SEC Filings

Form 10-Q - Ended September 30,2012
Author:Aoxin Tianli Date:Nov/15/2012

10-Q 1 e610173_10q-tianli.htm FORM 10-Q

 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 

FORM 10-Q

 
x
Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the quarterly period ended September 30, 2012
 
o
Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the transition period from                      to                     .
 
Commission File Number 001-34799
 

TIANLI AGRITECH, INC.
(Exact name of registrant as specified in its charter)

 
British Virgin Islands
 
Not applicable
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. employer
identification number)
 
Suite F, 23rd Floor, Building B, Jiangjing Mansion
228 Yanjiang Ave., Jiangan District, Wuhan City
Hubei Province, China 430010
(Address of principal executive offices and zip code)
 
(+86) 27 8274 0726
(Registrant’s telephone number, including area code)
 

 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.     Yes  x    No   o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
 
Large accelerated filer
 
o
   
  
Accelerated filer
 
o
         
Non-accelerated filer
 
o
 
(Do not check if a smaller reporting company)
  
Smaller reporting company
 
x
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  o    No  x
 
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.  As of November 10, 2012, the Registrant had outstanding 11,135,000 shares of common stock, par value $0.001 per share.
 
 
 

 
 
TIANLI AGRITECH, INC.
FORM 10-Q
 
INDEX
 
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
  
2
PART I    FINANCIAL INFORMATION
  
3
Item 1.
  
Financial Statements.
  
3
Item 2.
  
Management’s Discussion and Analysis of Financial Condition and Results of Operations
  
33
Item 3.
  
Quantitative and Qualitative Disclosures about Market Risk.
  
43
Item 4.
  
Controls and Procedures
  
43
PART II    OTHER INFORMATION
  
45
Item 1A.
  
Risk Factors
  
45
Item 6.
  
Exhibits
  
45
 
 
1

 
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
 
This document contains certain statements of a forward-looking nature. Such forward-looking statements, including but not limited to projected growth, trends and strategies, future operating and financial results, financial expectations and current business indicators are based upon current information and expectations and are subject to change based on factors beyond the control of the Company. Forward-looking statements typically are identified by the use of terms such as “look,” “may,” “should,” “might,” “believe,” “plan,” “expect,” “anticipate,” “estimate” and similar words, although some forward-looking statements are expressed differently. The accuracy of such statements may be impacted by a number of business risks and uncertainties that could cause actual results to differ materially from those projected or anticipated, including but not limited to those set forth herein and in our Annual Report on Form 10-K for the fiscal year ended  December 31, 2011 filed on March 14, 2012.
 
Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by the federal securities laws, the Company undertakes no obligation to update forward-looking information. Nonetheless, the Company reserves the right to make such updates from time to time by press release, periodic report or other method of public disclosure without the need for specific reference to this Report. No such update shall be deemed to indicate that other statements not addressed by such update remain correct or create an obligation to provide any other updates.
 
 
2

 
PART I     FINANCIAL INFORMATION
 
Item 1.
Financial Statements.
 
TIANLI AGRITECH, INC. AND SUBSIDIARIES
 
CONSOLIDATED BALANCE SHEETS
 
(AMOUNTS EXPRESSED IN US DOLLARS)
 
   
September 30, 2012
   
December 31, 2011
 
   
(Unaudited)
       
ASSETS
           
Current Assets:
           
Cash and cash equivalents
  $ 7,541,510     $ 6,507,742  
Accounts receivable
    187,316       126,866  
Inventories
    9,584,881       9,578,040  
Advances to suppliers
    30,305       -  
Prepaid expenses
    275,926       164,664  
Restricted cash
    39,563       -  
Loan to An Puluo
    -       1,101,582  
Other receivables, net
    250,780       154,775  
Assets - discontinued operations
    -       1,402,842  
Total Current Assets
    17,910,281       19,036,511  
Long-term prepaid expenses
    1,704,648       1,818,399  
Plant and equipment, net
    21,921,400       17,676,999  
Construction in progress
    2,616,700       3,126,317  
Biological assets, net
    4,652,790       3,886,580  
Land use rights, net
    1,493,989       1,522,709  
Total Assets
  $ 50,299,808     $ 47,067,515  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY
               
Current Liabilities:
               
Short-term loans
  $ 6,330,116     $ 4,721,064  
Accounts payable and accrued liabilities
    148,497       172,541  
Due to An Puluo
    -       35,951  
Other payables
    2,409,151       781,037  
Due to related party
    125,574       120,326  
Liabilities - discontinued operations
    -       1,198,544  
Total Liabilities
    9,013,338       7,029,463  
                 
Stockholders’ Equity:
               
Common stock ($0.001 par value, 50,000,000 shares authorized, 11,135,000 and 10,135,000 shares issued and outstanding on September 30, 2012 and December 31, 2011)
    11,135       10,135  
Additional paid in capital
    14,665,306       13,520,276  
Statutory surplus reserves
    2,416,647       2,416,647  
Retained earnings
    21,692,200       21,795,072  
Accumulated other comprehensive income
    2,501,182       2,295,922  
Total Stockholders’ Equity
    41,286,470       40,038,052  
 Total Liabilities and Stockholders’ Equity
  $ 50,299,808     $ 47,067,515  
 
See notes to financial statements.
 
 
3

 
TIANLI AGRITECH, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
 
(AMOUNTS EXPRESSED IN US DOLLARS)
 
(UNAUDITED)
 
   
For the Three Months Ended
September 30,
   
For the Nine Months Ended
September 30,
 
   
2012
   
2011
   
2012
   
2011
 
Revenue
  $ 6,574,673     $ 8,090,596     $ 19,672,437     $ 21,667,991  
Cost of goods sold
    5,953,024       4,495,248       16,947,240       12,391,691  
    Gross profit
    621,649       3,595,348       2,725,197       9,276,300  
                                 
General and administrative expenses
    490,723       581,163       1,549,397       1,962,120  
Selling expenses
    1,131,133       29,379       1,132,386       91,689  
Income (loss) from operations
    (1,000,207 )     2,984,806       43,414       7,222,491  
                                 
Other income (expense):
                               
Interest expenses and bank charges
    (115,429 )     (77,334 )     (294,787 )     (186,307 )
Subsidy income
    -       9,142       161,838       222,409  
Other income (expense)
    (9,570 )     1,323       (52,516 )     (24,036 )
Total other income (expense)
    (124,999 )     (66,869 )     (185,465 )     12,066  
                                 
Income (loss) before income taxes
    (1,125,206 )     2,917,937       (142,051 )     7,234,557  
Income taxes
    -       -       -       -  
Net income (loss) from continuing operations
    (1,125,206 )     2,917,937       (142,051 )     7,234,557  
                                 
Discontinued operations:
                               
Gain from operations of discontinued component, net of taxes
    -       26,436       39,179       26,436  
Net income (loss)
  $ (1,125,206 )   $ 2,944,373     $ (102,872 )   $ 7,260,993  
                                 
Earnings (losses) per share:
                               
Basic and diluted weighted average shares
    10,968,333       10,125,000       10,412,778       10,128,382  
Basic and diluted earnings (losses) per share from continuing operations
  $ (0.10 )   $ 0.29     $ (0.01 )   $ 0.72  
Basic and diluted earnings per share from discontinued operations
  $ -     $ -     $ -     $ -  
                                 
Comprehensive income (loss):
                               
Net income (loss)
  $ (1,125,206 )   $ 2,944,373     $ (102,872 )   $ 7,260,993  
Unrealized foreign currency translation adjustment
    (64,111 )     675,322       205,260       1,136,741  
Comprehensive income (loss)
  $ (1,189,317 )   $ 3,619,695     $ 102,388     $ 8,397,734  
 
See notes to financial statements. 
 
 
4

 
TIANLI AGRITECH, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
 
(AMOUNTS EXPRESSED IN US DOLLARS)
 
(UNAUDITED)
 
   
For the Nine Months Ended September 30,
 
   
2012
   
2011
 
CASH FLOWS FROM OPERATING ACTIVITIES
           
Net income (loss) from continuing operations
  $ (142,051 )   $ 7,234,557  
Adjustments to reconcile net income to net cash
               
provided by operating activities:
               
Depreciation and amortization
    2,138,097       1,641,170  
Amortization of prepaid rental expenses
    84,200       -  
Bad debt expense
    -       112,640  
Stock-based compensation
    1,146,030       237,926  
Gain on disposal of biological assets
    -       (209,502 )
Loss from disposal of construction in progress
    49,299       -  
Changes in operating assets and liabilities:
               
Accounts receivable
    (59,837 )     (122,318 )
Inventories
    47,047       (3,607,070 )
Advances to suppliers
    (30,356 )     (30,332 )
Prepaid expenses
    (161,227 )     (126,547 )
Other receivables
    (95,293 )     140,362  
Accounts payable and accrued liabilities
    (25,055 )     (30,223 )
Other payables
    1,627,446       385,840  
Net cash provided by operating activities from continuing operations
    4,578,300       5,626,503  
Net cash provided by operating activities from discontinued operations
    154,042       1,521  
Net cash provided by operating activities
    4,732,342       5,628,024  
                 
CASH FLOWS FROM INVESTING ACTIVITIES
               
Cash collected from loan to An Puluo
    1,109,614       -  
Advance to An Puluo
    -       (1,077,337 )
Purchase of intangible assets
    -       (780,135 )
Payment for long-term prepaid expenses
    -       (87,398 )
Purchase of plant and equipment
    (143,875 )     (4,828,899 )
Deposits for purchase of equipment
    -       (153,905 )
Addition to construction in progress
    (5,212,022 )     (1,206,203 )
Proceeds from disposal of construction in progress
    509,430       -  
Purchase of biological assets
    (1,677,504 )     (1,678,342 )
Proceeds from disposal of biological assets
    -       134,156  
Net cash used in investing activities
    (5,414,357 )     (9,678,063 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES
               
Increase in restricted cash
    (39,629 )     -  
Repayment of short-term loans
    (3,170,326 )     -  
Proceeds from short-term loans
    4,755,489       3,078,107  
Net cash provided by financing activities
    1,545,534       3,078,107  
                 
EFFECT OF EXCHANGE RATE CHANGES ON CASH
    170,249       522,654  
NET INCREASE (DECREASE) IN CASH
    1,033,768       (449,278 )
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD
    6,507,742       7,983,793  
CASH AND CASH EQUIVALENTS, END OF PERIOD
  $ 7,541,510     $ 7,534,515  
                 
SUPPLEMENTAL DISCLOSURES:
               
Cash paid during the period for:
               
Interest expense paid
  $ 312,157     $ 117,332  
Income tax paid
  $ -     $ -  
 

See notes to financial statements.

 

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