Aging
|
(Unaudited)
|
(Audited)
|
||||||
1-3
months
|
1,807,395 | $ | 1,098,027 | |||||
4-6
months
|
896,968 | 450,939 | ||||||
7-12
months
|
1,461,528 | 381,949 | ||||||
1-2
years
|
654,158 | 118,875 | ||||||
over
2 years
|
12,400 | 2,699 | ||||||
Total
|
$ | 4,832,449 | $ | 2,052,489 | ||||
Allowance
for doubtful accounts
|
(147,473 | ) | (31,068 | ) | ||||
Accounts
receivable, net
|
$ | 4,684,976 | $ | 2,021,421 |
For
the Nine
months
Ended
September
30,
2010
(Unaudited)
|
For
the
year
Ended
December
31,
2009
(Audited)
|
|||||||
Beginning
allowance for doubtful account
|
$ | 31,068 | $ | 12,132 | ||||
Additional
charged to bad debt expense
|
113,486 | 18,929 | ||||||
Foreign
currency translation adjustment
|
2,919 | 7 | ||||||
Ending
allowance for doubtful accounts
|
$ | 147,473 | $ | 31,068 |
September
30,
2010
|
December
31,
2009
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
Raw
materials
|
$ | 1,107,408 | $ | 719,948 | ||||
Recycled
commodities
|
1,347,486 | 1,365,081 | ||||||
$ | 2,454,894 | $ | 2,085,029 |
September
30,
2010
|
December
31,
2009
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
Buildings
|
15,528,178 | $ | 14,761,998 | |||||
Machinery
and equipment
|
19,643,587 | 19,510,334 | ||||||
Office
equipment
|
698,360 | 670,015 | ||||||
Vehicles
|
1,641,384 | 1,281,659 | ||||||
37,511,510 | 36,226,006 | |||||||
Less:
accumulated depreciation
|
(5,568,082 | ) | (3,904,861 | ) | ||||
Property,
plant and equipment, net
|
3,1943,428 | 32,319,145 | ||||||
Construction
in progress
|
14,562,102 | 9,123,927 | ||||||
Total
|
$ | 46,505,530 | $ | 41,443,072 |
Principal
|
|||||||||||||||||||
Interest
Rate
(Per
Annum)
|
September
30,
2010
|
December
31,
2009
|
|||||||||||||||||
Effective
Date
|
Maturity
|
Type
|
(Unaudited)
|
(Audited)
|
|||||||||||||||
06-13-2010 | 06-10-2011 |
Secured
|
6.372 | % | $ | 2,989,313 | $ | - | |||||||||||
04-27-2009 | 04-27-2010 |
Secured
|
5.841 | % | - | 3,809,022 | |||||||||||||
05-18-2009 | 05-18-2010 |
Secured
|
5.841 | % | - | 1,465,008 | |||||||||||||
06-04-2009 | 06-04-2010 |
Secured
|
5.841 | % | - | 1,465,008 | |||||||||||||
$ | 2,989,313 | $ | 6,739,038 |
Principal
|
|||||||||||||||||||||
Interest
Rate
|
September
30,
2010
|
December
31,
2009
|
|||||||||||||||||||
Lending
Bank
|
Effective
Date
|
Maturity
|
(Per
Annum)
|
Type
|
(Unaudited)
|
(Audited)
|
|||||||||||||||
China
Merchants Bank
|
01-08-2009
|
01-07-2017
|
6.237 | % |
Secured
|
$ | 12,792,841 | $ | 12,452,570 | ||||||||||||
China
Merchants Bank
|
08-20-2009
|
08-20-2017
|
6.237 | % |
Secured
|
3,269,561 | 3,548,067 | ||||||||||||||
Shanghai
Pudong Development Bank
|
04
-27-2010
|
04
-27-2013
|
5.94 | % |
Secured
|
1,644,122 | - | ||||||||||||||
Total
|
$ | 16,706,524 | $ | 16,000,637 |
Year
|
Amount
|
|||
2010
|
$ | 1,129,912 | ||
2011
|
2,259,825 | |||
2012
|
3,734,425 | |||
2013
|
2,407,285 | |||
2014
|
2,259,825 | |||
Thereafter
|
4,915,252 | |||
Total
|
$ | 16,706,524 |
September
30,
2010
|
December
31,
2009
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
Dalian
Dongtai
|
$ | 2,241,985 | $ | 1,465,008 | ||||
Zhuorui
|
995,399 | 999,071 | ||||||
Hunan
Hanyang
|
3,138,779 | - | ||||||
$ | 6,376,163 | $ | 2,464,079 |
i)
|
62,500
shares of free-trading, unrestricted common stock of the
Company.
|
ii)
|
A
Placement Agent Warrant (denominated as “Unit Purchase Option”) to
purchase up to 5 units at 120% of the offering price of the Unit. The
original offering price of a Unit was $60,000 at time of offering. Each
unit consists of 29, 412 shares of restricted common stock of the Company,
“A” warrants to purchase 14,706 common shares of the Company at an
exercise price of $2.50 and “B” warrants to purchase 14,706 common shares
of the Company at an exercise price of
$3.20.
|
September
30,
2010
|
December
31,
2009
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
Due
to Dalian Dongtai Investment Co., Ltd. (“Dongtai
Investment”)
|
$ | (388,611 | ) | $ | (380,902 | ) | ||
Due
from Dalian Lida Environmental Engineering Co., Ltd. (“Dalian
Lida”)
|
$ | 239,145 | $ | 234,401 |
2010
|
2009
|
|||||||
Net
income attributable to the Company
|
$ | 2,848,869 | $ | 1,333,618 | ||||
Adjustments
for diluted EPS calculation
|
- | - | ||||||
Adjusted
net income for calculating EPS-diluted
|
$ | 2,848,869 | $ | 1,333,618 | ||||
Weighted
average number of common shares - Basic
|
15,327,606 | 15,267,387 | ||||||
Effect
of dilutive securities:
|
||||||||
Option
|
19,927 | - | ||||||
Warrants
|
2,209,583 | - | ||||||
Weighted
average number of common shares - Diluted
|
17,557,116 | 15,267,387 | ||||||
Earnings
per share
|
||||||||
Basic
|
$ | 0.19 | $ | 0.09 | ||||
Diluted
|
$ | 0.16 | $ | 0.09 |
Construction
|
$ | 2,717,756 | ||
Equipment
|
3,012,399 | |||
Total
|
$ | 5,730,156 |
|
·
|
the
timing and magnitude of technological
advances;
|
|
·
|
the
prospects for future acquisitions;
|
|
·
|
the
effects of political, economic and social uncertainties regarding the
governmental, economic and political circumstances in the People’s
Republic of China;
|
|
·
|
the
possibility that a current customer could be acquired or otherwise be
affected by a future event that would diminish their waste management
requirements;
|
|
·
|
the
competition in the waste management industry and the impact of such
competition on pricing, revenues and margins;
|
|
·
|
uncertainties
surrounding budget reductions or changes in funding priorities of existing
government programs;
|
|
·
|
the
cost of attracting and retaining highly skilled
personnel;
|
|
·
|
our
projected sales, profitability, and cash
flows;
|
|
·
|
our
growth strategies; anticipated trends in our
industries;
|
|
·
|
our
future financing plans; and
|
|
·
|
our
anticipated needs for working
capital.
|
|
·
|
Industrial
Solid Waste Treatment and Recycling
:
Dalian Dongtai
provides services including the collection, storage, transportation,
disposal and incineration of industrial waste, as well as the landfill of
general and hazardous industrial
waste.
|
|
·
|
Municipal
Sewage Water Treatment
:
Dalian Dongtai’s 80%
subsidiary, Dalian Dongtai Water Recycling Co. Ltd. (“Dongtai Water”),
commenced operations in June 2008 to process domestic sewage generated
from a portion of Dalian City.
|
|
·
|
Municipal
sludge treatment (sludge-to-energy)
:
Dalian Dongtai’s
52%-owned
subsidiary, Dalian
Dongtai Organic Waste Treatment Co. Ltd. (“Dongtai Organic”), which became
operational in 2009, has implemented the centralized processing of
wastewater sludge derived from all sewage treatment plants in urban Dalian
City.
|
Capacity
|
||||||||||
Facility
|
Description
|
Existing
|
After
expansion
|
|||||||
Incinerator
|
Incineration
System for Solid Waste
|
3,300 t/y | 9,000 t/y | |||||||
Hazardous
Waste Landfill
|
Hazardous
Waste Safe Landfill
|
13,000t | 40,000t | |||||||
Industrial
Effluent Treatment System
|
Industrial
Sewage Treatment
|
18,000 t/y | 25,000 t/y | |||||||
Organic
Solvent Recycling System
|
Industrial
Organic Solvent Product
|
1,000 t/y | 3,000 t/y |
|
·
|
Maintaining
commercialization of industrial solid waste treatment as our core business
and maintaining a balanced business structure of the three business lines;
;
|
|
·
|
Expansion
into municipal sludge treatment BOT projects with the goal of 30-40% of
our revenues being provided by sludge treatment;
|
|
·
|
Promoting
the installation of sludge treatment tanks in other cities to seize the
market opportunity in the surge of sludge
treatment;
|
|
·
|
Managing
our businesses locally with a strong operating focus and emphasis on
customer service;
|
|
·
|
Expanding
into new geographic markets in China;
and
|
|
·
|
Maintaining
our financial capacity and effective administrative systems and controls
to support on-going operations and future growth. We are evaluating growth
in our solid waste treatment operations through opportunities to cooperate
with prominent domestic or overseas partners and attempts to integrate
customer groups (for example, the refinery industry), to realize resource
optimization.
|
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Service
fees (1)
|
$ | 2,722,643 | $ | 2,039,001 | $ | 8,894,125 | $ | 4,879,448 | ||||||||
Sales
of recycled commodities (2)(3)
|
1,884,577 | 1,082,266 | 4,732,517 | 2,306,765 | ||||||||||||
Total
|
$ | 4,607,220 | $ | 3,121,267 | $ | 13,626,642 | $ | 7,186,213 |
(1)
|
Consists
of service fees generated from industrial solid waste treatment, sewage
treatment and sludge treatment.
|
(2)
|
Cupric
sulfate, which is included in the sales of recycled commodities, was
segmented previously because its sales account for more
than
10%
of total revenue.
|
(3)
|
Sales
of biogas (methane), which is a new revenue source provided by Dongtai
Organic, is included in sales of recycled
commodities.
|
Three
months ended
September
30,
|
Nine
months ended
September
30,
|
|||||||||||||||
2010
|
2009
|
2010
|
2009
|
|||||||||||||
Cost
of service fees (1)
|
$ | 1,302,925 | $ | 612,036 | $ | 3,559,797 | $ | 1,452,911 | ||||||||
Cost
of recycled commodities (2)(3)
|
901,099 | 571,015 | 1,933,075 | 1,336,227 | ||||||||||||
Total
|
$ | 2,204,024 | $ | 1,183,051 | $ | 5,492,872 | $ | 2,789,138 |
(1)
|
Consists
of service fees generated from industrial solid waste treatment, sewage
treatment and sludge treatment.
|
(2)
|
Cupric
sulfate, which is included in the sales of recycled commodities, was
segmented previously because its sales account for more
than
10%
of total revenue.
|
(3)
|
Sales
of biogas (methane), which is a new revenue source provided by Dongtai
Organic, is included in sales of recycled
commodities.
|
For
the Nine Months Ended September 30,
|
||||||||
2010
|
2009
|
|||||||
Net
cash provided by operating activities
|
$ | 2,710,075 | $ | 117,226 | ||||
Net
cash used in investing activities
|
$ | ( 4,886,798 | ) | $ | (11,549,129 | ) | ||
Net
cash provided by (used in) financing activities
|
$ | ( 4,772,530 | ) | $ | 18,769,094 |
|
·
|
We
had an insufficient familiarity with generally accepted accounting
principles in the United States (“US
GAAP”)
|
|
·
|
The
Company was unable to ensure that all information required to be disclosed
in our filings was accumulated and communicated to management to allow
timely decisions regarding required disclosure.
|
|
·
|
The
Company lacks qualified resources to perform the internal audit functions
properly; and the scope and effectiveness of the Company’s internal audit
function are yet to be developed.
|
|
·
|
Continued
the process by which we will become better informed about US
GAAP
|
|
·
|
Engaged
an accountant with experience in the industry and continue our search for
additional accounting and financial personnel with industry
experience.
|
No.
|
Description
|
|
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 principal financial and accounting
officer
|
|
32.1
|
Section
1350 Certification of Chief Executive Officer
|
|
32.2
|
Section
1350 Certification of Chief Financial
Officer
|
CHINA INDUSTRIAL WASTE MANAGEMENT, INC. | |||
Date:
November 12, 2010
|
By:
|
/s/ Dong Jinqing
|
|
Dong Jinqing, Chief Executive Officer |
Date:
November 12, 2010
|
By:
|
/s/ Guo Xin
|
|
Guo Xin, Chief Financial Officer |
1 Year China Industrial Waste M... (CE) Chart |
1 Month China Industrial Waste M... (CE) Chart |
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