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Share Name | Share Symbol | Market | Type |
---|---|---|---|
China Marine Food Group Limited (CE) | USOTC:CMFO | 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% | 0.0002 | 0.00 | 01:00:00 |
þ
|
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Nevada
|
87-0640467
|
|
(State or Other Jurisdiction of
|
(I.R.S. Employer I.D. No.)
|
|
incorporation or organization)
|
Page
|
|||||
Item 1: | 3-23 | ||||
Item 2: | 24-40 | ||||
Item 3: | 40 | ||||
Item 4: | 40-41 | ||||
Item 1: | 42 | ||||
Item 1A: | 42 | ||||
Item 2: | 43 | ||||
Item 3: | 43 | ||||
Item 4: | 43 | ||||
Item 5: | 43 | ||||
Item 6: | 44 | ||||
45 |
Page
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||||
4 | ||||
5 | ||||
6 | ||||
7 | ||||
8 - 23 |
June 30, 2013
|
December 31, 2012
|
|||||||
(Unaudited)
|
(Audited)
|
|||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 1,629,936 | $ | 880,259 | ||||
Accounts receivable, net
|
30,884,459 | 54,045,852 | ||||||
Inventories
|
65,775,140 | 36,415,013 | ||||||
Prepaid expenses and other current assets
|
2,612,371 | 400,664 | ||||||
Total current assets
|
100,901,906 | 91,741,788 | ||||||
Property, plant and equipment, net
|
37,131,143 | 35,737,296 | ||||||
Land use rights, net
|
2,986,764 | 2,966,805 | ||||||
Construction in progress
|
- | 158,702 | ||||||
Intangible assets, net
|
13,704,459
|
15,616,259 | ||||||
TOTAL ASSETS
|
$ | 154,724,272 | $ | 146,220,850 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Short-term borrowings
|
$ | 19,291,453 | $ | 8,760,375 | ||||
Accounts payable, trade
|
3,457,480 | 4,227,177 | ||||||
Income tax payable
|
- | 321,306 | ||||||
Accrued liabilities and other payables
|
5,180,898 | 6,217,260 | ||||||
Total current liabilities
|
27,929,831 | 19,526,118 | ||||||
Commitments and contingencies (see Note 12)
|
||||||||
Shareholders’ equity:
|
||||||||
Preferred stock, $0.001 par value; 1,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2013 and December 31, 2012
|
- | - | ||||||
Common stock, $0.001 par value; 100,000,000 shares authorized; 29,722,976 shares issued and outstanding as of June 30, 2013 and December 31, 2012
|
29,723 | 29,723 | ||||||
Additional paid-in capital
|
50,097,677 | 50,097,677 | ||||||
Statutory reserve
|
9,696,177 | 9,696,177 | ||||||
Accumulated other comprehensive income
|
15,547,308 | 12,946,218 | ||||||
Retained earnings
|
51,067,416 | 53,568,622 | ||||||
Total China Marine Food Group Limited shareholders’ equity
|
126,438,301 | 126,338,417 | ||||||
Non-controlling interests
|
356,140 | 356,315 | ||||||
Total shareholders’ equity
|
126,794,441 | 126,694,732 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
|
$ |
154,724,272
|
$ | 146,220,850 |
For the Three Months Ended June 30,
|
For the Six Months Ended June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
REVENUE, NET
|
||||||||||||||||
Processed seafood products
|
$ | 9,798,962 | $ | 10,657,284 | $ | 21,461,384 | $ | 20,560,387 | ||||||||
Marine catch
|
9,125,015 | 38,334,101 | 9,380,940 | 38,334,101 | ||||||||||||
Algae-based beverage products
|
8,363,640 | 12,292,806 | 17,930,156 | 17,473,632 | ||||||||||||
27,287,617 | 61,284,191 | 48,772,480 | 76,368,120 | |||||||||||||
COST OF REVENUE (INCLUSIVE OF DEPRECIATION AND AMORTIZATION)
|
||||||||||||||||
Processed seafood products
|
(7,357,758 | ) | (7,630,558 | ) | (15,475,636 | ) | (14,901,293 | ) | ||||||||
Marine catch
|
(8,140,078 | ) | (37,086,105 | ) | (8,417,728 | ) | (37,086,105 | ) | ||||||||
Algae-based beverage products
|
(5,104,318 | ) | (7,592,003 | ) | (10,948,627 | ) | (10,806,254 | ) | ||||||||
(20,602,154 | ) | (52,308,666 | ) | (34,841,991 | ) | (62,793,652 | ) | |||||||||
GROSS PROFIT
|
6,685,463 | 8,975,525 | 13,930,489 | 13,574,468 | ||||||||||||
OPERATING EXPENSES:
|
||||||||||||||||
Depreciation and amortization
|
(625,998 | ) | (695,145 | ) | (1,244,732 | ) | (1,391,215 | ) | ||||||||
Sales and marketing
|
(6,981,939 | ) | (8,698,313 | ) | (11,762,739 | ) | (13,279,562 | ) | ||||||||
General and administrative
|
(843,994 | ) | (1,208,921 | ) | (1,585,627 | ) | (1,747,062 | ) | ||||||||
Stock-based compensation
|
- | - | - | (667,246 | ) | |||||||||||
Intangible assets impairment | (1,085,183 | ) | - | (1,085,183 | ) | - | ||||||||||
TOTAL OPERATING EXPENSES
|
(9,537,114 | ) | (10,602,379 | ) | (15,678,281 | ) | (17,085,085 | ) | ||||||||
LOSS FROM OPERATIONS
|
(2,851,651
|
) | (1,626,854 | ) |
(1,747,792
|
) | (3,510,617 | ) | ||||||||
OTHER INCOME (EXPENSES):
|
||||||||||||||||
Subsidy income
|
- | 15,866 | - | 15,866 | ||||||||||||
Rental income
|
51,269 | 49,224 | 101,931 | 98,529 | ||||||||||||
Interest income
|
8,446 | 28,672 | 17,919 | 61,721 | ||||||||||||
Interest expense
|
(298,498 | ) | (105,815 | ) | (510,012 | ) | (141,121 | ) | ||||||||
LOSS BEFORE INCOME TAXES
|
(3,090,434
|
) | (1,638,907 | ) |
(2,137,954
|
) | (3,475,622 | ) | ||||||||
INCOME TAX EXPENSE
|
- | - | (363,427 | ) | (207,720 | ) | ||||||||||
NET LOSS
|
(3,090,434
|
) | (1,638,907 | ) |
(2,501,381
|
) | (3,683,342 | ) | ||||||||
Less: net loss attributable to non-controlling interests
|
48 | 46 | 175 | 92 | ||||||||||||
NET LOSS ATTRIBUTABLE TO CHINA MARINE FOOD GROUP LIMITED
|
$ |
(3,090,386
|
) | $ | (1,638,861 | ) | $ |
(2,501,206
|
) | $ | (3,683,250 | ) | ||||
Other comprehensive income:
|
||||||||||||||||
- Foreign currency translation gain
|
1,896,626 | 63,579 | 2,601,090 | 894,172 | ||||||||||||
COMPREHENSIVE (LOSS) INCOME
|
$ | (1,193,760 | ) | $ | (1,575,282 | ) | $ | 99,884 | $ | (2,789,078 | ) | |||||
Net loss per share attributable to China Marine Food Group Limited | ||||||||||||||||
- Basic
|
$ | (0.10 | ) | $ | (0.06 | ) | $ | (0.08 | ) | $ | (0.12 | ) | ||||
- Diluted
|
$ | (0.10 | ) | $ | (0.06 | ) | $ | (0.08 | ) | $ | (0.12 | ) | ||||
Weighted average shares outstanding | ||||||||||||||||
- Basic
|
29,722,976 | 29,697,976 | 29,722,976 | 29,697,976 | ||||||||||||
- Diluted
|
29,722,976 | 29,697,976 | 29,722,976 | 29,697,976 |
For the Six Months Ended June 30,
|
||||||||
2013
|
2012
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$ |
(2,501,381
|
) | $ | (3,683,342 | ) | ||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
||||||||
Depreciation and amortization
|
1,696,938 | 1,539,539 | ||||||
Reversal of doubtful accounts
|
(116,389 | ) | (56,906 | ) | ||||
Intangible assets impairment
|
1,085,183 | - | ||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
23,277,782 | 11,381,301 | ||||||
Inventories
|
(29,360,127 | ) | (19,083 | ) | ||||
Prepaid expenses and other current assets
|
(2,211,707 | ) | (201,768 | ) | ||||
Accounts payable, trade
|
(769,697 | ) | 2,980,069 | |||||
Income tax payable
|
(321,306 | ) | (174,525 | ) | ||||
Accrued liabilities and other payables
|
(1,036,362 | ) | 1,116,175 | |||||
Net cash (used in) provided by operating activities
|
(10,257,066 | ) | 12,881,460 | |||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Purchase of property, plant and equipment
|
(1,024,251 | ) | (68,300 | ) | ||||
Cash paid to construction in progress
|
- | (1,124,690 | ) | |||||
Net cash used in investing activities
|
(1,024,251 | ) | (1,192,990 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Repayment of amount due to a shareholder
|
- | (3,567 | ) | |||||
Proceeds from short-term borrowings
|
18,972,827 | 7,171,530 | ||||||
Repayment on short-term borrowings
|
(8,794,150 | ) | (2,570,327 | ) | ||||
Net cash provided by financing activities
|
10,178,677 | 4,597,636 | ||||||
NET CHANGE IN CASH AND CASH EQUIVALENTS
|
(1,102,640 | ) | 16,286,106 | |||||
Effect of exchange rate changes in cash and cash equivalents
|
1,852,317 | 495,052 | ||||||
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
|
880,259 | 586,914 | ||||||
CASH AND CASH EQUIVALENTS, END OF PERIOD
|
$ | 1,629,936 | $ | 17,368,072 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
|
||||||||
Cash paid for income taxes
|
$ | 1,406,832 | $ | 382,245 | ||||
Cash paid for interest
|
$ | 510,012 | $ | 141,121 | ||||
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND
FINANCING TRANSACTIONS
|
||||||||
Transfer from construction in progress to property, plant and equipment
|
$ | 158,702 | $ | - | ||||
Accrual of property, plant and equipment
|
$ | 27,095 | $ | - |
China Marine Food Group Limited shareholders’ equity
|
||||||||||||||||||||||||||||||||
Common stock
|
Additional
paid-in
capital
|
Statutory
reserve
|
Accumulated
other
comprehensive
income
|
Retained
earnings
|
Non-
controlling interests
|
Total
shareholders’
equity
|
||||||||||||||||||||||||||
No. of shares
|
Amount
|
|||||||||||||||||||||||||||||||
Balance as of December 31, 2012
|
29,722,976 | $ | 29,723 | $ | 50,097,677 | $ | 9,696,177 | $ | 12,946,218 | $ | 53,568,622 | $ | 356,315 | $ | 126,694,732 | |||||||||||||||||
Net loss for the period
|
- | - | - | - | - | (2,501,206 | ) | (175 | ) | (2,501,381 | ) | |||||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | - | 2,601,090 | - | - | 2,601,090 | ||||||||||||||||||||||||
Balance as of June 30, 2013
|
29,722,976 | $ | 29,723 | $ | 50,097,677 | $ | 9,696,177 | $ | 15,547,308 | $ | 51,067,416 | $ | 356,140 | $ | 126,794,441 |
●
|
Basis of consolidation
|
●
|
Use of estimates
|
●
|
Cash and cash equivalents
|
●
|
Accounts receivable and allowance for doubtful accounts
|
●
|
Inventories
|
●
|
Property, plant and equipment
|
Depreciable life
|
Residual value
|
|||
Buildings
|
30-50 years
|
10% | ||
Plant and machinery
|
5-30 years
|
10% | ||
Motor vehicles
|
8-10 years
|
10% | ||
Office equipments
|
5 years
|
10% |
●
|
Construction in progress
|
●
|
Goodwill and intangible assets
|
June 30, 2013
|
December 31, 2012
|
|||||||
Beginning balance
|
$ | - | $ | 2,553,757 | ||||
Less: Goodwill impairment
|
- | (2,571,488 | ) | |||||
Effect of foreign currency translation
|
- | 17,731 | ||||||
Ending balance
|
$ | - | $ | - |
June 30, 2013
|
December 31, 2012
|
|||||||
Beginning balance
|
$ | 15,616,259 | $ | 20,225,220 | ||||
Less: Accumulated amortization
|
(1,126,415 | ) | (2,547,711 | ) | ||||
Less: Intangible assets impairment
|
(1,085,183
|
) | (2,223,879 | ) | ||||
Effect of foreign currency translation
|
299,798 | 162,629 | ||||||
Ending balance
|
$ | 13,704,459 | $ | 15,616,259 |
●
|
Impairment of long-lived assets
|
●
|
Revenue recognition
|
●
|
Income taxes
|
●
|
Foreign currencies translation
|
June 30,
|
||||||||
2013
|
2012
|
|||||||
Period-end exchange rates RMB:US$1
|
6.1732 | 6.3089 | ||||||
Average exchange rates RMB:US$1 for three months period ended
|
6.2025 | 6.3078 | ||||||
Average exchange rates RMB:US$1 for six months period ended
|
6.2395 | 6.3027 |
●
|
Stock-based compensation
|
●
|
Fair value measurement
|
●
|
Related parties
|
●
|
Recent accounting pronouncements
|
June 30, 2013
|
December 31, 2012
|
|||||||
Account receivable, at cost
|
$ | 31,039,657 | $ | 54,317,439 | ||||
Less: allowance for doubtful accounts
|
(155,198 | ) | (271,587 | ) | ||||
Account receivable, net
|
$ | 30,884,459 | $ | 54,045,852 |
June 30, 2013
|
December 31, 2012
|
|||||||
Beginning balance
|
$ | 271,587 | $ | 344,943 | ||||
Reversal of doubtful accounts
|
(116,389 | ) | (73,356 | ) | ||||
Amounts written off
|
- | - | ||||||
Ending balance
|
$ | 155,198 | $ | 271,587 |
June 30, 2013
|
December 31, 2012
|
|||||||
Raw materials
|
$ | 62,465,039 | $ | 33,337,600 | ||||
Work-in-process
|
2,949,851 | 2,646,855 | ||||||
Finished goods
|
221,807 | 269,440 | ||||||
Packaging materials
|
138,443 | 161,118 | ||||||
Total
|
$ | 65,775,140 | $ | 36,415,013 |
June 30, 2013
|
||||
20% share of equity interest in Xianghe
|
$ | 512,039 | ||
Less: advance to a non-controlling shareholder of a subsidiary
|
(155,899 | ) | ||
Net amount
|
$ | 356,140 |
Six Months Ended June 30,
|
||||||||
2013
|
2012
|
|||||||
Tax jurisdiction from:
|
||||||||
– Local
|
$ | - | $ | - | ||||
– Foreign
|
(2,137,954 | ) | (3,475,622 | ) | ||||
Loss before income taxes
|
$ | (2,137,954 | ) | $ | (3,475,622 | ) |
Six Months Ended June 30,
|
||||||||
2013
|
2012
|
|||||||
Current:
|
||||||||
– Local
|
$ | - | $ | - | ||||
– Foreign
|
363,427 | 207,720 | ||||||
Deferred:
|
||||||||
– Local
|
- | - | ||||||
– Foreign
|
- | - | ||||||
Income tax expense
|
$ | 363,427 | $ | 207,720 |
Six Months Ended June 30,
|
||||||||
2013
|
2012
|
|||||||
Loss before income taxes from PRC subsidiaries
|
$ | (2,059,107 | ) | $ | (3,395,253 | ) | ||
Statutory income tax rate
|
25 | % | 25 | % | ||||
Income tax expense at statutory tax rate
|
(514,777 | ) | (848,813 | ) | ||||
Tax effect from Tax Holiday
|
- | 207,389 | ||||||
Tax effect on net operating losses from PRC subsidiaries
|
348,446 | 504,944 | ||||||
Tax effect on non-taxable income
|
- | 11,128 | ||||||
Tax effect on non-deductible expenses
|
529,758 | 333,072 | ||||||
Income taxes at effective rate
|
$ | 363,427 | $ | 207,720 |
Six Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
Amount of tax holiday effect
|
$ | - | $ | (207,389 | ) | |||
Tax holiday effect on basic losses per share
|
$ | - | $ | (0.007 | ) | |||
Tax holiday effect on diluted losses per share
|
$ | - | $ | (0.007 | ) |
Three Months Ended June 30, 2013
|
||||||||||||||||
Processed seafood products
|
Marine catch
|
Algae-based
beverage products
|
Total
|
|||||||||||||
Revenue, net
|
$ | 9,798,962 | $ | 9,125,015 | $ | 8,363,640 | $ | 27,287,617 | ||||||||
Cost of revenue
|
(7,357,758 | ) | (8,140,078 | ) | (5,104,318 | ) | (20,602,154 | ) | ||||||||
Gross profit
|
$ | 2,441,204 | $ | 984,937 | $ | 3,259,322 | $ | 6,685,463 | ||||||||
Expenditure for long-lived assets
|
$ | - | $ | 784,013 | $ | - | $ | 784,013 |
Three Months Ended June 30, 2012
|
||||||||||||||||
Processed seafood products
|
Marine catch
|
Algae-based beverage products
|
Total
|
|||||||||||||
Revenue, net
|
$ | 10,657,284 | $ | 38,334,101 | $ | 12,292,806 | $ | 61,284,191 | ||||||||
Cost of revenue
|
(7,630,558 | ) | (37,086,105 | ) | (7,592,003 | ) | (52,308,666 | ) | ||||||||
Gross profit
|
$ | 3,026,726 | $ | 1,247,996 | $ | 4,700,803 | $ | 8,975,525 | ||||||||
Expenditure for long-lived assets
|
$ | - | $ | 532,095 | $ | - | $ | 532,095 |
Six Months Ended June 30, 2013
|
||||||||||||||||
Processed seafood products
|
Marine catch
|
Algae-based beverage products
|
Total
|
|||||||||||||
Revenue, net
|
$ | 21,461,384 | $ | 9,380,940 | $ | 17,930,156 | $ | 48,772,480 | ||||||||
Cost of revenue
|
(15,475,636 | ) | (8,417,728 | ) | (10,948,627 | ) | (34,841,991 | ) | ||||||||
Gross profit
|
$ | 5,985,748 | $ | 963,212 | $ | 6,981,529 | $ | 13,930,489 | ||||||||
Expenditure for long-lived assets
|
$ | - | $ | 1,024,251 | $ | - | $ | 1,024,251 |
Six Months Ended June 30, 2012
|
||||||||||||||||
Processed seafood products
|
Marine catch
|
Algae-based beverage products
|
Total
|
|||||||||||||
Revenue, net
|
$ | 20,560,387 | $ | 38,334,101 | $ | 17,473,632 | $ | 76,368,120 | ||||||||
Cost of revenue
|
(14,901,293 | ) | (37,086,105 | ) | (10,806,254 | ) | (62,793,652 | ) | ||||||||
Gross profit
|
$ | 5,659,094 | $ | 1,247,996 | $ | 6,667,378 | $ | 13,574,468 | ||||||||
Expenditure for long-lived assets
|
$ | 6,868 | $ | 1,124,690 | $ | - | $ | 1,131,558 |
Three Months Ended June 30,
|
Six Months Ended June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
Revenue, net
|
||||||||||||||||
The PRC
|
$ | 27,287,617 | $ | 60,238,229 | $ | 48,772,480 | $ | 75,322,158 | ||||||||
Asia
|
- | 1,045,962 | - | 1,045,962 | ||||||||||||
Total revenue, net
|
$ | 27,287,617 | $ | 61,284,191 | $ | 48,772,480 | $ | 76,368,120 |
Six Months Ended June 30, 2013 | ||||||||||||||||
Customer
|
Revenue
|
Percentage
of total
revenue
|
Accounts receivable, net
|
Percentage of
total accounts
receivable, net
|
||||||||||||
Customer A
|
$ | 9,184,264 | 19 | % | $ | 10,290,108 | 33 | % | ||||||||
Customer B
|
9,130,388 | 19 | % | 7,807,754 | 25 | % | ||||||||||
Total: | $ | 18,314,652 | 38 | % | $ | 18,097,862 | 58 | % |
Six Months Ended June 30, 2012 | ||||||||||||||||
Revenue
|
Percentage
of total
revenue
|
Accounts receivable, net
|
Percentage of
total accounts
receivable, net
|
|||||||||||||
Customer C
|
$ | 22,290,359 | 29 | % | $ | 25,163,353 | 44 | % | ||||||||
Customer D
|
16,575,711 | 22 | % | 17,359,628 | 30 | % | ||||||||||
Total: | $ | 38,866,070 | 51 | % | $ | 42,522,981 | 74 | % |
Six Months Ended June 30, 2013
|
||||||||||||||||
Vendor
|
Purchases
|
Percentage
of total purchases
|
Accounts payable, trade
|
Percentage of total accounts payable, trade
|
||||||||||||
Vendor A
|
$ | 12,854,308 | 26 | % | $ | 81,789 | 2 | % | ||||||||
Vendor B
|
10,141,282 | 20 | % | - | - | |||||||||||
Vendor C
|
9,588,556 | 19 | % | - | - | |||||||||||
Vendor D
|
5,511,526 | 11 | % | 154,965 | 5 | % | ||||||||||
Vendor E
|
5,440,109 | 11 | % | 103,128 | 3 | % | ||||||||||
Total
|
$ | 43,535,781 | 87 | % | $ | 339,882 | 10 | % |
●
|
The level of sales is dependent on the supply of raw materials on a timely basis. Raw material costs accounted for approximately 78.0% and 73.2% of our total cost of revenue of processed seafood products in the second quarter of 2013 and 2012, respectively. The availability of these raw materials could be affected by a large number of factors, including,
inter alia
, the availability of fish stock, weather conditions, water contamination, government policies and regulations where such fishing is carried out, the stability of supplies from fishermen and pressure from environmental or animal rights groups.
|
●
|
Specifically, fishing activities in waters around the PRC are restricted in June and July each year to ensure sustainable aquatic resources. As such, some of our suppliers such as fishermen are restricted from fishing during this period due to the restrictions against fishing along the Taiwan Strait imposed by the PRC’s Ministry of Agriculture. There is no assurance that the PRC government may not impose more stringent fishing regulations, including but not limited to longer or more frequent periods that restrict fishing.
|
●
|
Any shortage or contamination in the supply of or increase in the prices of the raw materials for our processed seafood and algae-based beverage products will adversely affect our sales and profit margins.
|
●
|
In March 2011, the northern region of Japan experienced a severe earthquake followed by a tsunami. The earthquake and tsunami caused extensive and severe structural damage in Japan, including heavy damage to roads and railways as well as fires in many areas, and a dam collapse and damage to several nuclear reactors, including leakage of radioactive water. Although to date the damage caused by the earthquake and tsunami have not damaged our access to raw materials, there can be no assurance that such access may not be affected. Even though government officials and health experts in Japan and China stated the doses of nuclear radiation leaks are low and not a threat to human health unless the tainted products are consumed in abnormally excessive quantities, concern of seafood contamination adversely affected our sales of seafood and algae-based beverage products as a result of consumers’ perception of food safety in relation to the nuclear radiation leaks in Japan.
|
●
|
In May 2011, inspectors of the government of Taiwan detected dangerous levels of industrial plasticizers in sports drinks and soft drinks, used to substitute for palm oil as clouding agents in drinks, with levels far in excess of the daily allowed intake. One plasticizer, known as DEHP, is a possible carcinogen, and thought capable of wreaking havoc with children’s reproductive organs. Since then, the plasticizers have been found in a range of foods and drinks. China, Hong Kong, South Korea and the Philippines have recalled beverage bottles suspected of contamination imported from Taiwan. The beverage products sector in the East Asia region was adversely affected by the food scandal, and new legislation with higher food safety standard of beverage products may be implemented in the PRC. The DEHP crisis may affect our beverage products business as a result of any failure to comply with the new standard or adverse changes in the beverage products sector.
|
●
|
Our ability to maintain existing accreditations such as HACCP, ISO9001:2008, ISO14001:2004 and the EU Export Certification accreditations will affect our ability to maintain our presence in our existing market and to expand into new market territories.
|
●
|
Our ability to price our products competitively against existing competitors and new market entrants by achieving economies of scale.
|
●
|
Our ability to build on our established track record and reputation as a supplier of high quality processed seafood products and capability to deliver products in a timely manner.
|
●
|
Our ability to maintain existing business relationships and to secure new customers, which may be affected by the general economic or political conditions in our local and overseas markets.
|
●
|
Our ability to introduce new products to capture a wider group of consumers and to cater to different and changing consumers’ preferences.
|
●
|
Our ability to expand our drink business through marketing campaigns and penetration into new areas.
|
●
|
Our ability to respond successfully to changes in the highly competitive beverage marketplace domestically and internationally.
|
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||||||||||||||||||
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
|||||||||||||||||||||||||
Processed seafood products
|
9,799 | 35.8 | 10,657 | 17.4 | 21,461 | 44.0 | 20,560 | 26.9 | ||||||||||||||||||||||||
Marine catch | 9,125 | 33.6 | 38,334 | 62.5 | 9,381 | 19.2 | 38,334 | 50.2 | ||||||||||||||||||||||||
Algae-based beverage products
|
8,363 | 30.6 | 12,293 | 20.1 | 17,930 | 36.8 | 17,474 | 22.9 | ||||||||||||||||||||||||
Total
|
27,287 | 100.0 | 61,284 | 100.0 | 48,772 | 100.0 | 76,368 | 100.0 |
Three months ended June 30, 2013
|
||||||||||||||||||||||||||||||||
Processed seafood products
|
Marine catch
|
Algae-based beverage products
|
Total
|
|||||||||||||||||||||||||||||
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
|||||||||||||||||||||||||
PRC
|
||||||||||||||||||||||||||||||||
Shandong
|
1,063 | 10.8 | - | - | - | - | 1,063 | 3.9 | ||||||||||||||||||||||||
Zhejiang
|
3,992 | 40.8 | - | - | 4,541 | 54.3 | 8,533 | 31.3 | ||||||||||||||||||||||||
Fujian
|
4,330 | 44.2 | 9,125 | 100.0 | 3,822 | 45.7 | 17,277 | 63.3 | ||||||||||||||||||||||||
Guangdong/ Shenzhen
|
414 | 4.2 | - | - | - | - | 414 | 1.5 | ||||||||||||||||||||||||
Others
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Total PRC
|
9,799 | 100.0 | 9,125 | 100.0 | 8,363 | 100.0 | 27,287 | 100.0 | ||||||||||||||||||||||||
Asia
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Total
|
9,799 | 100.0 | 9,125 | 100.0 | 8,363 | 100.0 | 27,287 | 100.0 |
Three months ended June 30, 2012
|
||||||||||||||||||||||||||||||||
Processed seafood products
|
Marine catch
|
Algae-based beverage products
|
Total
|
|||||||||||||||||||||||||||||
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
|||||||||||||||||||||||||
PRC
|
||||||||||||||||||||||||||||||||
Shandong
|
855 | 8.0 | 14,842 | 38.7 | - | - | 15,697 | 25.6 | ||||||||||||||||||||||||
Zhejiang
|
3,628 | 34.1 | - | - | 1,816 | 14.8 | 5,444 | 8.9 | ||||||||||||||||||||||||
Fujian
|
5,586 | 52.4 | 156 | 0.4 | 10,477 | 85.2 | 16,219 | 26.4 | ||||||||||||||||||||||||
Guangdong/ Shenzhen
|
588 | 5.5 | - | - | - | - | 588 | 1.0 | ||||||||||||||||||||||||
Others (1)
|
- | - | 22,290 | 58.2 | - | - | 22,290 | 36.4 | ||||||||||||||||||||||||
Total PRC
|
10,657 | 100.0 | 37,288 | 97.3 | 12,293 | 100.0 | 60,238 | 98.3 | ||||||||||||||||||||||||
Asia (2)
|
- | - | 1,046 | 2.7 | - | - | 1,046 | 1.7 | ||||||||||||||||||||||||
Total
|
10,657 | 100.0 | 38,334 | 100.0 | 12,293 | 100.0 | 61,284 | 100.0 |
Six months ended June 30, 2013
|
||||||||||||||||||||||||||||||||
Processed seafood products
|
Marine catch
|
Algae-based beverage products
|
Total
|
|||||||||||||||||||||||||||||
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
|||||||||||||||||||||||||
PRC
|
||||||||||||||||||||||||||||||||
Shandong
|
2,286 | 10.6 | - | - | - | - | 2,286 | 4.7 | ||||||||||||||||||||||||
Zhejiang
|
8,471 | 39.5 | - | - | 9,130 | 50.9 | 17,601 | 36.1 | ||||||||||||||||||||||||
Fujian
|
9,854 | 45.9 | 9,381 | 100.0 | 8,800 | 49.1 | 28,035 | 57.5 | ||||||||||||||||||||||||
Guangdong/ Shenzhen
|
850 | 4.0 | - | - | - | - | 850 | 1.7 | ||||||||||||||||||||||||
Others
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Total PRC
|
21,461 | 100.0 | 9,381 | 100.0 | 17,930 | 100.0 | 48,772 | 100.0 | ||||||||||||||||||||||||
Asia
|
- | - | - | - | - | - | - | - | ||||||||||||||||||||||||
Total
|
21,461 | 100.0 | 9,381 | 100.0 | 17,930 | 100.0 | 48,772 | 100.0 |
Six months ended June 30, 2012
|
||||||||||||||||||||||||||||||||
Processed seafood products
|
Marine catch
|
Algae-based beverage products
|
Total
|
|||||||||||||||||||||||||||||
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
|||||||||||||||||||||||||
PRC
|
||||||||||||||||||||||||||||||||
Shandong
|
1,734 | 8.4 | 14,842 | 38.7 | - | - | 16,576 | 21.7 | ||||||||||||||||||||||||
Zhejiang
|
7,375 | 35.9 | - | - | 3,117 | 17.8 | 10,492 | 13.7 | ||||||||||||||||||||||||
Fujian
|
10,343 | 50.3 | 156 | 0.4 | 14,357 | 82.2 | 24,856 | 32.5 | ||||||||||||||||||||||||
Guangdong/ Shenzhen
|
1,108 | 5.4 | - | - | - | - | 1,108 | 1.5 | ||||||||||||||||||||||||
Others (1)
|
- | - | 22,290 | 58.2 | - | - | 22,290 | 29.2 | ||||||||||||||||||||||||
Total PRC
|
20,560 | 100.0 | 37,288 | 97.3 | 17,474 | 100.0 | 75,322 | 98.6 | ||||||||||||||||||||||||
Asia (2)
|
- | - | 1,046 | 2.7 | - | - | 1,046 | 1.4 | ||||||||||||||||||||||||
Total
|
20,560 | 100.0 | 38,334 | 100.0 | 17,474 | 100.0 | 76,368 | 100.0 |
(1)
|
Sales to PRC Others mainly relate to the trading of marine catch transacted in Liaoning province.
|
(2)
|
Sales to Asia relate to exports to the Philippines.
|
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||||||||||||||||||
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
|||||||||||||||||||||||||
Processed seafood products
|
7,358 | 35.6 | 7,631 | 14.6 | 15,476 | 44.4 | 14,902 | 23.7 | ||||||||||||||||||||||||
Marine catch
|
8,139 | 39.7 | 37,086 | 70.9 | 8,417 | 24.2 | 37,086 | 59.1 | ||||||||||||||||||||||||
Algae-based beverage products
|
5,105 | 24.7 | 7,592 | 14.5 | 10,949 | 31.4 | 10,806 | 17.2 | ||||||||||||||||||||||||
Total
|
20,602 | 100.0 | 52,309 | 100.0 | 34,842 | 100.0 | 62,794 | 100.0 |
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||||||||||||||||||
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
|||||||||||||||||||||||||
Raw materials
|
5,741 | 78.0 | 5,588 | 73.2 | 11,818 | 76.4 | 10,849 | 72.8 | ||||||||||||||||||||||||
Packaging materials
|
803 | 10.9 | 824 | 10.8 | 1,740 | 11.2 | 1,643 | 11.0 | ||||||||||||||||||||||||
Direct labor
|
284 | 3.9 | 572 | 7.5 | 722 | 4.7 | 1,149 | 7.7 | ||||||||||||||||||||||||
Manufacturing overhead
|
530 | 7.2 | 647 | 8.5 | 1,196 | 7.7 | 1,261 | 8.5 | ||||||||||||||||||||||||
Total
|
7,358 | 100.0 | 7,631 | 100.0 | 15,476 | 100.0 | 14,902 | 100.0 |
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||||||||||||||||||
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
|||||||||||||||||||||||||
Raw materials
|
7,725 | 94.9 | 36,910 | 99.5 | 7,860 | 93.4 | 36,910 | 99.5 | ||||||||||||||||||||||||
Other expenses
|
414 | 5.1 | 176 | 0.5 | 557 | 6.6 | 176 | 0.5 | ||||||||||||||||||||||||
Total
|
8,139 | 100.0 | 37,086 | 100.0 | 8,417 | 100.0 | 37,086 | 100.0 |
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||||||||||||||||||
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
|||||||||||||||||||||||||
Raw materials
|
758 | 14.9 | 1,108 | 14.6 | 1,634 | 14.9 | 1,572 | 14.5 | ||||||||||||||||||||||||
Packaging materials
|
3,448 | 67.5 | 5,141 | 67.7 | 7,390 | 67.5 | 7,323 | 67.8 | ||||||||||||||||||||||||
Manufacturing overhead
|
899 | 17.6 | 1,343 | 17.7 | 1,925 | 17.6 | 1,911 | 17.7 | ||||||||||||||||||||||||
Total
|
5,105 | 100.0 | 7,592 | 100.0 | 10,949 | 100.0 | 10,806 | 100.0 |
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||||||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||||||||||||||||||
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
US$’000
|
%
|
|||||||||||||||||||||||||
Processed seafood products
|
2,441 | 36.5 | 3,026 | 33.7 | 5,985 | 43.0 | 5,658 | 41.7 | ||||||||||||||||||||||||
Marine catch
|
986 | 14.8 | 1,248 | 13.9 | 964 | 6.9 | 1,248 | 9.2 | ||||||||||||||||||||||||
Algae-based beverage products
|
3,258 | 48.7 | 4,701 | 52.4 | 6,981 | 50.1 | 6,668 | 49.1 | ||||||||||||||||||||||||
Total
|
6,685 | 100.0 | 8,975 | 100.0 | 13,930 | 100.0 | 13,574 | 100.0 |
Three months ended June 30,
|
Six months ended June 30,
|
|||||||||||||||
2013
|
2012
|
2013
|
2012
|
|||||||||||||
%
|
%
|
%
|
%
|
|||||||||||||
Processed seafood products
|
24.9 | 28.4 | 27.9 | 27.5 | ||||||||||||
Marine catch
|
10.8 | 3.3 | 10.3 | 3.3 | ||||||||||||
Algae-based beverage products
|
39.0 | 38.2 | 38.9 | 38.2 | ||||||||||||
Total
|
24.5 | 14.6 | 28.6 | 17.8 |
Six months ended June 30,
|
||||||||
US$’000
|
2013
|
2012
|
||||||
Net cash (used in) provided by operating activities
|
(10,257 | ) | 12,881 | |||||
Net cash used in investing activities
|
(1,024 | ) | (1,193 | ) | ||||
Net cash provided by financing activities
|
10,179 | 4,598 | ||||||
Net change in cash and cash equivalents
|
(1,102 | ) | 16,286 | |||||
Foreign currency translation adjustment
|
1,852 | 495 | ||||||
Cash and cash equivalents at the beginning of the period
|
880 | 587 | ||||||
Cash and cash equivalents at the end of the period
|
1,630 | 17,368 |
●
|
Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the issuer;
|
●
|
Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the issuer are being made only in accordance with authorizations of management and directors of the issuer; and
|
●
|
Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the issuer's assets that could have a material effect on the financial statements.
|
Rule 13a-14 (a)/15d-14 (a) Certification of Chief Executive Officer
|
|
Rule 13a-14 (a)/15d-14 (a) Certification of Chief Financial Officer
|
|
Section 1350 Certification of Chief Executive Officer
|
|
Section 1350 Certification of Chief Financial Officer
|
101.INS†
|
XBRL Instance Document.
|
101.SCH†
|
XBRL Taxonomy Extension Schema Document.
|
101.CAL†
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF†
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
101.LAB†
|
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE†
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
CHINA MARINE FOOD GROUP LIMITED | |||
Dated: August 14, 2013
|
/s/ Pengfei Liu | ||
Pengfei Liu, Chief Executive Officer | |||
(Principal executive officer) | |||
Dated: August 14, 2013 | /s/ Marco Hon Wai Ku | ||
Marco Hon Wai Ku,
Chief Financial Officer
(Principal financial officer and principal accounting officer)
|
1 Year China Marine Food (CE) Chart |
1 Month China Marine Food (CE) Chart |
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